The ethics of outsourcing at Mattel 
Problems and Perspectives in Management, Volume 8, Issue 4, 2010
SECTION 3. General issues in management
Sarah D. Stanwick (USA), Peter A. Stanwick (USA)
The ethics of outsourcing at Mattel
Abstract
This study addresses the ethical issues related to Mattel Corporation. This study presents a chronological dateline highlighting the illegal and unethical activities that took place by suppliers for Mattel as well as Mattel’s reaction to the crisis. In addition, this article will address how corporate culture played a role in the decision to outsource the manufacturing process to facilities, which were not following legal standards.
Keywords: Mattel, corporate culture, ethics, Fraud, product safety.
JEL Classificastion: M14.
Introduction
Corporate culture is defined as the shared values and beliefs of individuals within an organization (Stanwick and Stanwick, 2009). Corporate culture is an important concept to examine when researchers attempt to explain unethical behavior within an organization. Previous research in the area has primarily focused on the positive aspects culture that is related to firm performance (Deal and Kennedy, 1982; Peters and Waterman,
1982; Denison, 1990). It is also important to consider that the corporate culture can have negative impact on a firm’s operations if the culture supports unethical and illegal activities. This study examines how one company, Mattel, developed a culture which allowed the unethical and illegal actions of its suppliers to negatively affect its operations.
fixated only on the low price of production of the Chinese suppliers. By allowing the quality standards to drop to potentially dangerous levels, Mattel managers focused only on their own self-interests since their performance was directly linked to the financial performance of Mattel. Therefore, Mattel managers ignored potential safety issues with the production of the toys in China since lower levels of production or higher costs per unit would have a direct
SECTION 3. General issues in management
Sarah D. Stanwick (USA), Peter A. Stanwick (USA)
The ethics of outsourcing at Mattel
Abstract
This study addresses the ethical issues related to Mattel Corporation. This study presents a chronological dateline highlighting the illegal and unethical activities that took place by suppliers for Mattel as well as Mattel’s reaction to the crisis. In addition, this article will address how corporate culture played a role in the decision to outsource the manufacturing process to facilities, which were not following legal standards.
Keywords: Mattel, corporate culture, ethics, Fraud, product safety.
JEL Classificastion: M14.
Introduction
Corporate culture is defined as the shared values and beliefs of individuals within an organization (Stanwick and Stanwick, 2009). Corporate culture is an important concept to examine when researchers attempt to explain unethical behavior within an organization. Previous research in the area has primarily focused on the positive aspects culture that is related to firm performance (Deal and Kennedy, 1982; Peters and Waterman,
1982; Denison, 1990). It is also important to consider that the corporate culture can have negative impact on a firm’s operations if the culture supports unethical and illegal activities. This study examines how one company, Mattel, developed a culture which allowed the unethical and illegal actions of its suppliers to negatively affect its operations.
fixated only on the low price of production of the Chinese suppliers. By allowing the quality standards to drop to potentially dangerous levels, Mattel managers focused only on their own self-interests since their performance was directly linked to the financial performance of Mattel. Therefore, Mattel managers ignored potential safety issues with the production of the toys in China since lower levels of production or higher costs per unit would have a direct
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