Introduction to the case;
On Sept 12, 2007, members of Congress, their staff, reporters, and the general public were all gathered in a U.S. Senate hearing room to discuss the issue of toy safety, how to make it better and improve it (Anne T Lawrence, 2008). What brought about the hearing was the Mattel Company, who is known as one of the “world’s premier toy companies” and was the Global leader in the design, manufacture, and marketing of toys along with other family products had ordered a series of recalls of toys and other children’s playthings. Mattel manufactures over 800 million toys annually. They began their business in Southern California in a garage workshop manufacturing picture frames and eventually the company started selling dollhouse furniture made from their picture frame scraps and when they realized the market potential they switched their business over to manufacturing toys. In 1959 Mattel created their most famous and popular toy, the Barbie Doll. The toy was considered a doll with which little girls could play out their dreams. Throughout the history of the company Mattel has continued to create and market popular toys such as Hot Wheels and Match Box. They have also merged with successful manufacturers (Fisher Price and Tyco), they also became partners with children’s program companies (Disney, Sesame Street, and Nickelodeon), obtained rights to manufacture popular product lines (Cabbage Patch, American Girl Dolls, Fisher Price and Harry Potter merchandise) and expanded their business by acquiring other companies like (The Pleasant Company). Situation and Issue, Reasons for the recall;
There are two separate reasons why Mattel recalled 19 million toys from August to September of 2007. The fact that both recalls occurred at the same time makes this the biggest recall in the company’s history. The first reason was some of the toys Mattel manufactured were found to be coated with lead paint which if ingested is a potent neurotoxin. The second reason toys were recalled was because of faulty magnets. The design of these toys included parts with high-energy magnets. These types of magnets are normally used for industrial purposes not to mention they could easily come loose. These magnets pose a threat to young children and infants who could easily ingest the parts and have them bond together along their digestive tract. If several magnets were swallowed they would pull together in the stomach and rip through stomach tissue. The strength of the magnets combined with Mattel’s poor design of the toys made these products a serious hazard for young children. On their website, Mattel listed 71 models and makes of toys that are recalled because of faulty magnets. Toys affected by this problem included Polly Pockets, Batman action figures, and Barbie and her dog Tanner. Some Polly Pocket sets had been recalled as early as November of 2006. Once this was discovered they changed the design of the toys altogether and in the new design the magnets were locked into place. It wasn’t until August 2007 that Mattel Toy Manufacturers faced a trust issue with their stakeholders and customer base that included children, parents, consumer activists, product safety regulators, and store retailers as well as both their external and internal customers. Beginning in June of 2007, the United States Consumer Product Safety Commission identified certain toys made in China as unsafe due to lead paint. The CPSC is a federal agency that monitors the safety of 5000 products it has standards that companies are expected to comply with. They can inspect, monitor, prosecute and fine but its budget is limited. Their key regulation is that a company must report a defect and recall it within 24 hours which Mattel did not do. A key regulation was that paint on toys must have legal lead toxicity levels and some of Mattel’s toys did not. In the 1980’s Mattel first began shifting their production to Asia however they soon became concerned...
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