CSR Report: Ethical Issues in Importing Toys from China

This report examines the corporate social responsibility (CSR) and ethical issues surrounding the import of toys from China, specifically focusing on cases involving lead contamination. It discusses the roles and responsibilities of corporations, the impact on stakeholders, and the application of ethical reasoning methods such as utilitarianism, rights, and justice. The report highlights the potential health risks to children, the legal and regulatory frameworks involved, and the broader environmental impacts of toy manufacturing. It also addresses the ethical challenges in supply chain management and the importance of product safety testing. The analysis underscores the need for companies to prioritize ethical considerations and uphold CSR principles to protect consumers and the environment. Desklib offers a wealth of similar reports and solved assignments for students seeking deeper insights into business ethics and CSR.

Running head: BUSINESS AND SOCIETY
Business and society
Name of student
Name of University
Author note
Table of Contents

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BUSINESS AND SOCIETY
Section 1: Introduction................................................................................................................................3
Section 2: Rationale.....................................................................................................................................4
Section 3: Impacts.......................................................................................................................................6
Section 4: Impacts.......................................................................................................................................7
Section 5: Impacts.....................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................13

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BUSINESS AND SOCIETY
Corporations importing toys from manufacturers in China, given the discovery of lead in
some toy products produced in that country
Section 1: Introduction
The report is prepared to discuss about the corporate social responsibilities and ethical
issues that may arise due to the importing of toys manufactured in China with the use of lead. It
is found that the China toy manufacturing companies have been using lead and other harmful
substances during the production of toys, which can be harmful for the children and create
certain health related issues. The impact on stakeholders and their roles will be demonstrated
here along with the ethical issues that may emerge1. Due to the discovery of lead in some of the
toys manufactured in China, there have been ethical issues considering its negative impact on the
heath of young individuals as well as violating the rules, laws and regulations regarding the
corporate social responsibility. Corporate social responsibility means the various initiatives
undertaken by the company to assess the roles and responsibilities and carry out those properly
to create positive impact on the environment and promote social wellbeing2. The efforts done by
the company can help to protect the environment and manage the corporate social
responsibilities properly too for sustaining within the competitive business environment. Mattel
is one of the most popular toy manufacturers in Canada, which has managed to import toys from
the manufacturers in China and there are evidences that discovered the presence of lead in some
1 Shen, Zhengtao, et al. "Lead-based paint in children's toys sold on China's major online
shopping platforms." Environmental Pollution 241 (2018): 311-318.
2 Decharat, Somsiri. "Assessment of lead levels in some children’s plastic toys." Asia-Pacific
Journal of Science and Technology 18.6 (2017): 1026-1033.

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BUSINESS AND SOCIETY
of the toy products produced in China. This is a major CSR and ethical issue that hinders the
rules and regulations regarding the health and wellbeing of the children and people within the
community3.
Section 2: Rationale
The ethics of the issues involved the use of various methods of ethical reasoning
including the utility, rights and justice. The various methods will not only help in determining
the ethics related to the current issues faced by the toy manufacturing companies in Canada, but
may also lead to deterioration of sales revenue in business. The costs and benefits are to be
considered for analyzing the ethics of the issues and ensure that the three methods and
techniques are managed properly to evaluate the ethics of relevant issues4. The methods of
ethical reasoning are utilitarian, rights and justice, which have been useful for analyzing the cost,
benefits, receiving the share and distributing the profit and loss equally. The costs are mainly
incurred while importing the toys from manufacturers in China, which resulted in finding out the
presence of lead in some of the toy products. Getting the right toy products that cannot create any
harm to people and the environment is considered as a major right of the individuals in Canada
while the justice represents following the legal requirements and becoming ethical in the
business operations5. This is mainly done for ensuring that the children are provided with quality
3 Decharat, Somsiri. "Assessment of lead levels in some children’s plastic toys." Asia-Pacific
Journal of Science and Technology 18.6 (2017): 1026-1033.
4 Lawrence, Anne T., and James Weber. Business and society: Stakeholders, ethics, public
policy. Tata McGraw-Hill Education, 2014.
5 Luo, Yadong, and Hongxin Zhao. "Doing business in a transitional society: Economic
environment and relational political strategy for multinationals." Business & Society 52.3 (2013):
515-549.

