Virtue Ethics and Mattel's Case - Essay Example

? Virtue ethics and Mattel’s case: Doing what is right as a “good” company 25 August The 1990s witnessed heightened consumer and non-government organizational action against sweatshop factories and multinational companies (MNC) that take advantage of weak industrial relations policies in developing economies (Sethi et al., 2011, p. 485). These activist organizations and consumers called for greater transparency and corporate social responsibility in managing worker and environmental issues. In response to these pressures, Mattel Inc. formed its Global Manufacturing Principles (GMP) in November 1997. GMP covered diverse workplace concerns, such as child labor, wages and hours, forced labor, discrimination, product quality and safety, among others (Sethi et al., 2011, p. 484). The article “Mattel, Inc.: Global Manufacturing Principles (GMP) - A Life-Cycle Analysis” described and analyzed the strengths and weaknesses of Mattel’s GMP. This paper seeks to define applicable virtues to the Mattel Case. It discusses the role of justice, truthfulness, and courage as the right virtues that guided and can further assist the actions and policies of Mattel, and it also argues that virtue ethics is the most useful ethical framework in analyzing the case, because it is the only framework that can sustain GMP, despite widespread lack of consumer and industry support. Several virtues are paramount in Mattel’s case, including truthfulness, because one of GMP’s main strengths is its transparent disclosure of its ethical problems through the creation of an independent outside auditing group called Mattel Independent Monitoring Council (MIMCO). Truthfulness is the nature of providing the right facts and information to concerned stakeholders (Ferrell, Fraedrich, & Ferrell, 2011, p. 162). Truthfulness is also called honesty, where people avoid deceiving others, even when the truth may harm the former (Ferrell et al., 2011, p. 162). Sethi et al. (2011) asserted that GMP helped Mattel to be truthful to its shareholders, consumers, and society in general, because compared to other companies’ code of ethics, GMP is unique for its “detailed operational standards and performance measures” (p. 489). These standards and measures provide tangible scorecards for the effectiveness, or lack thereof, in GMP’s ability to meet its own principles and goals. Truthfulness also means reporting regularly to the board of directors and top management, who at the beginning of GMP, were dedicated to realizing the virtues of their program. They wanted business ethics that had clear standards and measures, and Sethi et al. (2011) helped provide those necessities. The main concern with GMP is the clash between the truthfulness principle and actual reporting practices. After finding problems with one of Mexico’s Mattel plants, operational level managers greatly pressured MIMCO to change its draft report, and suggested that the council overreacted to “isolated instances” (Sethi et al., 2011, p. 497). MIMCO received a “list of changes in language” and were asked to include them in the draft report (Sethi et al., 2011, p. 497). This challenge shows the difference between operational managers’ and top management’s commitment to GMP. Apparently, commitment discrepancy exists between the top and operational managers, which undermine the truthfulness of GMP. Courage is another virtue that does not depend sacrificing people’s lives, but on moral courage, where people are not afraid to know and to accept the truth, as well as to use the truth to do what is right (Harper, 2008, p. 197). Solomon (1993) argued that moral courage concerns a process of understanding the big picture, the mission and goals of the organization, and how the organization can attain the best intentions (p. 48). It refers to sticking to the best intentions, however difficult it might be. Being courageous can then be related to truthfulness, because the brave does not fear the truth. When Mattel asked Sethi to lead the formation of MIMCO, it shows a leap of courage. Having an independent and outside board demonstrates the willingness of the organization to know its vulnerabilities and to learn from it. Mattel’s top management is not afraid to know where it is doing something wrong, because they are dedicated to making them right once more. Despite this concern for doing what is right, Mattel wavered in its commitment to GMP. When Eckert became the new CEO, he wanted to stay dedicated to GMP, even when there are pressures to cut costs and to respond to budding manufacturing and marketing issues (Sethi et al., 2011, p. 490). In reality, after nine years of GMP operation, Mattel dropped it to focus on other operational concerns. Product recalls happened consecutively, and soon, organizational political support was not enough to sustain GMP. At this point, Mattel experienced problems inside and around it, and it capitulated to the easiest resolution- giving up GMP to shift focus and resources on cutting costs and dealing with product safety and quality issues. Mattel failed to demonstrate constant moral courage. To use figurative language, “moral courage is integrity under fire” (Solomon, 1993, p. 48), and Mattel lacked the integrity to relentlessly pursue its GMP. Justice is fundamental to Mattel because it affects GMP’s policies, procedures, and outcomes. Justice concerns being fair to others