Ethics & Social Responsibility in Marketing Management

EXECUTIVE SUMMARY

Manufacturers of products for children certainly have special obligations to consumers and to society. These responsibilities go beyond product safety standards as defined by law. These responsibilities include being mindful of its workplace quality, management of its entire supply chain, and being stewards of the environment such that ongoing business practices become sustainable. Prior to a toy recall in 2007 for lead paint used in the manufacture of toys, Mattel was diligently practicing at the ethical dimension of corporate social responsibility, but it had not yet achieved a philanthropic dimension. Mattel’s business practices moved from a compilation of written documents and procedures regarding what it believed to be right and wrong to really “living” their words. Today, Mattel has fully adopted a stakeholder focus in its marketing and strategic planning process to become the model citizen it desired to be.

ABOUT MATTEL

Mattel is one of the world’s most recognized business names, and Mattel owns a host of the world’s most successful brands in the toy manufacturing industry. A short list of these leading brands includes Barbie, Hot Wheels, Fisher-Price, Matchbox, Tyco, Disney, and Cabbage Patch Kids. Mattel was founded in 1945 in a garage by Harold Matson and Elliot and Ruth Handler. The company initially manufactured picture frames and doll house furniture; but, it was the introduction of the Barbie doll in 1959 that put Mattel on the map for good. In 1960, Mattel went public and corporate sales exceeded $100 million by 1965. Today, Mattel’s sales top $6 billion with distribution in over 150 countries. The Barbie doll has become the world’s most popular doll and annual sales remain robust at $2 billion.

For decades, Mattel has been recognized as a leader in the adoption of principles of corporate social responsibility and as one of the best places to work in the United States. In 2003, Mattel won a CSR Award from UNICEF. In 2008, the Fisher-Price brand was recognized as the “Best Toy in 2008” by two magazines, including Parent’s Magazine and Family Fun Magazine. Also, in 2008, Mattel was recognized by Forbes Magazine as one of the 100 Best Companies to Work, and then continued to win this award for four consecutive years. With all this success, Mattel has been facing a fierce challenge with the fact that kids today are making lifestyle changes, choosing convenient access to music, movies, video games, YouTube, and the internet.

MATTEL’S SOCIAL CHALLENGE

In 2007, Mattel faced a significant problem with the use of lead paint on their toys, and this resulted a costly recall of millions of toys. The cost to Mattel went beyond the cost of the toys themselves. Mattel faced back-lash from its customers and its investors. Mattel pointed blame on Chinese toy sub-contractors who elected to use this lead paint on the toys. Chinese manufacturers were under pressures from their own economic environment. Raw material costs have been sky-rocketing in China due to increased scarcity, and wages demanded by the Chinese workplace were on the rise. This problem resulted in turmoil among the US and Chinese governments that ultimately caused a leader of the responsible Chinese sub-contractor to hang himself in shame.

MATTEL’S SOCIAL RESPONSIBILITY EFFECTIVENESS

While Mattel was being highly recognized as a leader in Corporate Social Responsibility prior to 2007, much of their actions to this date were too superficial. A great deal of their corporate efforts had been committed to written statements regarding their mission, vision, and values; but, Mattel was lacking in its real actions. In 1997, and every three years thereafter, Mattel completed an ethics audit of its own manufacturing facilities as well as those of its prime contractors. Mattel was over-looking its responsibility to thoroughly inspect and to audit its entire supply chain.

There are four dimensions of corporate social responsibility. These include economic, legal, ethical, and philanthropic. The first two, economic and legal limit corporate responsibility to simply making a profit and abiding by the law. In 2007, Mattel’s actions were practiced at the “ethical” dimension. Mattel was certainly engaged in the process of doing what is right and what is fair, but they hadn’t yet taken their efforts to the philanthropic level. An organization that achieves this highest dimension is one that is fully committed to be the best corporate citizen possible. At this dimension, an organization fully identifies and acts to correct all potential ethical issues in a marketing program with a focus on meeting the demands of ALL stakeholders.

CORPORATE SOCIAL RESPONSIBILITY RECOMMENDATION

Potential ethical issues in a marketing program include those related to product, pricing, distribution (supply chain), and promotion. A few examples of these potential ethical issues include a misrepresentation of goods, price deception, opportunistic behavior among supply chain members, and high-pressure sales strategies. Ethical issues within an organization need to be tirelessly identified, and strategies must be put in place to eliminate and to control the problems identified.

At the philanthropic level of corporate social responsibility, organizations adopt a stakeholder orientation with strategic planning. Stakeholders in an organization go far beyond the customers. Stakeholders include employees, suppliers, shareholders, regulators, community, the environment, and more.

To achieve this philanthropic level of corporate social responsibility, an organization must become committed at the highest level of the organization. A stakeholder focus must be adopted within the strategic plan of the business. Goals and objectives must be identified and then followed up with a thorough implementation plan. The implementation plan must include measurable metrics so that plans can be modified when goals aren’t achieved.

MATTEL TODAY

In the four consecutive years following the 2007 lead paint recall, Mattel was recognized as one of the top 100 places to work. This was no accident. Mattel began the transformation from the ethical dimension to the philanthropic dimension of corporate social responsibility. With a new focus on all its stakeholders, Mattel continues to prosper. A quick visit to the Mattel website will bring you to a specialized site at http://citizenship.mattel.com. It is clear here that Mattel has moved to the highest level of corporate responsibility as they now encourage public awareness of all their business activity in all its manufacturing plants and its suppliers. Mattel’s mission, vision, and values clearly identify strategies for responsible supply chain management, site improvement plans, health and safety, ethical sourcing, environmental stewardship, and collaboration/learning. Mattel is a model which business leaders should benchmark as they choose to adopt corporate social responsibility within its marketing plan.

REFERENCES

1. Ferrell, O.C. and Hartline, Michael D. (2014). Marketing Strategy: Text and Cases, Sixth Edition. Mason, OH. South-Western CENGAGE Learning.
2. Channel CSR: Corporate Social Responsibility. January 5, 2017. Trailer: Channel CSR – Corporate Social Responsibility. Retrieved from https://www.youtube.com/watch?v=83kw9rUZl2k on March 18, 2018.
3. Citizenship. Mattel.co. Retrieved from http://citizenship.mattel.com/progress-report/ on March 18, 2017.

Jack Welch, MBA
Sr. Web Developer, Data Engineer, Data Scientist, IoT Engineer, and Impassioned Digital Marketing Consultant!
Life-long learner, team leader, and highly motivated professional who drives data-driven decisions at all levels of business management. I am an accomplished web developer, data strategist, and IoT engineer with several years of experience working with digital media, remote data resources, web API’s, ETL, database management, SQL queries, data visualization, and more.

Exceptional ability to lead complete digital initiatives and campaigns, and to communicate amongst all levels of management from stakeholders to the technical staff responsible to produce results on-time and on-budget.