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BUSINESS AND SOCIETY
toys that cannot harm them dye to the presence of some kinds of harmful chemicals or
substances that may affect the environment as well.
It was found that few of the major toy manufacturing and production companies in China
were the sources of causing alarm among the consumers, parents and the regulators. Various
researches were conducted, which showed that the toys were supplied all over the world, among
which, Canada is also involved. The toys imported from the manufacturers in China were found
to be coated with lead paint that could be harmful and even damage the brain cells of children
who play with those frequently6. A ghoulish eyeball was also found made of lead in the toys,
which contained kerosene while the lead paint coating over few of the toys might be the cause of
choking hazards and wrist injury among the infants. Therefore, to maintain the rights and
utilities, the federal Consumer Product Safety Commission in Canada checked the supplied toys
to make sure that the toys should be safe and might not be the cause of any kinds of harms for
the children. The toy recalls created new demands for the enforcement of safety by United States
regulators and importers and even for the Government and industry in China7. Several laws, rules
and regulations show that the toys are to be manufactured in such a way that it is environment
friendly and do not create any impact on the environment as well as create harmful health effects
for the children. The toy trains and pieces of railroads are made for the RC2 at plants for
providing better control over the safety and quality of toys made there. China is mostly
6 Spence, Laura J. "Small business social responsibility: Expanding core CSR theory." Business
& Society 55.1 (2016): 23-55.
7 Kolk, Ans, Miguel Rivera-Santos, and Carlos Rufin. "Reviewing a decade of research on the
“base/bottom of the pyramid”(BOP) concept." Business & Society 53.3 (2014): 338-377.

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BUSINESS AND SOCIETY
responsible for the manufacturing and production of 60 percent of the product recalls when
compared with the production output in the previous years8.
Section 3: Impacts
The toys manufactured and produced could create harmful effects on the family and even
on the children due to the presence of lead coating on the toys. The impacts could be both direct
and indirect. The direct impacts would be on the health of individuals like skin irritation and
even might result in choking related hazards. The indirect impacts could be the damaging the
brain cells and even causing memory loss, which might even deteriorate the health condition of
individuals who bought the toys from the company9.
Corporate social responsibilities mean creating a positive impact on the environment as
well as fulfilling the roles and responsibilities of people in Canada properly. The importation of
hazardous toys and lead coated materials has created ethical issues and even deteriorated the
brand image and name. During the past years, there have been increased sales of toys for the
Chinese toy manufacturing companies, nearly more than 15 million toys10. There are various
8 Pies, Ingo, Markus Beckmann, and Stefan Hielscher. "The political role of the business firm:
An ordonomic concept of corporate citizenship developed in comparison with the Aristotelian
idea of individual citizenship." Business & Society53.2 (2014): 226-259.
9 Wang, Qian, Junsheng Dou, and Shenghua Jia. "A meta-analytic review of corporate social
responsibility and corporate financial performance: The moderating effect of contextual
factors." Business & Society 55.8 (2016): 1083-1121.
10 Liket, Kellie, and Karen Maas. "Strategic philanthropy: corporate measurement of
philanthropic impacts as a requirement for a “happy marriage” of business and society." Business
& Society 55.6 (2016): 889-921.

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BUSINESS AND SOCIETY
lawsuits and regulatory actions that have been undertaken to make sure that the toys are safe and
of good quality to ensure that the brand image and reputation does not get damaged. The ethical
issues surrounding the importation of these lead covered toys are the excessive use of lead to the
surface points of the toys and even using some small magnets in the toys11. It can be harmful
because the children in families can be subjected to harm due to choking or even swallowing the
small detachable magnets while the presence of lead can affect the brain during their early
childhood days. It can get complicated with time and the children may even face mental
problems during the later years. The swallowing and getting choked by the magnet can be direct
impacts while the presence of lead when comes in contact with the children, will create problems
slowly, i.e., indirectly and start damaging the brain cells12.
Section 4: Impacts
The harmful effects are mainly caused by the presence of lead and detachable magnets
present in the toys. It is a major ethical issue, as the toy manufactures must make sure to deliver
good quality and safe toys. In case, the harmful effects emerge while playing with the toys, the
brand image and reputation of many companies will likely get deteriorated and the sales revenue
could get lowered down as well. From various researches it had been found that the ethical
situations arise while managing the design of product and during the management of processes of
11 Idowu, Samuel O. Encyclopedia of corporate social responsibility. Eds. Nicholas Capaldi,
Liangrong Zu, and Ananda Das Gupta. Vol. 21. New York: Springer, 2013.
12 Skarmeas, Dionysis, and Constantinos N. Leonidou. "When consumers doubt, watch out! The
role of CSR skepticism." Journal of Business Research 66.10 (2013): 1831-1838.

