Corporate and Social Responsibility: Challenges and Successes

Subject: Law
Pages: 8
Words: 2276
Reading time:
8 min
Study level: Undergraduate

Introduction

In the current world, there is a close relationship between the progress of a company with the interaction it has with the community at large. A company usually tries to maximize its sales in the market by attracting more customers while society on the other hand benefits from the goods and services offered as well as the employment opportunities awarded to them. This thus requires a good interaction between the two parties involved. The competition among the various companies is usually good as it ensures continuous improvement of services and goods offered. Thus business organizations should meet their customer’s requirements well and maintain efficient interaction so as to prosper in the market. This is usually accomplished by taking society’s needs and incorporating them into the business organization’s objectives. This essay seeks to explore corporate and social responsibility taking into account its challenges and successes. It takes into account a case study of harmful toys produced and sold to consumers and gives an opinion on whether the actions undertaken by Mattel were socially responsible and ethical, who was responsible for endangering children, how to ensure children’s toys are safe and how the society can protect the children from harmful toys.

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Corporate and Social Responsibility

Every activity undertaken by a business organization in its day-to-day activities is found to have some impact on society. These consequences if not well addressed may have adverse effects on society. Most business organizations have now become responsible for their actions and the impact they have on the community and the environment around them. These actions are usually called corporate and social responsibility and they are aimed at making the company accountable for its actions. The impacts on society and the environment should also be positive to ensure good coordination between them. Although so many companies have implemented it, it has been found not to be an easy implementation for many and some are failing in implementing it.

Mattel recalls

Mattel recalls were executed due to the presence of toys sold that endangered the lives of children. Mattel is a company undertaking business in the development of online games, online videos and toys for children. At one moment the company is reported to have sold toys that were said to have been dangerous for children to use. The toys were found to have a lead coating and that violated the USA rules and regulations on safety issues. This led to various arguments on who was to blame for the mistake. Due to the expansion of the company, it had issued a contract to a company based in China to undertake the painting of the toys. In the process of painting, the company used paint from a different source other than the one stipulated. This led to a compromise in the quality of the paint and the one used had more lead than was allowed by the laws and regulations.

Most of the failure in corporate and social responsibility is a result of businesses viewing it as an extra duty to the business. This should not be the case as the two are interrelated. In the case of corporations integrating it into their business, it would result in improved business operations which would have greater economic returns in the long run and the society at large would also benefit from the developments. In the case of the toy problem, the china-based painter compromised the quality by the use of substandard paint probably with an aim of increasing the profit margins. The toy customers should be provided with toys that satisfy the required standards. This usually improves the customer’s confidence in the producer as was the case for the Mattel toy company before this issue surfaced.

When Mattel got information of its company toys had the lead in their painting, the company stopped further production of the toys by the contractor and an investigation into the problem was launched. The information was later released to the public and the information about the toy problem was availed to the consumer product safety commission which is responsible for ensuring that the products available in the market for consumer use are fit for consumption. The impacts of these toys were reflected in the sales company declining as well as the tainted reputation before the public. The company communicated with its retailers to stop the sale of the toys to avoid further sales. This raised worries among the parents about the safety of their children. In a single month, the company had three recalls. When still undertaking its investigation, Mattel assured the public that the findings would be availed to them once the investigation was over. After the investigations, the contractor responsible for the problem was identified. It was clear that he was not new to this business as he had worked with the company for many years. This meant that the contractor had enough experience in the business and was better placed to know what is good and bad in that particular business; the contractor was in a better position to understand all the regulations governing the conduct of the business activities.

After the investigation was over and the company identified, one of its top executives who later committed suicide. This was followed by another discovery of lead in vehicle models which affected the sales further. Another problem arose from the company’s magnetic toys which had defects in their design. These toys posed danger to the children as was experienced when some children had to undergo a medical operation after swallowing the magnets. This led to a general blaming of Chinese companies.

Mattel undertook a further investigation and provided information about the issue to the people. Although this was a national problem, I think it would have been cautious to have provided the information when all the details about the problem source and those responsible were well known. Releasing information without enough supporting materials would make the company face challenges that it could not be able to handle not because the solution was not available but because there was insufficient information. The company revealed the finding despite the impact they had on the company. This showed some transparency in the company is undertaking its duties.

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The company was observed to have some problems from the many cases which touched on its products. The problems were from motorized wheels, loose screws, magnets and lead paint. Due to these problems and the consequences they had brought to the company, the company had to look into the problems critically and find a way out. Such kinds of strategies are aimed at winning back the customer’s confidence in their products (Ferell, Ferrell & Fraedrich, 2009). To achieve this, the intensive advertisement was undertaken through various media channels available to the people then.

