Abstract
Over the last 20+ years, multinational corporations (MNCs) have been confronted with accusations of abuse of market power and unfair and unethical business conduct especially as it relates to their overseas operations and supply chain management. These accusations include, among others, worker exploitation in terms of unfairly low wages, excessive work hours, and unsafe work environment; pollution and contamination of air, ground water and land resources; and, undermining the ability of natural government to protect the well-being of their citizens. MNCs have responded to these accusations by creating voluntary codes of conduct which commit them to specific standards for addressing these issues. These codes are created at both the industry-wide and the individual company level. Unfortunately, these codes have generated little credibility and public trust because their compliance claims cannot be independently verified, and they lack transparency and full public disclosure. In this article, we present a case study of the voluntary code of conduct by Mattel, Inc., the world’s largest toy company. The code, called the Global Manufacturing Principles (GMP), confronts the general criticism leveled against voluntary codes of conduct by (a) creating detailed standards of compliance, (b) independent external monitoring of the company’s compliance with its code of conduct, and (c) making full, and uncensored public disclosure of the audit findings and company’s response in terms of remedial action. We present a detailed account of how Mattel’s voluntary code of conduct was created, implemented, and ultimately abandoned over 9 years. We provide an evaluative analysis of the company’s GMP compliance throughout its life span, which suggests a bell-shaped curve, where early top management commitments were met with pockets of resistance from operational groups, who were concerned about balancing GMP compliance efforts with traditional performance criteria. The early stage response from Mattel’s top management was quick and supported with the requisite resources. As a result, the compliance process accelerated, becoming increasingly more robust and effective. The success of code compliance and increased transparency in public disclosure energized field managers with a sense of professional satisfaction and publicly recognized accomplishments. The decline in GMP compliance was equally steep. When all the easily attainable targets had been reached at the company-operated plants, addressing vendor plants’ compliance presented a new set of challenges, which taxed corporate resources and management commitment. It would seem that value-based and ethics-oriented considerations, i.e., doing the right thing for the right reason, were no longer the driving force for Mattel’s management. Mattel did not see any economic benefit from its proactive stance, when competitors did not seem to suffer adverse consequences for not following suit. The final contributing factor to the code’s abandonment was a widely publicized series of product recalls which absorbed top management’s attention.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Barboza, D. and L. Story: 2007, July 26, ‘Toy Making in China, Mattel’s Way’, New York Times. Retrieved from http://www.nytimes.com/2007/07/26/business/26toy.html?_r=1.
Casey, N. and A. Pasztor: 2007, September 4, ‘Safety Agency, Mattel Clash Over Disclosures’, The Wall Street Journal, A1.
CNN Money.com: 2007, September, Mattel CEO to Face Congress, Report Says: Senate and House Panels Set to Have CEO Robert Eckert Testify on the Threat Posed by Toys from China, Company’s Reporting Process. Retrieved from http://money.cnn.com/2007/09/07/news/companies/mattel_congress/index.htm.
Dee, J.: 2007, December 23, ‘A Toy Maker’s Conscience: How a Business-School Professor and Consultant for Mattel Would Turn ‘Made in China’ into Something Other than a Curse’, New York Times, Sunday Magazine, p. 34.
Hays, C. L.: 2000, May 18, ‘Mattel Names Kraft Chief to Top Post’, The New York Times, p. 1.
ICCA’s 2nd International Conference on “Globalization and the Good Corporation,” June 26–28, 2007.
La Botz, D.: 2007, Sewing Alliances: Anti-Sweatshop Activism in the United States. The Race, Poverty Environment. Retrieved from http://www.urbanhabitat.org/files/RPE14-1_LaBotz-s.pdf.
Levi Strauss & Co.: Global Sourcing and Operating Guidelines. Retrieved from http://www.levistrauss.com/sites/default/files/librarydocument/2010/4/Citi-zenshipCodeOfConduct.pdf
Mattel Sets a Conduct Code for Its Suppliers: 1997, November 20, New York Times. Retrieved from http://www.nytimes.com/1997/11/20/business/mattel-sets-a-conduct-code-for-its-suppliers.html?pagewanted=1.
