In 1997, Mattel developed the code of conduct better known as Global Manufacturing Principles (GMP). The code covered aspects such as product safety, wage and hour discrimination, child labor and product quality among other. However, after several audits, it was clear that the code was not being followed keenly. One of the major ethical issues that came out from the audits was the treatment of employees (Sethi et al., 2011). First, the dormitories were in such a bad state in some factories such that they were even inhabitable.

In addition, some of the factories had a one-month maternity; leave which is against the international laws on maternity leave. In other plants, employees did not receive their yearly leaves. In other plants especially in china, workers were compensated well below the standards set by the law. This paper will be analyzing the ill treatment issue as an ethical issue using the utility test.

The utility test applies the utilitarian principle that right and wrong is determined by the outcome. According to this principle, the end justifies the means meaning an action is always right if it brings about the best outcome (West, 2004). Good outcomes are measured by individual preference, happiness, unhappiness, and money in this case being an indicator of preferences.

The utility test is considered a valid way to determine which actions are right or wrong because all people wish to be happy and everybody counts the same. So what is good is what brings out more happiness or least unhappiness regardless of who is affected by it. This is because everyone affected by any action has an equal standing as a person.

Mattel has not been making sure that its contracted manufactures are taking good care of the employees. Issues of concern include dormitories, compensation, maternity leave, and yearly leaves. Mattel can take several alternative actions concerning the treatment of employees. First, the company can decide to follow the international rules. This would mean building more dormitories, which are habitable. The company can also decide that the employees secure their own accommodation instead of relying on dormitories.

Concerning the maternity and yearly leaves, the company has no option than to comply with the set rules. This would mean that the women receive fully paid maternity leave running for the required time while all the employees get the required yearly leave. The same is happening is some factories but disregarded in others. When the employees are not comfortable in their work, productivity will go down (Beauchamp et al., 2004). The effect may not be real in the short run but in the long run, the productivity will go down. The above-mentioned alternatives will have effects on several stakeholders. First, good dormitories will be favorable to the employees though not favorable to the management and shareholders. The maternity and yearly leaves will also be favorable to the employees.

The first alternative action is to build new dormitories for the employees. This will be very helpful to the employees since they will now be comfortable. Though building new dormitories is an increase in cost to the company, it can also lead to increased productivity balancing the increased costs. The increased productivity cannot be realized in the short run but in the long, it can have an effect. However, if it has no change on productivity, then the increased profits will lower profits affecting the shareholders.

The primary interest of the shareholders is increased profits. If the company decoded that the employees secure their own accommodation, then, the employees will be comfortable, but their spending will increase. If the company paid then a house allowance, then the spending problem will be solved. When it comes to the leaves, the best ethical decision is to allow the employees go for leave. This will be beneficial to both the employees and the company. First, the company will eradicate any chances of legal issues for unethical behavior. In addition, the employees will be motivated to work hard thus increasing productivity.

However, to the management and shareholders, both the building of dormitories and offering house allowance increases costs in the short run. Though it might turn up to be advantageous in the end, it is disadvantageous in the short run. Any company strives to make high profits through reduced costs.

The best action that brings out the greatest benefit over costs is for the company to build new dormitories and allow the workers to go for leave. When workers are not allowed to go on leave, they have no time to reflect on their productivity let alone relax their minds and body. Thus makes them unproductive and unmotivated. When the employees are not motivated, the productivity in the long run is low (Beauchamp et al., 2004). However, when the employees are motivated, they are productive and in the long run, the company is productive. Therefore, building new dormitories will increase the cost but such costs will be covered in the long run by the increased productivity. At the end of the day, the employees will be happy and the increased productivity will make the management and the shareholders happy.

If the above actions were a policy, then Mattel would have no choice than to follow the policy. This would mean build new dormitories and allow the employees to go for leave. The issue of the employees’ productivity would not be determinant of the decision. The effects of the policy on the employees would determine productivity.

The best action is to build new dormitories for the employees since it will make them comfortable and more productive. If this were a policy, the company would in the long run become very productive both economically and socially. Building new dormitories would result in the best results as compared to other alternatives such requiring employees to secure their housing. Securing own housing would call for a house allowance which is repetitive but building new dormitories is one time cost which can be recovered in the long run.

Now that this is the best action for all parties involved, then it is an ethical behavior. As stipulated by the utilitarian principle, an action is right if it yields the best outcome. Thus, the building of dormitories and allowing employees to go on leave is a very ethical behavior.

References

Beauchamp, T. L., Bowie, N. E., & Arnold, D. G. (Eds.). (2004). Ethical theory and business.

Sethi, S., Veral, E., Shapiro, H., &Emelianova, O. (2011). Mattel, Inc.: Global manufacturing principles (GMP) – A life-cycle analysis of a company-based code of conduct in the toy industry.Journal of Business Ethics, 99(4), 483-517. Retrieved from ProQuest.

West, H. (2004). An introduction to Mill’s utilitarian ethics. Cambridge, U.K.: Cambridge University Press.

 
Do you need an Original High Quality Academic Custom Essay?