Mattel Crisis Management

Walden University

Shaunellia Ferguson

Final Project: Comprehensive Leadership Case Study Analysis: Crisis Management

1. Client engagement: Identify the issues and concerns the client would like to address.

             Take this from the perspective of Sinclair.

             Why are you being brought in to consult? What are the presenting issues for Mattel they must address ASAP? What are the anticipated outcomes of the consultation/partnership?

The issues and concerns that Mr. Sinclair has with respect to Mattel are centered around the use of lead paint on the toys they manufacture worldwide. One of his concern involves the fact that the suppliers were cutting corners to cut cost and meet deadlines. Based on the information provided,  lead paint was cheaper than paint that did not contain lead. The assumption is that western companies contributed to this because they place a lot of pressure on their Chinese partners to keep the cost at a low level and expedite delivery (Standford Graduate School of Business, 2008, p.2).  

Another concern of Mr. Sinclair involves the fact that the suppliers Mattel have contracts with are using subcontractors that Mattel does not supervise directly and despite the fact that 20 employees are  based in China and are responsible for training the suppliers, there are still issues concerning supervision and inspection because these employees are not permanently stationed at the factories of suppliers. In addition, communication is a big problem as it relates to the suppliers notifying Mattel when there are issues concerning the lack of the correct type of paint without lead.

There is also the lack of consistency with regards to the use of subcontractors that are not certified with Mattel. As such, there is a breakdown of communication and the regulatory rules set in place with Mattel and the original suppliers are not being met. For one, the policies that are currently in place are not sufficient to oversee such al large and technical operation involving various players.  Product safety is Mr. Sinclair’s  first and foremost concern and there is no

technology being used to ensure that the toys that are being manufactured by Mattel are lead-free and are safe for children to play with.

Based on the interview with Mr. Sinclair, the above-mentioned issues should immediately be addressed and remedied in order to maintain the organization’s reputation and not suffer any more potential losses. Mr. Sinclair will have to be flexible enough to take on the role of a crisis leader and implement strategies to combat future fallouts based on the nature of the current crisis.  Lussier and Achua (2015) postulate “ to be effective, a crisis leader must have the power, resources, position, and stature to influence events when a crisis erupts” (p.431).

As the I/O practitioner, I am being consulted to assist the organization in deescalating the crisis by providing guidance that will help Mattel plan for before, during and after any crisis encountered. The overall benefit of the crisis plan, according to Lussier and Achua (2015) will help to enhance Mattel’s reputation and reduce the length of time it will take to remedy the problem being faced by the organization (p.433).

To conclude, the anticipated outcome of the consultation is that I will provide a tailored rapid response execution plan along with thorough analysis. As the consultant, I will manage the crisis and assist Mr. Sinclair in formulating a  rigorous contingency plan to ensure that Mattel is prepared to deal with other developments and ensure business continuity.

1. Diagnosis: What do you assess?

1. Based on engagement with the client, what assessments would you use to verify the actual challenges/ issues (the client’s leadership communication skills, effectiveness, competencies)?

The Interview with Mr. Sinclair revealed that Mattel will have to aggressively focus on restoring its image and consumer confidence. First and foremost, Mr. Sinclair will have to be more visible to the public and be the “ face” of the organization. He will be expected to communicate with stakeholders, the public, employees, regulatory bodies and the news media because several questions need to be addressed. According to Lussier and Achua (2015) The four questions that will be asked range from “ (1) what happened, (2) how did it happen, (3) what’s being done to address the crisis and (4) what has been done to ensure it never happens again?” (p.440).  

Based on the interview, it is apparent that there is a serious breakdown of communication and leadership is not effective in the daily operation of the contract with the corporation’s partners and communication needs to improve. For example, when the supplier ran out of paint, that should have been communicated to Mattel immediately in order for the company to solicit business from another potential supplier. Communication breakdown was also evident in the fact the government regulations were not enforced along all lines and Mattel and its contractors and suppliers did not have the same agenda.

Additionally, the fact that the 20 employees that Mattel had stationed in China did not work permanently in the factories also contributed to the crisis. In addition, since suppliers resorted to using noncertified subcontractors, there was no way to actively monitor the process and ensure that all the required guidelines with respect to using the correct paint were being met.

It should also be noted that the current policies and procedures in effect to address the daily operation were also not adequate enough and it does not appear as if there were checks and balances in operation to ensure that the 20 employees were training the suppliers properly or the inspections that were required were being carried out effectively. The crisis proved that more could be done to ensure that the products manufactured were safe to distribute to the public and for children to play with.

Another major issue involves transparency, honesty, and response.   Mattel was very swift in intercepting the shipment headed for France when the crisis initially struck, however, the company failed to report the problem immediately because the product was not being sold in the United States (Stanford Graduate School of Business, 2008, p.3).

Cultural sensitivity issues are also prevalent because Mattel also failed to handle the situation correctly when it cited that Lee Der and its subcontractor supplier were the sources of the problem.  The fact that his company’s name was released to the public led to Mr. Zhang committing suicide and that could have been avoided. In addition, Mattel offended its consumers because, after the crisis calmed somewhat, the organization sent a representative to China to apologize to the Chinese government and yet again caused another public relations nightmare which led to the involvement of the United States government.