Mattel Inc. was hit with a devastating blow in 2007 when it learned that many of its factories in China were producing products with paint that had dangerous levels of lead. Originally the company thought that it was an isolated issue; “a single failure, from a single vendor who made a big mistake.”(3) Soon it realized that this was in fact not the issue, and that it was a wide spread crisis. Some of Mattel’s trusted producers had apparently opted for a cheaper paint outside of Mattel’s approved list of paint suppliers. This decision by the vendors ultimately resulted in a very unfortunate situation for Mattel.
The negative impacts that this ordeal had on Mattel definitely tarnished its reputation as one of the top toy companies in the world. However, if they did not publically announce this safety issue and had kept it away from the public it would have been an unethical and immoral decision. Despite the fact that this calamity had a huge negative impact on the company, it had a moral obligation to protect its stakeholders and spend capital to revaluate the safety of all Mattel products.