MT460 Management Policy and Strategy
Based on revenue, Mattel, Inc is the largest toy producing company in the world. It produces products such as the Barbie dolls, Fisher Price, Matchbox toys, Hot Wheels, Master of the Universe, American Girl dolls and early 1980s, it produced video game consoles. The company derived its name from Elliot Handler and Harold “Matt” Matson who had founded Mattel Inc. in the year 1945.
Mattel Company which is a leader in the industry was recalling a variety of its products which had been exported and produced from China in the year 2007, products which included toothpaste, dog food seafood and tires. Robert Eckert, the CEO of Mattel at the time was facing a very major crisis and by the time things had cleared, the Company had already recalled toys amounting to 19 million in number which had been made in China. The Stock price of Mattel Company had decreased as they had taken a charge worth $40 million of recalls and the costs had gone up due to the increased regulations in the United States and China.
In the 2007, Mattel Company recalled several million toys due to the safety concerns of the consumer product which are include high amounts of lead in the toys and dangerous magnets. On August 2, 2007, the Fesher-Price subsidiary of Mattel recalled about one million toys which were made in China for the reasons that they had been colored by use of lead-based paints which had exceeded the United States Federal limit which only allows 600 parts per million. On August 14, 2007, the Mattel Company also recalled more than 18 million of its products for the reasons that they posed a hazard to the children.
After the scandal, reports indicated that Mattel recalled about 21 million of toys that were from China due to the magnets and the lead paints. Mattel and the Fisher-Price division were fined a total of $2.3 million dollars by the Consumer Product Safety Commission for violating Code 16 of Federal Regulations CFR 1303, the ban on Federal lead paint. The Fortune magazine among others went on to rate the scandals involving the recalls of Mattel’s products and the Chinese products as the dumbest moments of business in the year 2007.
On September 21, 2007, Thomas Debrowski the Executive Vice President for the world-wide operations of Mattel went to Beijing. During the meeting with Li Chanjiang the Product Safety Chief of China, Debrowski admitted to taking the full responsibility for the recalls due to magnets as he said that the recalled products were as a result of errors in the design of Mattel and not due to flaws in the manufacturing of China’s manufacturers. He continued to apologize to the people of China and all the customers who had received those toys.
The Mattel Company carried out investigations to get to the source of the problem and also started working with the retailers worldwide so as to identify the products that had problems and as a result have them withdrawn from the shelves and also intercept any shipments of the products to stop any selling. Mattel then promised to increase auditing and testing of all its products.
Following the 2007 high profile recalls, Geoff Massingberd was appointed as the Vice President of Corporate Responsibility of Mattel so as to lead the implementation and development of programs in business integrity. Several subcontractors were stopped from manufacturing toys for Mattel and even more toys were withdrawn from the retailer’s shelves.
Before getting into any contracts, Companies should carry out investigations to ensure that the products produced on their behalf meet all the required standards and more so if the contracted companies are from other countries. The staff to supervise that the products meet the standards should also be educate on what the standards require of the products so as to avoid the losses incurred due to recalling of products and the fines that would come with any damage caused by the products.
Manufacturing companies should ensure that the safety of their end users is guaranteed because they are the main factors that keep the business running. They should make sure the vendors do comply with the safety operating procedures and quality of the products and in addition, they should observe the Global Manufacturing Principles which indicates the commitment of companies to responsible practices and respect to the ethnic, philosophical and cultural differences of the countries where the companies operate.
References
B., K. P. (2009, June 5). Mattel fined $2.3 million over lead in toys. Retrieved July 18, 2009, from CNN/Money: http://money.cnn.com/2009/06/05/news/companies/cpsc/.
Bapuji, H., & Beamish, P. W. (2007, September 26). Is China Really the Problem? Retrieved September 25, 2007, from Toy Recalls: http://web.archive.org/web/20070926025231/http://www.asiapacific.ca/analysis/pubs/pdfs/commentary/cac45.pdf
McDougall, A. (2010). International Product Law Manual. NewYork.
Reuvid, J. (2011). Practical Advice on Operational Strategy and Risk Management. Business Insights , 7-13.
