Mattel's ethical failures: courage, honesty, and justice

Ethical Behaviors of Mattel in the Toy Industry

The ethicacy of corporate behaviors are influenced by a myriad of factors yet most strongly reflect the internal culture, alignment of leadership to vision, and accumulated trade-offs made by management over years of ethical decisions, trade-offs and outcomes. In the study Mattel, Inc.: Global Manufacturing Principles (GMP) - A life-cycle analysis of a company-based code of conduct in the toy industry (Sethi, Veral, Shapiro, Emelianova, 2011) the authors successfully provide insights into the moral and ethical dilemmas of operating a multinational corporation (MNC) that is highly dependent on Global Manufacturing Principles (GMP). The life-cycle analysis of company-based code of conduct also illustrates how creating a solid ethical foundation using a Corporate Social Responsibility (CSR) platform is only as effective as the aligning of senior management, vision and mission, and manufacturing, sourcing, supply chain and distribution is (Sethi, Veral, Shapiro, Emelianova, 2011). When and where Mattel deviates in its progress towards a life-cycle based approach to its code of conduct are when these essential elements of their value chain become disjointed, lacking integration and cohesion. This assignment first chooses three virtues and provides a definition of each, followed by the application of these virtues to the Mattel case, explaining how the actions and policies of the company may have been different if these virtues had been more relied on. As is evident in the case there is ample room for improvement in the areas of worker welfare both for Mattel itself and for suppliers, in addition to fairness, working conditions and critical aspects of sustainability. Of the three normative ethics including deontological, utilitarian, or virtue, utilitarianism is most applicable to this case when the entire value chain of the Mattel business model is taken into account.

Selection Of Three Virtues: Courage, Honesty And Justice

Courage

The foundational virtue that leads all others in Aristotelian ethics is courage and the ability to courageously face fear and still remain cognitively lucid, clear in thought and capable of making decisions. Aristotle often wrote that courage is the most foundational virtue of all in that it contextualizes fear, still allowing a human to continually evaluate alternatives and think cognitively and rationally (Machan, 2004). There are many applicable scenarios in the Mattel case, where managers could have acted with courage and defined an ethically-oriented culture and in many cases chose to violate both laws and ethical guidelines. Aristotelian ethics also underscore courage as the catalyst that galvanizes a decision away from merely being aligned to expectations of the broader society to one that forces acuity of ethical and moral insight be applied (Heinze, 2010).

Honesty

The capacity of a person to attain a level of authenticity and transparency determines the ability of influence they have, both form an emotive and cognitive basis (Gordley, Cecil, 1998). Authenticity and transparency, and the continual ascent towards greater shared meaning forces clarity of communication and with it, shared risk. All of these factors work together over time to build trust in intentions, communication and action. The catalyst that galvanizes all of these factors together is honesty and sincerity of thought, intention and action (Gordley, Cecil, 1998). Honesty and its outcomes including shared perception of risk and opportunity, coupled with shared action and collaboration, continually lead to trust-based outcomes as well. Yet the foundational element of all of these benefits of shared perceptions is honesty. As an accelerator of communication and collaboration, honesty at its most fundamental level is the decision to seek clarity and acuity of insight into ones own perception and seek to find congruency with others' as well (Gordley, Cecil, 1998). Honesty is the fuel that propels trust into a catalyst of organizational change.

Justice

The concept of justice as a virtue takes on different aspects of experiential meaning depending on the normative ethics applied. Justice from a utilitarian perspective states that the equality of outcomes is the highest priority, over the unequal distribution of outcomes and judgments (Kielsgard, 2011). Justice and its definition of fairness are often defined by the dimensions of legality and communicative or distributive justice as well. The foundational elements of legal systems in common law nations state that justice is designed as a social construct to protect the common good. From the legalistic perspective, the prevailing perspective of justice is based on a solid utilitarian perspective, which makes its interpretation efficient in even the most complex situations given the options of other normative ethics definitions (Kielsgard, 2011). Utilitarian-based approaches to justice can also be seen as accelerators of value creation in a corporate standpoint just as the lack of justice and inequality unbalances value chains and forces market disequilibrium.