The company blamed the Chinese for the mistake in the production of the toys (Weiss, 2008). This shifted the blame to the Chinese manufacturers who were not happy about it. In their defense, the Chinese companies shifted the blame to the United States-based company for not undertaking it part of its responsibilities. According to Weiss “Chinese original equipment manufacturers were doing the job just as importers requested, and the toys conformed to the U.S. regulations and standards at the time of production; Mattel should improve its product design and supervision over product quality”, (Weiss, 2008, p. 1). After analyzing the response from the Chinese manufacturers, Mattel concluded that they had affected the reputation of the persons involved. A formal apology was provided. Mattel admitted that most of the problems arose as a result of defects in design and that the failure was on their part in designing. It was also confirmed that some of the toys in question had satisfied the regulations.

For effective performance of the overall activities undertaken by a company, there must be good interaction and performance of the parties involved. In the case of Mattel, a failure in one of the contractors affected the overall business performance. The contractor was responsible for endangering the lives of the children. This was not expected of him because he had worked with the company long enough to be well conversant with the rules and regulations on the operation of the business. The contractor was to use the specified paint but instead used a different paint. The paint contained lead which was harmful to the children. The children were to use the toys during playing and would be exposed to some danger. This showed that there was a failure in the supervision of the activities the company was undertaking.

There are organizations and government bodies that are responsible for ensuring the safety of the products before it enters the consumer market. The accessibility of the dangerous toys in the market was an indication of the failure of the regulating body. There are arguments that the statutory body was understaffed. This implies that the body was not in a position to serve the whole country in scrutinizing the fitness of all products at the ports and those manufactured locally in the United States. This, thus, provided loopholes for harmful products to find their way into the market. This is a failure in the government in failing to provide the body with enough financial and human resources for the efficient undertaking of its duties.

To ensure that the quality of children’s toys meets the standard required, then combined effort between different stakeholders such as government regulators, consumer advocates, the toy industry, children’s product retailers and the standard-setting organizations are essential and actually a must. In the case of the toy company, the United States and the Chinese government both have the responsibility. This business has its economic importance to both (Hitt, Hoskisson & Ireland, 2008). The sale of toys to the United States by Chinese companies is a major boost to the government of China. To enhance continued growth and development in this industry, the two governments must ensure that they provide a good atmosphere for the trade of goods that meet the required standard. The regulators should be strict on the standard of the manufactured toys to ensure that they are fit for use by the children (Peng, 2008).

The information about the suitability of the products for use should be availed to the parents. The parents are the ones who are attached too much to their children and in case of toys that are harmful to their children, then they would protect them. In case the problem has occurred and the child of a parent is a victim, then the parent should be provided with legal advice and assistance on how to handle the case. The presence of such strategies would maintain sanity in the industry and everyone involved will be responsible of their actions. The toy industry has the capability of avoiding problems related to harmful toys. These companies undergo these activities in order to make more money for their growth and development. The company should be aware that they can not achieve their objectives if they are in conflict with the customers who are part of the company’s stakeholders. The company should supervise the manufacture of the toys to ensure that the correct measures are adhered to. They should also undertake the testing of the toys that are manufactured by contractors to ensure that they conform to the requirements set. These were some of the resolutions made by Mattel to ensure that they minimize the chances of such problems arising again.

There are rules are regulations governing the sale and production of any good or service. The standards are usually set by the selected organizations. These organizations should ensure that they set regulations that are capable of streamlining business activities. The standards set should be dynamic and flexible to accommodate the various fluctuations in the market. Children’s product retailers should buy their stock from qualified dealers. This assists in ensuring that the toys sold to them are of a good standard and thus do not endanger the lives of our children.

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To ensure that the children are safe while playing with their toys, then there is a need for every stakeholder to play his part. The toy company should oversee the manufacturing process, the governments to ensure adherence to the regulations, the standard makers to make standards that are up to date and the retailers to ensure the quality the buy is of the correct standard. This would ensure sharing of responsibility according to what part one plays in the industry and would be of great help to offering safe toys to our children.

Although the occurrence of the problems in the toy industries was not good as it endangered our children’s lives, it was a good opportunity to learn the weaknesses that may arise and strategize new approaches to them. The negligence, ignorance, or the lack of good performance of an individual can reduce the performance of a business organization to great extent. This usually makes the company lose its market capability, destroy its reputation and make it incur huge fines which are not healthy for any business. Thus any business organization should ensure that all the stakeholders play their roles effectively. The company should undertake its corporate and social responsibility to make sure that the interaction between it and the environment is good for business growth and development.

Conclusion

Business bodies ought to ensure that all their activities are compliant with set standards as pertains to the health and safety of the final consumers. A business organization does not necessarily have to follow the set guideline on the issue of health and safety but has to ensure that its goods are friendly to the customers.

References

Ferell, L., Ferrell, O.C. & Fraedrich, J. (2009). Business Ethics: Ethical Decision Making and Cases. New York: Cengage Learning.

Hitt, M. A, Hoskisson, R. E. & Ireland, R. D. (2008). Understanding Business Strategy: Concepts and Cases. New York: Cengage Learning.

Peng, M. W. (2008). Global Strategy. New York: Cengage Learning.

Weiss, J. W. (2008). Business Ethics: A Stakeholder and Issues Management Approach. New York: Cengage Learning.

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