For the purposes of this assignment we will analyze the Mattel case and discuss the actions of the company regarding the behavior and actions in conjunction with the Global Manufacturing Process that was implemented. Breaches of the two business ethics elements of integrity and egoism will be assessed. Within the discussion I have identified the virtues prudence, justice, fidelity, and courage that were largely violated by the Mattel organization and how it affected the employees of Mattel. We will discuss the implications of virtue, deontological, and utilitarian ethics regarding their potential usefulness in evaluation of the Mattel case.
Mattel’s concept of Global Manufacturing Principles (GMP) was not a novel concept. The many forms of GMP including International Organization for Standardization (ISO) and Good Manufacturing Practices (GMP) have been around for decades and have worked to insure that specific industries are held to a standard that is industry wide. ISO’s model is “Say what you do, and do what you say”. When a company endeavors to become ISO qualified, it is required to document every activity (as a standard operating procedure, SOP) that occurs within the company and adhere to that process without deviation. ISO qualified companies are always subject to audit by other ISO registered companies and is initially audited by four such companies in order to acquire certification. Having been directly involved with ISO implementation at a former employer that supplied fasteners for manufacturing, I am fully aware of how involved the certification is.
The company SOP was over 1000 pages. Additionally, another ISO company can and will come in and audit your company prior to electing to conduct business with your company. In some instances, ISO qualification is not enough to be awarded the business. The nutrition industry also adheres to the Good Manufacturing Practices, of which I was required to be certified in every year. Each department of the nutritional company I worked for had its own GMP standards that we were to adhere implicitly. The nutrition industry, while not regulated by the FDA, is controlled indirectly by the FDA. GMP is an FDA requirement. Having worked in two industries where the concept is not only expected, but required in some instances; I was not impressed by the fact that Mattel implemented GMP of their own volition for the sole purpose to improve public perception after misconduct was exposed by the media. Business Ethics Issue
The one word that I found that resonates throughout the article, whether spoken or implied, is “integrity”. The incoming CEO stated that Mattel would behave in all actions with “unwavering integrity” and that the company’s commitment to the GMP remained unequivocal and undiminished. (Sethi, Shapiro, Emelianova, pg. 490) Ironically, I identify the most noticeable and important business ethics issue as just that; a lack of integrity. Merriam Webster defines integrity as “the firm adherence to a code of especially moral value, the quality or sate of being complete or undivided, and the quality of being honest or fair. Mattel exhibited none of these traits insofar as where their GMP’s were concerned. In fact, there were numerous infractions regarding the non-enforcement of their GMP’s across the board in the Asia and Mexico based manufacturing facilities.
The second ethics issue I identified was narcissism. Mattel implemented this GMP program with the attitude of ‘look at what we’re doing’ but with minimal effort to ensure the success of the program. According to Duchon and Drake (2009) extreme narcissistic organizations will establish these formal ethics programs but will not have much effect on hindering unethical behaviors. This was evident in that the supervisors at the factories knew what they were supposed to be doing; but found ways to circumvent the system and there were no reprisals as a result of their nonconformance. Ultimately, it was a program of words and not deeds.
“Careful good judgment that allows someone to avoid danger or risks.” (M-W, 2013) In my opinion, a great deal of misfortune and hardship could have been avoided if Mattel would have practiced a modicum of prudence before ever moving their manufacturing to Asia. In a perfect world, and especially in a modern world we do not expect children to work. However, when dealing with underdeveloped countries; it is normal for children to work in conditions that would be an affront to any American’s moral nature having abandoned child labor decades ago. If Mattel had done due diligence, they would have known that the facility in Indonesia was operating in an unacceptable manner (Sethi, et al. pg. 486) and could have implemented working conditions and requirements from the get-go. Then the exposure by the media would have never been an issue. I have no doubt that the draw of paying lower wages and increased productivity was the catalyst to overlook the conditions in those overseas factories.
“The quality of being just, impartial, or fair. Conformity to truth, fact, or reason.” (M-W, 2013) The concept of justice was completely lost on Mattel. While the implementation of the GMP program was comprehensive; the execution and enforcement was unconscionable. The last paragraph of the GMP, exhibit 1 says that if “Mattel determines that any of its manufacturing facilities or vendors violate these principles, we may either terminate our business relationship or require that facility to take corrective action. If corrective action is advised and not taken, Mattel will immediately terminate current production and suspend placement of future orders.”(Sethi, et al. pg. 487) However, when audits were performed; the facilities were rife with infractions but there was no follow through when corrective actions were required. The facilities were allowed to continue to operate unhindered. Astonishingly, the 20 plus companies that were not owned by Mattel were allowed to operate without any disciplinary actions imposed by Mattel for infractions if any auditing was conducted at all. Considering the fact that both Mattel owned and vendor factories employ some hundred thousand plus employees; Mattel’s actions were nowhere near impartial, fair, or conforming to fact or reason.