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BUSINESS AND SOCIETY
manufacturing and production related to the contractors and sub-contractors in China13. The
ethical obligations, laws and rules of the companies are different for the different situations and
this has lead to various problems regarding the supply chain management too in the states of
Canada. Thus, the importing activities have also been affected, which can even degrade the sales
and profit level for the toy manufacturing companies in China. Children within the community
would put toys in their mouth and get the lead poisoning and become ill. Most of the children do
not have the same safety standards and their parents may not be present around them, which can
make them ignore the situation. The toy manufacturing companies were affected and criticized
for their wrong doings regarding the purchase of paints from the specific vendors. There may
also be poor choice of toy manufacturers and cannot think about the children putting the toys in
their mouth. The lead present their will affect their brain cells and can even result in severe
health related issues14. It is also important to test and check the presence of lead prior to the
selling. The companies focused on saving more money, which should not have been done,
keeping in mind the ill effects that might be caused due to the toys containing harmful lead. Not
only the people within the community were affected, but also the presence of lead in the toys
created some negative impacts on the environment15. The manufacturing and production
processes used a lot of energy and resources and even produced wastes. There are legal laws,
13 Kahreh, Mohammad Safari, et al. "An examination to effects of gender differences on the
corporate social responsibility (CSR)." Procedia-Social and Behavioral Sciences 109 (2014):
664-668.
14 Kumar, D. Thresh, et al. "Analyzing the CSR issues behind the supplier selection process using
ISM approach." Resources, Conservation and Recycling 92 (2014): 268-278.
15 Tai, Fang-Mei, and Shu-Hao Chuang. "Corporate social responsibility." Ibusiness 6.03 (2014):
117.

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BUSINESS AND SOCIETY
rules and regulations that govern how the toy manufacturing companies in China should limit the
emissions and at the same time, make sure to maintain the safety standards by limiting the usage
of lead on the toys. The ethical concerns affected the corporate approaches undertaken by these
toy manufacturing companies in China and even lead to environmental degradation, furthermore
increased the generation of wastes and created imbalance in the nature and environment16.
The employers of the organization in Canada do have some legal and ethical
responsibilities to make sure that the workers check the products properly that are imported from
China and ensure maintaining the safety standards. To meet both the legal and ethical challenges,
it is important for the corporate bodies to follow the detailed policies implemented by the
Government and ensure that the employees abide by those to maintain the quality and safety
standards, before the toys are to be delivered to the clients. The safety of products is government
by legislation and the ethical issues mean that the products should be tested for the safety and
quality. various aspects should be tested to reduce exposure to law suits and ensure that the
ethical duties, roles and responsibilities are fulfilled properly17. The toy companies in Canada
suffered huge toys as the imported toys from China were not bought by the customers and the
sales revenue started falling gradually. The community gets affected with many children falling
ill due to the lead poisoning while the corporate sectors faced huge amounts of loss with the
selling of toys gradually being reduced from time to time.
16 Perry, Patsy, and Neil Towers. "Conceptual framework development: CSR implementation in
fashion supply chains." International Journal of Physical Distribution & Logistics
Management 43.5/6 (2013): 478-501.
17 Hudon, Marek, and Joakim Sandberg. "The ethical crisis in microfinance: Issues, findings, and
implications." Business Ethics Quarterly 23.4 (2013): 561-589.

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BUSINESS AND SOCIETY
Section 5: Impacts
With the ethical and corporate social responsibility issues, the company sales' decreased
and many of these suffered huge losses. People started gaining negative mindset and the
purchases of toys decreased to a large extent. Corporate social responsibility means contributing
some benefits to the society and at the same time, make sure to protect the environment. Due to
the lea coating in the toys, the health of many children were affected and this made them not
purchase the toys that are imported from China. The impacts were created on both the
community and the corporate sectors. with the quality and safety standards not met, the toy
manufacturing companies faced loss in business and the companies run through loss18. The
importing from the Chinese toy manufacturing companies were stopped, which prevented trade
relations and even resulted in affecting the growth in economy of China as well as Canada,
where the products have been exported. The businesses faced huge loss while the society was
affected where many children fall ill and even were subjected to harm while swallowing the toys
consisting of the lead coating. The toy manufacturing industry contributes well to the economy
of Canada and with the ethical issues that arose related to the presence of lead coating in the
toys, the sales have decreased and even the parents of children have stopped purchasing any toy
products that have been manufactured in China. Not only does the toy companies in China is
affected, but also the growth in economy of the country has been affected19. The market shares
18 Hillyer, Margot M., et al. "Multi-technique quantitative analysis and socioeconomic
considerations of lead, cadmium, and arsenic in children’s toys and toy
jewelry." Chemosphere 108 (2014): 205-213.
19 Kang, Shaoguo, and Jianxin Zhu. "Total lead content and its bioaccessibility in base materials
of low-cost plastic toys bought on the Beijing market." Journal of Material Cycles and Waste
Management 17.1 (2015): 63-71.

