Introduction The critical evaluation of corporate processes and structures concerning social and ethical conflict potentials, and the control of the effectiveness of implemented ethic directions...

Introduction

The critical evaluation of corporate processes and structures concerning social and ethical conflict potentials, and the control of the effectiveness of implemented ethic directions provides background to the Mattel Inc. case study.
This assignment paper attempts to focus on provided instructions such as:

1. Choose three “virtues” and provide a clear definition of each. For example, such virtues as temperance, justice, honesty, fairness, generosity, or kindness.


2. Apply each of the three virtues to the case, and how each of the virtues chosen might have been used to appropriately guide the actions and policies of the company. Discuss how each relates to such issues as working conditions, worker safety, fairness, organizational attitudes toward the environment, etc.


3. Which of the three normative ethics – i.e. deontological, utilitarian, or virtue – is most useful in evaluating the Mattel case. Why?

First Issue: three virtues

Courage
Most virtue ethics theories take their inspiration from Aristotle
According to Aristotle, “Courage is the first of human virtues because it makes all others possible”. (Aristotle, 934, III3b5-8).
Saint Thomas Aquinas moral philosophy is a merger of Aristotelian theory and Christian theology. He said that courage is a cardinal virtue. Those with courage will also have a considerable degree of endurance. “For one must be able to “stand immovable in the midst of dangers,” especially those dangers that threaten bodily harm and death”. Aquinas underscores the value of what the courageous person seeks to attain by executing his action with a “greatness of purpose”. Thomas Aquinas, (1922).
Honesty
Stanford Encyclopedia of Philosophy states, a virtue such as honesty or generosity is not just a tendency to do what is honest or generous, nor is it to be helpfully specified as a “desirable” or “morally valuable” character trait. It is, indeed a character trait—that is, a disposition which is well entrenched in its possessor, something that, as we say “goes all the way down”, unlike a habit such as being a tea-drinker—but the disposition in question, far from being a single track disposition to do honest actions, or even honest actions for certain reasons, is multi-track. It is concerned with many other actions as well, with emotions and emotional reactions, choices, values, desires, perceptions, attitudes, interests, expectations and sensibilities. To possess a virtue is to be a certain sort of person with a certain complex mindset. (Hence the extreme recklessness of attributing a virtue on the basis of a single action.) An honest person's reasons and choices with respect to honest and dishonest actions reflect her views about honesty and truth—but of course such views manifest themselves with respect to other actions, and to emotional reactions as well. Valuing honesty as she does, she chooses, where possible to work with honest people, to have honest friends, to bring up her children to be honest. She disapproves of, dislikes, deplores dishonesty, is not amused by certain tales of chicanery, despises or pities those who succeed by dishonest means rather than thinking they have been clever, is unsurprised, or pleased (as appropriate) when honesty triumphs, is shocked or distressed when those near and dear to her do what is dishonest and so on.” (Stanford Encyclopedia)
Justice
According to Saint Thomas Aquinas, “The virtue of justice, however, governs our relationships with others. Specifically, it denotes a sustained or constant willingness to extend to each person what he or she deserves”. Aquinas makes two general distinctions: (1) legal (or general) and particular justice, and (2) commutative and distributive justice. “The purpose of legal justice is to govern our actions according to the common good”. Justice is thereby a general virtue, which affects not individual benefits but community welfare. According to Aquinas, “everyone who is a member of a community stands to that community as a part to a whole. Whatever affects the part also affects the whole. And so whatever is good (or harmful) for one will also be good (or harmful) for the community of which one is a part. For this reason, we should expect the good community to enact laws that will govern its members in ways that are beneficial to everyone. This focus—the welfare of the community—is what falls under the purview of legal justice”. Aquinas however states, that legal justice does not appear to be altogether different from other virtues. “After all, courage, temperance, and prudence are just as likely to contribute to others’ welfare as legal justice. Yet these virtues differlogically from legal justice because they have specific objects of their own. Whereas legal justice concerns the common good, prudence concerns commanding action, temperance concerns curbing concupiscent passion, and courage concerns strengthening irascible passion against fear. To put the matter as baldly as possible, the purpose of the other virtues is to make us goodpeople; making us goodcitizens is the end at which legal justice aims” (Thomas Aquinas, 1922).

