Mattel's
Commitment to Ethics
Introduction
Mattel, Inc., with $4.5 billion in annual revenues, is the world leader in the design,manufacture, and marketing of children’s toys. The company’s major toy brands include: Barbie (with more than 120 different Barbie dolls), Fisher-Price, Disney entertainment lines, Hot Wheels and Matchbox cars, Tyco Toys, Cabbage Patch Kids, and games such as Scrabble. In addition, Mattel promotes international sales by tailoring toys for specific international markets, instead of simply modifying favorites in the United States. The company’s headquarters are situated in El Segundo, California, but Mattel also has offices in 36 countries. In fact, this company markets its products in more than 155 nations throughout the world.
This marketing prowess has paid off. For example, in a 1997 survey conducted by the annual Power Brands study, Mattel had the most popularity among consumers. As many as 4 out of 10 people said if they were shopping for toys, Mattel is the brand they most prefer. Retailers also singled out Mattel as the number one performer, with over 6 out of 10 mentions. This survey clearly proved that both children and adults are enthused about Mattel and its line of products.
This top manufacturing company for toys is presently under the managerial control of CEO Jill Barad. The chief executive’s management style has been characterized as strict, business and people-oriented. When Ms. Barad was named chief executive in January 1997, Mattel’s stock was trading for less than $30 a share. However, by March 1997, it rose to more than $46. Jill also helped build the sales of Barbie from $200 million in 1982 to $1.9 billion in 1997. Some of her current challenges grew more difficult in 1998. Mattel announced in October 1998 that earnings growth for the year would be between 9 and 12 percent, rather than the 18 percent that Wall Street had anticipated. This, in turn, is due to the declining sales to Toys "R" Us, the retail chain that accounted for 18 percent of Mattel’s revenue in 1997. Ms. Barad stated in an interview that if performance continues to deteriorate sharply, the generous rewards given to employees may have to be cut back. In other words, holiday time and overtime will be shortened. Many analysts, however, have said that Mattel’s overall strategy is sound and that the company should rebound to outperform most stock-market indexes. Part of Mattel’s longevity can be traced to popular products, including Barbie, Hot Wheels, and Cabbage Patch Kids.