1. How did Mattel’s detailed code of conduct fail to detect vendors who used lead paint? What else could the firm have done from a policy/audit standpoint? Like most contracts and regulation statements, Mattel’s code of conduct has a loophole. The loophole is mainly due to the fact that Mattel, an American company following U.S. regulations, had outsourced the production of their toys to China, a country with different regulations and in development process. What this means is that the difference in regulations between both countries could have been the reason why Mattel failed to detect the presence of lead in their products.
At the same time, it was not until June and July of 2007, when both the European Union and American consumer-protection authorities started to look into Chinese-made products, and, therefore, forcing China to study the country’s quality standards in search for defaulting products.
This doesn’t mean, however, that Mattel has nothing to be blamed for. When Robert Eckert took over as Mattel’s CEO in 2000, he introduced measures leading to the reduction of costs. These measures included reducing cycle time for the ordering and receiving of goods; measure which increased pressure on Mattel’s Chinese contractor Lee-Der Industrial Company. The urge to reduce costs added to the surplus of pressure taken by the contractor, led to divert attention from the safety and quality standards imposed by the firm, due to the objective of cutting costs.
Moreover, the fact that Mattel trusted its manufacturers and that these trusted their suppliers, of whom Mattel had little knowledge, and, therefore, trust, could have also led to a lack of focus on the quality of the products, as they trusted the materials satisfied the standards imposed by authorities and by Mattel.
From a policy/audit point of view, Mattel could have inspected their products twice. Not only should they have integrated a safety and quality control...