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A responsible investment

March 9, 2009

“Prevention is better than cure.”

When Dutch humanist Desiderius Erasmus spoke these words at the turn of the 14th century, he probably wasn’t thinking about corporate public relations. However, these words ring true to the tune of social responsibility in today’s corporate world.

While some companies are built on the notion of good corporate citizenship, others need incentive to recognize social responsibility as a worthwhile cause. A public crisis forces a company to look at its public image and consider its relationship with the community. Generally, organizations with strong community relationships are more likely to survive crises than those companies who have not already invested in social responsibility.

Mattel, Inc.

Mattel recalled 19 million toys in 2007.

Some recalled toys had up to 180 times the legal lead limit.

Mattel, Inc., the world’s largest toy company, has been recognized as a responsible corporate citizen for decades.

The company has been a leader in employee health and safety regulations, releasing its Global Manufacturing Principles in 1997 to ensure fair treatment of employees around the world.

The company has remained transparent in these efforts, releasing its public Global Reporting Initiative reports annually to rate the success of these principles.

Also in 1997, the Mattel Children’s Foundation was established and one year later, the company donated $25 million to the children’s hospital at UCLA. The hospital is now called the Mattel Children’s Hospital at UCLA and was rated among the nation’s top children’s hospitals by U.S. News in 2008.

2007 Recalls

Since its foundation in 1945, Mattel has seen its share of product recalls. But in 2007, the company issued its largest safety recall ever. Mattel’s Fisher-Price subsidiary recalled more than 19 million toys in August 2007, after finding parts had been distributed containing dangerous lead-based paint and unsafe magnets.

The U.S. allows lead-based paints to contain only .06 percent lead. However, paint on some of the toys Mattel recalled was found to be up to 11 percent lead – 180 times the legal limit. The high-energy magnets on the recalled products were easily ingested and could cause very serious damage to children’s digestive tracts.

Response

Parents were outraged by the toxic levels and dangerous magnets found in Mattel’s products, and the company knew it had to respond accordingly to maintain its public image. When federal officials announced the recalls, Mattel public relations personnel immediately contacted reporters at the top 40 media outlets.

CEO Robert Eckert gave public interviews and the company took out several full-page ads in publications such as the Wall Street Journal announcing the recalls. The company also launched a campaign on the Internet warning parents of the dangerous defects and updated its recall Web site regularly.

The company took full responsibility for the recalls and was upfront and thorough in its apology. Mattel continued to communicate its dedication to child safety and stricter inspections long after the recalls were initiated. Mattel also created a Corporate Responsibility division, appointing Vice President of Corporate Responsibility Geoff Massingberd to develop and implement more responsible practices.

Social Responsibility Pays Off

The company’s continued social efforts have positioned Mattel as a strong and trustworthy company dedicated to the betterment of society. Despite the 2007 recalls and the lawsuits that ensued, Mattel has maintained the respect of the corporate world. The Corporate Responsibility Officer recently released its “100 Best Corporate Citizens 2009” list, rating Mattel, Inc. as seventh.

At 50, Barbie is still a good corporate citizen.

At 50, Barbie is still a good corporate citizen.

Because Mattel was such an established corporate citizen before the recalls, I think the company was better prepared to weather the crisis and its effects. The company had been making social contributions for decades and built a strong bond of trust with its shareholders and consumers, as well as its external audiences.

As Barbie turns 50, she can remain a proud corporate citizen. And a nurse, doctor, gymnast, princess and whatever else she wants to be.

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One comment

  1. […] community relations can mean the survival of a family-oriented business through a crisis, as Mattel saw in 2007 . But building strong relationships with consumers can require large amounts of time, effort and […]



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