Mattel And Its Ethical Dilemmas

Courage

Competing in an industry that is known for very rapid product lifecycles, uncertain two-tier and multi-tier distribution alliances given the mercurial nature of customer demand, and the constant need to innovate with entirely end products, toy industry supply chains often have unethical business practices. Mattel's many decisions with regard to their supply chain and the unethical and at times immoral business practices show just how severe the pressures are in their industry (Sethi, Veral, Shapiro, Emelianova, 2011). What's missing from an ethical standpoint is the consistency of management policy with regard to supply chain, GMP practices and the consistent and thorough adoption of social responsibility initiatives (Sethi, Veral, Shapiro, Emelianova, 2011). From an Aristotelian ethics standpoint, Mattel suffers from a vacillating leadership and management structure, which makes the attainment of consistency across all virtues nearly impossible. A foundational element of courage is the willingness to stay consistent despite competing demands and seek to attain a specific ethical and moral standard (Heinze, 2010). Mattel's turbulent internal environment is making the aligning of GMP and CSR programs along ethical and moral dimensions impossible. The internal turbulence and internal chaos is leading to an exceptional level of disjoined supply chain practices. Lost in this chaos is courage as a cornerstone for guiding the company through its many ethical, legal and moral dilemmas. The case concludes with Mattel being only marginally successful in managing the ethical and moral management of their supply chain.

Justice

From an Aristotelian ethic standpoint Mattel also struggles with this virtue as a result of the extreme time fames and pricing pressures it faces in managing its supply chain. From a utilitarian standpoint, the common good of all supplier's workers needs to outweigh the needs of just the few (Mattel) (Kielsgard, 2011). This isn't advocating a socialistic mindset of business management and operations, yet one that seeks to have both the workers in suppliers, throughout Mattel and shareholders also gain from greater production efficiencies. Justice as an intermediating virtue is critical for Mattel to create a supply chain that is transparent enough to be completely auditable and meeting or exceeding requirements of government and regulatory agencies. Clearly the turbulent and unstable nature of Mattel management makes this a daunting task (Sethi, Veral, Shapiro, Emelianova, 2011). Yet in an increasingly transparent world due to social media, Mattel must continually strive to be better than any government-defined law or regulation for compliance in the areas of human rights. Parents, the key decision makers in all toy purchases, are increasingly aware of these social aspects of who they choose to buy from. Justice to workers throughout the global supply chain isn't just good for compliance (Sethi, Veral, Shapiro, Emelianova, 2011) it is good for business as well. As is the case with many aspects of Mattel the economic benefits of being virtuous are lost on them from an insight standpoint as their management team continually churns, striving to stay aligned between vision and operation.

Normative Ethics

In evaluating the Mattel case from a normative ethics perspective, utilitarian ethics are the most useful as the company is dependent on a very broad supply chain that operates in an industry driven by rapid product introductions, severe price drops and the need for continual innovation (Sethi, Veral, Shapiro, Emelianova, 2011). Utilitarian ethics are particularly well-suited for a supply chain that operates predominantly in 3rd world nations, as these economies are so desperate for infusions of capital that they often ignore human rights violations (Sethi, Veral, Shapiro, Emelianova, 2011). Utilitarian ethics states that every member of the supply chain, to the worker level, deserves to benefit from the success of Mattel products. While this is not socialist in mindset, it is more oriented towards a more equitable distribution of benefits based on skill set, contributions made and agility in the face of market competition that is particularly intense from Asian competitors. Utilitarianism seeks to define an equitable distribution of benefits or value earned based on relative contribution while also ensuring what gets delivered to customers meets or exceeds their expectations (Kielsgard, 2011).