MattelInc is one of the world’s leading toymakers headquartered in ElSegundo, California. Among some of its most recognized brand toys arethe Barbie and Ken dolls. As of 2014, the firm was ranked among theFortune 500 companies. As a high-value company that is setting thetrend in the industry, the current discussion assesses the ethicalconduct of Mattel and examines its contribution to the firm’ssuccess as presented in the Mattel Inc case analysis by Sethi, Veral,Shapiro and Emelianova (2011). In this study, the authors studied thelife cycle of Mattel`s code of conduct as a specific example ofbusiness ethics in the toy industry. Since the late 1990’s, theissue of ethical conduct among multinational firms gained publicattention. Large firms with huge resources managed to push this issueto the forefront of business management as they sought to presentthemselves in the eyes of the consumers as responsible corporatecitizens who value ethical conduct. However, not to be easily duped,the public called for firms to be continuously ethically responsibleand not just adopting ethical policies as a marketing tool.
Inresponse, some firms including Mattel developed and enacted ethicalcodes of conduct in their operations. Ethical codes of conduct havein most cases proved to be contradictory to the core purpose ofprofit making businesses which is to make profits. As such, thecommitment to enact and live by the code of conduct requires ameticulous plan that is well executed that challenges the status quo,introduces change and does not interrupt the smooth running of thefirm. Mattel seems to have failed in realizing this goal. Severalyears after enacting its ethical code of conduct, Mattel found ithard to live by the code which had been largely popular on paper butnot in operationalization. Sethi, Veral, Shapiro and Emelianova(2011) examined this code closely to understand what caused itsfailure just after a few years of implementation. Based on this, thispaper will examine the inclusion the ethical virtues of justice,honesty and fairness in the Mattel code of ethics and identify anymeasures that sought to integrate them in the firm’s operations.
Tounderstand why codes of ethics fail or succeed, one must firstunderstand what code of ethics entail. As aforementioned, the keycomponents of code of ethics are virtue ethics. According to BBC(2012), virtue ethics look at the character of the person other thanthe ethical duties, rules or consequences of his or her actions. Inother words, virtue ethics are not only concerned with the rightnessor wrongness of an action but also the character of the personinvolved in the action. Harmony between an action and actor is ofutmost importance. One of the greatest Greek philosopher andscientist, Aristotle referred to this harmony as “Eudemonia`. Herecognized this as state that allows human flourishing characterizedby good well-being and happiness. Aristotle recognized honesty as akey virtue needed to achieve this state. He defined honesty as theability or willingness to always tell the truth and beingstraightforward with oneself and others. Justice in a social settingis about social equality, of achieving a harmonious relationshipwhere one is not above the other and there is no abuse of others forhis own advantage. He also defined justice fairness and socialequality where non in society is above the other. John Locke definesjustice in a slightly different manner to incorporate the law thusmaking justice as the application of law in society in a manner thatensures fairness to all. As for temperance, Aristotle defines it asthe ability to restrain the self to act in moderation, to displayhumility, to forgive and be merciful.
TheApplication of Virtues
Mattel`scode of conduct, named the Global Manufacturing Principles (GMP), waslaunched in November 1997. The code was to be applied across theboard touching on its manufacturing process, marketing, distribution,suppliers and contractors. Although the code was voluntary, it alsocovered several areas that were mandated by law. They include wagesand hours, child labor, forced labor, all forms of discrimination,legal and ethical business practices, respect for local culturesamong others (Sethi et al., 2011).
Withsuch provisions in the law, MNCs such as Mattel had troublefulfilling the obligations of the code in all its operations. Forinstance, at the time of launching the code, Mattel had operations inover 150 countries with plants in 36 countries and revenues in excessof $4.5 annually. The firm was soon faced with damning allegationsfollowing investigations of over working conditions in some of itsfactories in third world countries in Asia. The firm was accused ofoperating sweatshops where locals were paid peanuts and working inhorrible conditions in long shift to create the billions in revenues.In one of the factories in Indonesia, there was evidence thatchildren were employed. This clearly contradicts with the firm’sidea of justice as its code of ethics. Being fair to humanity meansrecognizing humanity as one, irrespective of material wealth. Throughthis case, it is clear Mattel failed in honoring its code and thelaw.