Miller, G. W.: 2000, February 7, ‘Manager’s Journal: The Rise and Fall of Toyland’s Princess’, The Wall Street Journal, A38.
National Bureau of Economic Research: 2004, May, Moving Up or Moving Out? Anti Sweatshop Activists and Labor Outcomes (NBER Working Paper No. 10492) (Cambridge, MA: Harrison, Ann & J. Scorse). Retrieved from http://www.nber.org/papers/w10492.
PR Newswire Association LLC.: 1997, November 20, Mattel, Inc. Launches Global Code of Conduct Intended to Improve Workplace, Workers’ Standard of Living. Retrieved from http://www2.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11-20-97/364032&EDATE=.
Schoenberger, K.: 2000, Levi’s Children: Coming to Terms with Human Rights in the Global Marketplace. Retrieved from http://books.google.com/books?id=Tak28CiEtnoC&pg=PA73&lpg=PA73&dq=levis+code+of+conduct&source=bl&ots=eMZwQ5BXp7&sig=lZ06E5RaIn-ymMVO7Lui62ra7c8&hl=en&ei=W8MrS_bfG5DFlAfO77mbBw&sa=X&oi=book_result&ct=result&resnum=8&ved=0CCUQ6AEwBw#v=onepage&q=&f=false.
S. Prakash Sethi, Multinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestle and the Infant Formula Controversy (Boston: Kluwer Academic Publishers, 1994).
Sethi, S. P.: (2003). Setting Global Standards: Guidelines for Creating Codes of Conduct for Multinational Corporations. (pp. 232-234). New York: John Wiley and Sons.
S. P. Sethi and B. B. Bhalla (1993) A New Perspective on International Social Regulation of Business: An Evaluation of the Compliance status of the International Code of Marketing of Breast-Milk Substitutes. Journal of Socio-Economics, 22(2), 141–158
Sethi, S. P., M. L. Weidenbaum and P. F. McCleary: (2000). A Case Study of Independent Monitoring of U.S. Overseas Production: Mattel Independent Monitoring Council For Global Manufacturing Principles (MIMCO) - Audit Report 1999. Global Focus, 12(1), 137-152.
Sethi, S. P. and O. Williams: 2000, Economic Imperatives and Ethical Values in Global Business: The South African Experience and International Codes Today (Boston: Kluwer Academic Publishers), Paperback Version (Notre Dame, IN: University Press, 2001).
Story, L.: 2007, September 5, Mattel in Another Recall, Citing Lead in Toys From China, New York Times. Retrieved December 21, 2007, from http://query.nytimes.com/gst/fullpage.html?res=9F07E7DF103AF936A3575AC0A9619C8B63.
Story, L. and D. Barboza: 2007, August 15, Mattel Recalls 19 Million Toys Sent From China, New York Times. Retrieved from http://www.nytimes.com/2007/08/15/business/worldbusiness/15imports.html?ex=1344830400&en=18d94724a4755843&ei=5090.
The Press Trust of India Limited: 2007, September 21, Mattel Apologizes to China on Toy Recalls; Four Arrested. Retrieved from http://www.hindustantimes.com/News-Feed/corporatenews/Mattel-apologises-to-China-on-toy-recalls-four-arrested/Article1-249069.aspx.
United States Department of Labor: 1997, April, Chronology on Clinton Administration’s No Sweat Initiative. Retrieved from http://actrav.itcilo.org/actrav-english/telearn/global/ilo/guide/apparell.htm.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Sethi, S.P., Veral, E.A., Shapiro, H.J. et al. Mattel, Inc.: Global Manufacturing Principles (GMP) – A Life-Cycle Analysis of a Company-Based Code of Conduct in the Toy Industry. J Bus Ethics 99, 483–517 (2011). https://doi.org/10.1007/s10551-010-0673-0
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-010-0673-0