Corporate social responsibility (CSR) is a practice by businesses that involves participating in activities and practices that benefit the society. Companies use this as a key to winning consumers in the market. CSR promotes business accountability to all its stakeholders including shareholders, employees, customers and the suppliers. The major keys areas of concern of CSR include environmental protection, employees well being and responsibility to the communities in the present and future.
There are instances of social irresponsibility in the Mattel case. First, the company neglects its duty to the employees. The company introduced the GMP code of conduct to curb some of the social responsibilities that were present with their manufactures. As noticed in Indonesia and Malaysia, workers signed in electronically in the morning but never signed out in the evening. This shows that these works worked overtime and the factories in these countries were hiding this. In china, the employees lived in uninhabitable dormitories (Sethi, Veral, Shapiro & Emelianova, 2011). In addition, workers in the Chinese plants worked way past the maximum hours allowed under the regulations.
In china again, benefits and deductions to the employees were against the Chinese labor laws. Plants such as GY, MEC, and CA, in China were not extending any benefits such as leave to the employees. In addition, after the first round of audits, GY allowed a one-month leave for three years tenure, CA allowed 45 days of leave and MEC complied with the law. It is clear that even after audit reports are released, Mattel factories take no heed in adhering to the regulations (Sethi, Veral, Shapiro & Emelianova, 2011). They do not tend to recognize that they have a duty of care to the employees.
Another instance of corporate irresponsibility presented by Mattel is lack of environmental protection. In Indonesia auditors found presence of chemical odors, noise levels and although PPE was available, it was not being enforced. Noise pollution was at the 90 dB level against the 85 dB level allowed by law. In china again, the plants were not adhering to the environmental, workers health and safety issues. Maintenance of facilities was not done according to regulations.
Failure to be socially responsible for Mattel has resulted to negative effects. The company has in the past had to recall its producers after they were deemed unsafe. This presents a failure to the duty to the shareholders. The shareholders have invested their money in expecting for returns. The management is expected to bring in good returns but it has been failing the shareholders.
Being socially responsible does not mean doing big things to the communities. It starts right at the organization level. The first responsibility of any organization is to its employees and shareholders. With the development in technology, customers have become increasingly informed and enlightened and are against socially irresponsible organizations. In addition, in most of the instances, Mattel has waited for the audit reports to make changes. In today’s competitive markets, an organization has to go beyond the regulations to be socially responsible (International Institute for Sustainable Development).
As with the case of Mattel, social irresponsibility affects the brand image and reputation of an organization. Customers’ suppliers and investors do not want to be associated with a socially irresponsible organization. Organization need to improve on their CSR strategies. It is important to introduce trainings for the employees and the management to be informed by what it means to be socially responsible.
International Institute for Sustainable Development. Coporate social responsibility (CSR). Retrieved July 29, 2016, from https://www.iisd.org/business/issues/sr.aspx
Sethi, S. P., Veral, E. A., Shapiro, H. J., & Emelianova, O. (2011). Mattel, Inc.: Global Manufacturing Principles (GMP)–A Life-Cycle Analysis of a Company-Based Code of Conduct in the Toy Industry. Journal of Business Ethics, 99(4), 483-517.
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