“Quality or state of being faithful, accuracy in details.”(M-W, 2013) For this virtue, I am concentrating on the act of being faithful to the employees. Whether or not the GMPs were self-imposed or not, Mattel had an obligation to the people it employs. Throughout the article, it was found during audits that the employee’s time cards would systematically be incomplete where they were not being allowed to clock-out. This resonates that these people were being required to work overtime ‘off the books’. Employees were not being given the appropriate days off or vacation time. Some living conditions and canteen conditions were substandard. Fines were being imposed. (Sethi, et al. 2011) The list goes on and on. In my opinion, Mattel should have had impartial representatives on the ground in these factories to ensure that the rules for payment, working overtime, and work conditions were being upheld. There should have been constant supervision and vigilance on a corporate level. To think that audits that were being conducted every three years was comprehensive enough to get the job done was blind and narrow minded.
To go one step further. A virtue is an attitude. Courage is measured when there is risk involved; but also rationality. To be truly courageous there needs to be a clear picture of what a person’s values are. Courage does not need to be proven beyond a doubt. (Hartman, 2008) In the case of Mattel, I feel it was courageous to implement such a comprehensive GMP program although it was misguided and ultimately failed. An even more courageous act would have been to rehab the program and bring it to its full potential and fruition. The article does not mention whether Mattel experienced any loss of revenue as a result, but public perception is a fickle entity and once all of the attention over sweat shops and child labor overseas died down, Mattel was no longer under the microscope. Financially, Mattel was spending money it perceivably no longer needed to spend. Since their program was self-imposed; it is no surprise that Mattel just unceremoniously abandoned the GMP program after nine years. When some organizations implement and enforce codes as part of a self-regulation process and others do not, those who self-regulate invariably incur greater costs. These costs are usually passed onto the consumer who subsequently (and sensibly) choses the organization which offers the cheaper product. (Blackburn & McGee, 2004)
“Virtues” are attitudes, dispositions, or character traits that enable us to be and to act in ways that develop this potential. They enable us to pursue the ideals we have adopted. Honesty, courage, compassion, generosity, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. (Andre, Meyer, Shanks, and Velazquez. 1988) Virtue ethics indicates that business decisions should be made in a manner that attributes to the overall goals of the professional. It stresses activities and motives, what we do and why. Virtue ethics proffer that action and motive are connected to character and disposition. Actions are taken and decisions made because they are linked to a certain character. (Blackburn and McGee. 2004) “That “ought” does not imply “right” can be seen in another sort of case as well, namely, when what one ought to do in one’s circumstances results from one’s own prior wrongdoing. In such a case, doing what one ought to do may not be the same as doing a right act or a “good deed”. In fact, the same prior failure may both increase one’s level of obligation to do a given act now and decrease one’s level of praiseworthiness.” (Russell, 2008) The above quote is especially poignant in the Mattel case. Because Mattel implemented the GMP program on the heels of a media expose, the intentions were not solely based on the ‘right’ thing to do, but on what they ‘ought’ to do. Mattel probably did not get the recognition or good press they were looking for and therefore had no proclivity to ensure that the plan was a success.
“Actions are approved when they are as such to promote happiness and disapproved when they have a tendency to cause unhappiness.” (Driver, 2009) We also know that utilitarian ethics work for the greatest good for the greatest number of people. Mattel directly employs over twenty thousand people throughout Asia and Mexico. If the happiness of those
employees would have been considered; the pay, working conditions, time off, and canteen programs would have never been an issue. If the executives of the company would have experienced any of those adverse conditions, they would have cried “foul” all the way to an attorney. The employees are ultimately left without a voice and no recourse.
“To act according to the maxim that you would wish all other rational people to follow as though it were universal law.” “Never treat a person as a means to an end.” (Pecorino, 2000) Kant contends that where morality is concerned, it is guided by law and therefore judgment is not necessary to fill in the blanks, because there are no blanks. He believed that people can conform to duty and not be morally limited. He believed that we could use indeterminate action-guidance for imperfect duties, and I’m paraphrasing; to weigh the moral options for decisions regarding duty towards others. Because that decision requires the minimum of our morality. Kant rejected virtue ethics. (McAleer, 2001) My opinion is that deontology would not work in the Mattel case. There are too many variables to consider in order to narrow down the maxim that will be comprehensive enough to include thousands of people over a number of cultural variances.
While the design of Mattel’s Global Manufacturing Principles may have been well intended and meant to improve the working conditions of the employees, the implementation was short-sighted and poorly executed. All too often when the few aspire to set standards for the many, the end result is a miscalculation. GMP’s are not a one size fits all type of endeavor. Each facility should have had a program that was custom to their country and working conditions. The ethical treatment of employees was the intention; but the ultimate governance was not enforced. The aftermath was the abandonment of the program due to the lack of interest and participation on the public and other companies in the industry.