Second Issue: Mattel, virtues and ethics



Justice:

Aristotle defines this as a) giving to each his due, and b) basic fairness in ruling and being ruled. The common good (common happiness and satisfaction) must be the final end. Chinese workers seem to be required to get a fair wage, relative to the amount of value they create in their daily work. There must be a basic minimum wage that Mattel adheres to. The typical Marxist idea is that the surplus value is that between what is paid in wages and the value of the toy that is sold on the market. Yet, there is also a mean – the company cannot become so virtuous that it falls against its competition. There must be a happy medium. Both virtues and utilitarian ideas work in this instance. (Marx is a sort of utilitarian).

Courage:


Basic standards must be applied within the company’s means. Stand up to harsh suppliers and demand basic ethical treatment of labor.

Honesty:

Honesty applies concerning the cooperation between the auditor’s and Mattel. But honesty might also demand that the firm be up front about its own problems. Their financial situation in a competitive environment might permit only the very spotty compliance that the Mattel case study seems to stress.
The three virtues have obviously been violated.
Lets consider that nothing will work if Mattel goes out of business. Hence, there must be a compromise between the company and the very high standards they are meant to enforce. The reality of the present recession, a highly competitive environment, and demands of both stockholders and customers force the firm into a non-optimal ethical conclusion, “Our compliance cannot be total or complete – it can only be partial”(Sethi, 2011). Maybe (maybe) the virtues will work best. Since we want happy workers (that is in our interest), but we cannot enforce these standards with rigor, as we’ll be undersold by foreign firms. Going out of business will satisfy nobody.
Mattel seems to want to do the minimum – a few areas of change, lots of violations. Their record is mottled. Why is this? It might be because the firm is not unified – different parts of the firm might think differently. It might be because competition in this market is fierce, and if no other firm is going through these audits, why should Mattel have this handicap? The concept is that these regulations hurt the competition; Chinese or Korean firms might undersell them.
The utilitarian might hold that spreading satisfaction around is needed. Workers need to be treated fairly, but not so that the consumer in the first world ends up paying far more than needed. The regulations, in other words, are both expensive and needed. Utilitarian ethics would create a problem, since there is a) the happiness of the worker and b) the happiness of the consumer. This became a problem when Mattel almost went bankrupt around 2000. How much can they enforce when they are near bankruptcy? No one will be happy if Mattel must shut its doors. Maybe utility and the virtues are similar here – they might need each other to make sense of the whole.
The utilitarian might point to those areas where workers seem happy. In Asia, there is some reason to believe that standards (expectations) are lower, and therefore, workers are better off with Mattel than with a local firm that might treat them worse. Since it is normally the case that foreign firms pay better than local ones (in the third world), Mattel is already increasing the happiness of both workers and consumers even with only a little compliance. One can argue that, even if Mattel is not totally compliant, they still treat workers better than the average Chinese owned toy manufacturer.
The deontological concept is important, as it is the strictest. No worker can be treated as a means. They are human beings, and must be treated as ends. This means that any abuse whatsoever is bad and should be stopped. The worker must come first in this system (I think). The question is: is it realistic that (in a very competitive environment) this sort of ethics can ever be enforced? Given the nature of the system – probably not. Mattel did not create the present system – they are forced to work within it.
What of local standards? They seem to be more lax than the standards Mattel’s top management has enforced. They could argue (along utilitarian lines) that U.S. firms are better than local firms in terms of worker treatment. Since we go beyond local standards, we’re doing ok, and the locals do not have the high expectations than U.S. workers do. This can be used to fudge the nature of the standards by holding that locals are used to worse conditions.
Stanford Encyclopedia quotes suitably:
“The most significant aspect of this mindset is the wholehearted acceptance of a certain range of considerations as reasons for action. An honest person cannot be identified simply as one who, for example, practices honest dealing, and does not cheat. If such actions are done merely because the agent thinks that honesty is the best policy, or because they fear being caught out, rather than through recognizing “To do otherwise would be dishonest” as the relevant reason, they are not the actions of an honest person. An honest person cannot be identified simply as one who, for example, always tells the truth, nor even as one who always tells the truth because it
is
the truth, for one can have the virtue of honesty without being tactless or indiscreet. The honest person recognizes “That would be a lie” as a strong (though perhaps not overriding) reason for not making certain statements in certain circumstances, and gives due, but not overriding, weight to “That would be the truth” as a reason for making them.
In scandals concerning social improprieties the consumer regularly blames the “brand-name” for the neglect despite the fact, that actual production took place in far away places by independent suppliers, and corporations such as Nike or Toy”R” Us have experienced such issues. In 2007 Toys “R” Us had to remove millions of Mattel toys from its shelves – losing roughly 30 million US dollars in the process - because the independent Chinese supplier in Hong Kong (who committed suicide over this issue) exported toys to Mattel, which contained lead-based paint. This caused the largest recall of toys in history.
In studying the Mattel case, and reading several articles in the Proquest Library such as:

1. China jewelry makers say toxic metal cuts cost….


2. Chinese toy factories take hit; Signs of sharp economic slowdown everywhere…


3. Asia Inspection: Toys safety: an expert…


4. The Asian Wall Street Journal, of Melamine and Lead….

guides to the following: “Mattel, Inc., is a company driven by economic and market considerations. Its business practices, apart from GMP, are no different from most other companies in the toy industry. When it comes to corporate social responsibility (CSR) and good corporate citizenship, the company uses it as a thin patina to wrap around its “business as usual” modus operandi. The primary intent of the GMP was to embed CSR and make it an integral part of corporate strategy and operations” (Sethi, 2011).
It is my opinion that Mattel needs to comply because, under the standards of global competition, it is the right thing to do. Not just because they want to avoid coming under attack. Workers need to be treated fairly because it is correct. The fact that happy workers might be more productive is good, but not the main reason. A utilitarian might hold that happy workers being more productive are the best policy under present circumstances. Virtue ethics takes context into consideration. Global competition does justify (to an extent) the usage of local standards rather than the very high standards of the code.
References

1. Sethi, S., Veral, E., Shapiro, H., & Emilianova, 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 Retrieved August 02, 2012


2. The Asian Wall Street Journal, of Melamine and Lead, Anonymous. The Wall Street Journal Asia. Hong Kong: Nov 28,2008. Pg. 12

Retrieved Aug. 14,2012

1. Chinese toy factories take hit; Signs of sharp slowdown everywhere. James Pomfret. The Province. Vancouver, B.C.: Dec 14, 2008.pg. A.46

Retrieved Aug 14, 2012

1. China jewelry makers say toxic metal cuts cost, Alexa Olesen. The Hutchinson News, Hutchinson, Kan: Jan 13, 2010

Retrieved Aug 14, 2012

1. AsiaInspection: Toys safety: an expert of Made in china quality shares his opinion a few days before Christmas, Anonymous. M2 Presswire (Coventry) 30 Dec 2008. The Asian Wall Street Journal, of Melamine and Lead. Anonymous. The Wall Street Journal Asia. Hong Kong: Nov 28, 2008. Pg. 12

Retrieved Aug 14, 2012

1. Saint Thomas Aquinas, Summa theological, (London: Burns and Oates Ltd., 1922), II.Q123, A.3


2. Thomas Aquinas: Moral Philosophy, (Internet Encyclopedia of Philosophy)


3. Retrieved Aug 8, 2012


4. Aristotle, Nicomachean Ethics, Harvard University Press, Cambridge, Massachusetts, London, England, First Published 1926, Revised edition 1934

ISBN 978-0-674-99081-4, pages 99, 158, 259

1. Stanford Encyclopedia of Philosophy, Aristotle’s Ethics

Retrieved Aug 12,2011