Matteldid not take these accusations lying down. The firm, which is wellknown to be American, blamed the atrocious working conditions to itscontractors in Asia. The firm released a statement which condemnedthe developments and actions of some of its contactors. The firmreassured the public that GMP code was there to be adhered to by all.Compromise was not an option as all employees must be over 16 years,must be compensated well, must work with the stipulated andacceptable hours. Thus, it can be surmised that the statementreleased by the firm emphasized on adherence to the already existingcode. However, it is clear and impressive that the firm acknowledgedfairness as an integral part of business operations. Fairness is notjust to employees and consumers but also to the larger society aswell.
Mattelalso had a clear policy on honesty. Already in the press releaseafter the allegations, the firm directly acknowledged that some ofits contractors were not meeting the provisions of the code. Thefirm did not seek to ignore the issue or even deny it but choose tobe open and transparent about it. The GMP code on honesty itselfstated
Evaluationand monitoring: Mattel, Inc. is committed to ensuring that allfacilities manufacturing our products meet or exceed our GMP and wewill audit all facilities to ensure compliance. Consistently, weinsist that all manufacturing facilities provide us with:
1.Full access for on-site inspections by Mattel or parties designatedby Mattel.
2.Full access to those records that will enable us to determinecompliance with our principles.
3.An annual statement of compliance to our GMP signed by an officer ofthe manufacturer or the manufacturing facility (Sethi et al 2011)
Thislevel of honesty and transparency was not direct ted to the publiconly but also the suppliers. It is important for suppliers andcontractors to have a clear and precise understanding with the firmon what is to be expected of them. This relationship is what keepsMattel going because the firm has very minimal control on quality ofits products and raw materials is it relies on suppliers. Therefore,honesty and transparency are paramount.
Thethird and last virtue is temperance. Mattel portrays temperancethrough its GMP code on two main levels the environment and thecontractor relationship after the scandal. On environment, the codereads in part “Mattel, Inc. will only work with those manufacturersor suppliers who comply with all applicable laws and regulations andshare our commitment to the environment." This statement aloneis positivist in nature. It does not rash to dismiss or claim tosevere relations with manufacturers who do not have the neededpolicies, but rather says it will only work with those that meet thelaw. Again, in the earlier statement acknowledging allegations madeto the firm through its manufacturers, the firm did not shift blamebut rather reinforced its policies. These two examples show Mattel’stemperament in its ethical approach.
Normativeethics is branch of philosophy interested in studying the rightnessand wrongness of action. The key idea involved is justifying wrong ora right and showing how that was arrived at. Two main approaches aredeontology and teleology. Deontology is concerned with duty and thereason behind an act. A case in point of this is Kantian approachdeveloped by Immanuel Kant which holds that rational thinking doesnot suit all situations. He thus believed on categorical imperativewhich implied in part that one can only expect something to be doneon others if he would will the same to be done on him. Teleology orconsequentialism judges an act by the impact of the action or itsconsequences. The consequences can be on the actor, a subject or eventhe wider society. Consider utilitarianism wherein the ideal act isone whose impact results to the happiness or good of all. If the actis only good for the self, then it is not right. Virtue ethicsmeanwhile is about character – the virtues that one possessesbecoming the standard for adjudging ethical behavior.
Bycomparing these types of ethics and from lessons obtained from theMattel case, the best ethical approach for firms is virtue ethics.Profit making firms will face dilemmas over meeting ethicalobligations and making profits. Deontology and Teleology, while theymay find relevance, will always be impractical in real life. For oneDeontology is likely to lead employees to differing sense of duty andjustice. On the other hand, Teleology is reactive and not proactive.Thus it cannot be used in charting future ethical direction for afirm. On the contrary, virtue ethics creates the character anorganization which makes its ethical behavior predictable. It can bededuced that Mattel lacked character and assumed an ethical approachbased on deontology ethics. The firm was judged by the acts ofcontractors who operated in countries with little respect for thelaw. With no clear laws to adhere to, ethical conduct was hard tomaintain hence leading to the failure of GMP at Mattel.
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