Toy Company Case Study

(a) Currently, the use of lead in paint is prohibited for toys sold in the United States, but companies are permitted to sell toys made of plastic that has been treated with lead to make it more flexible even though research shows the toys may be harmful to children. As a CEO of a toy company, what is your responsibility?

Generally, the responsibility of a CEO is to operate an ethical business - achieve both interests of the company (profitability) and ethics. For example, in order to make the business profitable, CEO has the responsibility to minimize the cost of purchase by importing cheap toys produced in China for the aim of cheaper labour cost. Companies can earn more profit when cost is reduced and eventually maximize shareholder’s profit.

Companies usually have a misconception of ethical , legal means, assuming the company conducts ethical business if it obeys to the law. Therefore, companies think that it is truly ethical to sell since there is no restriction incurred. In my opinion, I think it is unethical to sell this kind of toys as consumers expect toys they buy are safe for kids, and should have a certain level of safety standards, especially well-known and reputable toy brands. Companies also have corporate social responsibility, which means to be responsible for any impact on their products by assuring they are not harmful mainly the toys are for children. If companies are being responsible, they can achieve reputation effects that will attract loyal customers and eventually increase

On top of that, companies do not have to increase the price due to higher production cost. Yet, I agree that the manufacturing process should be changed. It is better to be safe than sorry. Companies should provide safer toys and parents would not want their kids to be unhealthy and regret later when it is too late. Again, toy companies have social responsibilities such as the duty of product safety. Companies should educate the consumers if needed, to learn more about the consequences of lead as to raise their awareness of the harmfulness. Raising the retail price could affect companies’ revenue due to the reason that consumers are unwilling to pay higher prices. In order to attain a win-win situation, toy companies could consider to lower the new manufacturing cost by sourcing an alternative material to replace lead, or earn less profit for children’s well-being even though the cost is doubled.

As a parent would you be willing to pay twice as much for a safer product?

I would state a definite yes for parents to pay twice as much. If parents do love their kids, they would not mind paying more for a safer toy. Life is irreversible. The lead in plastic toy could endanger children’s life and it is impossible for parents to keep an eye on their children all time.