The central issue in the Mattel case study is whether it should rely more on in-house production than outsourcing (Jiangyong et al. 2). The McKinsey study recommended that Mattel should maintain in-house production of its core products and outsource non-core product manufacturing (Jiangyong et al. 4). In order to reduce or avoid production and brand issues related to safety and working conditions the company should undertake direct production of 65 percent of its products to facilitate close monitoring and control.
In addition to facilitating close control and monitoring of product manufacture and safety, in-house production promotes innovation and creativity within the company. The company is able to enhance employee involvement and participation, which in turn promotes the culture of innovation and creativity among the employees. This creates a culture of new products, employee motivation, job satisfaction and the overall competitive advantage that is able to keep the company constantly ahead of others.
Other alternatives would be for Mattel to have close monitoring and evaluation programmes of the supplier’s manufacturing process and working conditions. This would be hard to implement and a costly undertaking in the long run. Mattel could also set up its own manufacturing plants in the developing countries or contract suppliers from different developed countries such as China. Monitoring of safety and health provisions would still prove a challenge.
The categories of management theory applicable in this issue are classical management theory, contingency management theory, quality management theory, systems management theory, and quantitative management theory (Kent and Tsang 140).
Organizations need to ensure that all their functions and procedures are effective and comply with standards and regulations. Systems management theory holds the idea that an organization comprises of various parts that must undertake tasks necessary for the proper functioning and survival of the whole system. Proper systems and processes enhance productivity (Kent and Tsang 142).
Contingency management theory bases on the premise that manager’s preferred approaches or actions depend on the variables presented by the situations. In Mattel’s case the action to be adopted must be guided by the available approaches based on the situation (Kent and Tsang 143).
The essence of quality of any product according to quality management theory is its ability to meet needs of the group or person. In order to meet quality, Mattel must address the safety of the kids who are to use the toys they produce (Kent and Tsang 144).
The classical management theory guides the process of finding the best way to manage and perform task. The Management at Mattel has the responsibility to decision making concerning the best approach to address the issue of quality (Kent and Tsang 144).
Jiangyong, Lu, J., Tao, Z., and Yu, Linhui, .Mattel’s Strategy After its Recall of
Miller, Kent D., and Eric W. K. Tsang. “Testing Management Theories: Critical Realist Philosophy And Research Methods.” Strategic Management Journal 32.2 (2011): 139-158.
Products Made in China, 1-9. Retrieved from: file:///C:/Users/Administrator/Downloads/17152387_CASE_STUDY_MATTEL_ARTICLE_1.pdf. Accessed on March 10, 2014.