Mattel, Lead Paint, and Magnets: Ethics and Supply Chain Management

Abstract

Over a period of 19 months in 2006 and 2007, Mattel recalled approximately 14 million toys. The company was subjected to numerous lawsuits and regulatory actions and suffered severe damage to its reputation. Two issues were involved: excessive levels of lead in numerous toy surface paints and small detachable magnets in some toys, which could be swallowed. An examination of the facts shows that two different ethical situations were involved—one concerning product design and the other concerning manufacturing practices of Mattel's Chinese contractors and subcontractors. The ethical obligations of the company and individuals within the company in the two situations were quite different, and illustrate problems faced by companies in managing their global supply chains.