Mattel Case Study

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Mattel Toy Recall

Jesse Cuviello, Heather Kronstadt, Sean Murphy, Christopher Lewonka

1. What are the main issues involved in the case?
Mattel had five recalls in 2007 involving over 21 million toys. The problems were related to lead paint and poorly designed magnets. Most of the toys were made in China, which caused them to question the reliability of the Chinese manufacturers. At first, Mattel tried to put all the blame on the Chinese manufacturers as a denial tactic. They also claimed the media and government overly magnified the crisis. Mattel also failed to notify the CPSC of the defects within the time limit of 24 hours. It took them nearly a month and a half to notify the CPSC. Even though the recalls were in 2007, there were incidents/injuries reported in 2003 with children needing surgery because of the toy defects. One death was recorded.

2. Identify the major stakeholders and state how the issues in the case affect each stakeholder. Competitors: Because Mattel is such a large and trusted company that outsources, customers were nervous to trust other companies that outsourced. Who was to say they did not have the same issues as Mattel? Investors: Stocks dropped and investors lost money. They ended up suing based on allegations of failure to disclose recalls in a timely manner, and failure to have proper protocols to avoid recalls. Customers: Many children were injured and required surgery, and one child even died. Parents lost faith in Mattel and created lawsuits against them. Employees: Because of the accusations on the Chinese manufacturers, job security in China all but diminished. Job security and pay decreased in America too because of the fines from the CPSC, and the cost of the recalls.

3. How could this case be viewed from an ethical perspective? It was Mattel’s job to report the incident in a specific time limit, which they failed...
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