and responding to unjust policies, procedures, and outcomes (Ferrell et al., 2011, p. 163). In business, justice refers to the rules and procedures that people use to attain justice, when making decisions (Ferrell et al., 2011, p. 163). Justice concentrates on giving people what is due to them, by respecting their rights and fairly rewarding perceived performance in the workplace (Ferrell et al., 2011, p. 163). To evaluate the fairness of ethical decisions, three kinds of justice are often used. Distributive justice is the first form of justice, and it pertains to evaluating the outcomes of business decisions and transactions (Ferrell et al., 2011, p. 163). For Mattel, it seeks to promote distributive justice because it is concerned about the equity of its decision outcomes. The company promotes fair hiring and workplace conditions, for instance, that served workers’ interests. On the contrary, Mattel cannot attain distributive justice, when its licensees are concerned. GMP applied only to companies owned and/or managed by Mattel, which does not include licensees (Sethi et al., 2011, p. 496). Justice for all employees cannot be attained through selective auditing policies. Furthermore, social justice requires sharing with those in need (Dierksmeier & Celano, 2012, p. 258), and though Mattel financed many reforms for other plants, it could not sustain these efforts in the long run. The second form of justice is procedural justice. It concerns creating policies and procedures that result to fair outcomes (Ferrell et al., 2011, p. 164). Mattel’s GMP has high procedural justice because it has an independent and outside committee that formed its standards and checklist of performance measures. By consulting outside experts, the company enhances the quality of its standards and measures and the credibility of its GMP. Procedural justice is weak, however, because Mattel could not align vendors and licensees with its GMP (Sethi et al., 2011, p. 484). If related parties that bring in significant profits to the company does not honor GMP, it questions the validity of GMP for Mattel’s entire operations. The third form of justice is interactional justice. This justice evaluates the fairness of the communication processes used in business dealings (Ferrell et al., 2011, p. 164). Interactional justice is low in Mattel because of low employee knowledge of GMP. Sethi et al. (2011) discovered that 70% of workers in GY and CA plants are not aware of GMP (p. 504). Without this awareness, employees are not conscious of their rights and duties, which derails the effectiveness of GMP. Since these virtues are fundamental to analyzing Mattel’s case, it shows that virtue ethics is the most useful ethical framework in analyzing the case, because it is the only framework that can continue GMP despite prevalent lack of consumer and industry support. Mattel dropped GMP because they found no business imperative, when competitors lacked the same “robust and transparent form of code compliance” (Sethi et al., 2011, p. 485). Virtue ethics is the most useful ethics model, because GMP already uses deontological imperatives and utilitarianism may not motivate Mattel to continue its GMP. Kantian ethics say that people must act morally, because it is their duty to do so (Bowie & Bowie, 2004, p. 54). If Mattel continues GMP, it does so because it has sworn duties to be a “good” company that will do the right thing, because it is the right or virtuous thing to do. Thus, virtue ethics appeals to the value-laden decision of sustaining its GMP because of its incorruptibility (Provis, 2010, p. 5). To be a good company means doing the right thing, not because it is the most profitable or result in the most happiness or pleasure, but because it is the right thing to do. Also, to do what is right is aligned with human nature, according to Aristotle (Koehn, 1995, p. 535). GMP supports rationality that is at the core of humanity. Finally, virtue ethics will rationalize that Mattel should not have forgone GMP because it promotes positive social and corporate outcomes. Virtue ethics is misconceived as concerned only about character or virtues, when it also aims to attain a good life, and a good life is a lived life of virtues (Koehn, 1995, p. 534). Moore (2005) stressed that virtue ethics connects “goods of excellence” or inner goods with “goods of effectiveness” or outer goods, such as money (p. 661). The results are virtuous actions that enable people to realize their highest potentials, potentials that directly affect the company’s bottom line (Dierksmeier & Celano, 2012, p. 247). Kantian ethics is not enough to support the extension of GMP, since Mattel does not find it its duty to do so. Utilitarianism does not convince Mattel too because of its emphasis on maximum level of happiness. Only virtue ethics, especially the virtues of truthfulness, justice, and courage, can promote GMP’s meaning and implications for Mattel. Virtue ethics framework shows that Mattel should continue GMP because it is the right thing to do as a good company. These virtues also emphasize that with the right virtues, employee potentials are maximized, and corporate performance is raised. Hence, to do good is good business too. References Bowie, B., & Bowie, R.A. (2004). Ethical studies (2nd ed.). United Kingdom: Nelson Thomes. Dierksmeier, C., & Celano, A. (2012). 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