Introduction
As business becomes increasingly global, it is important that corporations consider the many implications of
operating on a worldwide platform. Many of these implications include the effects of outsourcing their production to
various parts of the world, as well as the consequences of selling their products in different countries. However, one
of the most important aspects of business has not changed due to these modern developments – delivering highquality
products that meet standards of consumer safety. The summer of 2007 saw Mattel, Inc., one of the world’s
largest toy manufacturers and distributors, fall short of safe product standards when some of the toys bearing
Mattel’s Fisher-Price trademark were found to contain dangerous lead paint. Nearly 100 of these unsafe products
were manufactured in China, yet it is interesting to note that the company is no stranger to outsourcing much of their
manufacturing to this low-cost alternative. Mattel’s success as a toy brand lies primarily on their claims to deliver
products, “…keeping with our long-standing tradition of innovation, quality, durability, safety, and good value, we
offer products and services consumers can trust to improve their family’s lives1.” With a product liability scandal
looming over the Mattel brand name, the continued success of the company is unclear.
Facts
On August 2nd, 2007, Mattel, Inc. (NYSE: MAT), in conjunction with the U.S. Consumer Product Safety
Commission, recalled 83 products from their Fisher-Price line. In all, 987,000 toys, all manufactured in China, were
named in the recall. Mattel’s recall was based on their discovery of the use of lead-containing paint on the products.
On August 7th, 2007, Ann Mayhew filed a class-action lawsuit against Mattel, Fisher-Price (a Mattel-owned brand),
and Target Corporation (NYSE: TGT, a national retail chain and distributor of the tainted products) in Los Angeles
Federal Court. In the pending case, Mayhew v....