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BUSINESS AND SOCIETY
have fallen. which has lead to higher prices of products and decline of sales and profit level for
the companies too. The trade relations between China and Canada has deteriorated and the
import and export activities have stopped too. This is how the ethical and CSR issues have
impacted the society and businesses in Canada.
Conclusion
The report was prepared to discuss about the ethical and corporate issues that had
affected the businesses and importing activities. The business organizations used to import toys
from the manufacturers at China. Many popular companies delivered these toys to the clients and
it was found that the lead coating caused damage to the brain cells and resulted in serious health
related issues for the children in Canada. This was a major ethical and CSR issue, which not only
deteriorated the brand image and reputation of many companies, but also reduces the sales
revenue largely. The society, businesses and the communities in Canada were highly affected
and it even prevented trade relations with China. The Chinese toy manufacturing companies
focused on saving money and with the use of lead coating, the safety standards were not met,
which made the corporations not following the legal obligations properly and even not
maintaining the quality and safety standards. It had always been important to test the products at
first and deliver those properly, so that any negative effects on the health of children could be
prevented and the businesses function properly too by managing the CSR and ethical obligations
effectively.

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References
Carroll, Archie, and Ann Buchholtz. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education, 2014.
Decharat, Somsiri. "Assessment of lead levels in some children’s plastic toys." Asia-Pacific
Journal of Science and Technology 18.6 (2017): 1026-1033.

12
BUSINESS AND SOCIETY
Hillyer, Margot M., et al. "Multi-technique quantitative analysis and socioeconomic
considerations of lead, cadmium, and arsenic in children’s toys and toy
jewelry." Chemosphere 108 (2014): 205-213.
Hudon, Marek, and Joakim Sandberg. "The ethical crisis in microfinance: Issues, findings, and
implications." Business Ethics Quarterly 23.4 (2013): 561-589.
Idowu, Samuel O. Encyclopedia of corporate social responsibility. Eds. Nicholas Capaldi,
Liangrong Zu, and Ananda Das Gupta. Vol. 21. New York: Springer, 2013.
Kahreh, Mohammad Safari, et al. "An examination to effects of gender differences on the
corporate social responsibility (CSR)." Procedia-Social and Behavioral Sciences 109 (2014):
664-668.
Kang, Shaoguo, and Jianxin Zhu. "Total lead content and its bioaccessibility in base materials of
low-cost plastic toys bought on the Beijing market." Journal of Material Cycles and Waste
Management 17.1 (2015): 63-71.
Kolk, Ans, Miguel Rivera-Santos, and Carlos Rufin. "Reviewing a decade of research on the
“base/bottom of the pyramid”(BOP) concept." Business & Society 53.3 (2014): 338-377.
Kumar, D. Thresh, et al. "Analyzing the CSR issues behind the supplier selection process using
ISM approach." Resources, Conservation and Recycling 92 (2014): 268-278.
Lawrence, Anne T., and James Weber. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education, 2014.

13
BUSINESS AND SOCIETY
Liket, Kellie, and Karen Maas. "Strategic philanthropy: corporate measurement of philanthropic
impacts as a requirement for a “happy marriage” of business and society." Business &
Society 55.6 (2016): 889-921.
Luo, Yadong, and Hongxin Zhao. "Doing business in a transitional society: Economic
environment and relational political strategy for multinationals." Business & Society 52.3 (2013):
515-549.
Perry, Patsy, and Neil Towers. "Conceptual framework development: CSR implementation in
fashion supply chains." International Journal of Physical Distribution & Logistics
Management 43.5/6 (2013): 478-501.
Pies, Ingo, Markus Beckmann, and Stefan Hielscher. "The political role of the business firm: An
ordonomic concept of corporate citizenship developed in comparison with the Aristotelian idea
of individual citizenship." Business & Society53.2 (2014): 226-259.
Shen, Zhengtao, et al. "Lead-based paint in children's toys sold on China's major online shopping
platforms." Environmental Pollution 241 (2018): 311-318.
Skarmeas, Dionysis, and Constantinos N. Leonidou. "When consumers doubt, watch out! The
role of CSR skepticism." Journal of Business Research 66.10 (2013): 1831-1838.
Spence, Laura J. "Small business social responsibility: Expanding core CSR theory." Business &
Society 55.1 (2016): 23-55.
Tai, Fang-Mei, and Shu-Hao Chuang. "Corporate social responsibility." Ibusiness 6.03 (2014):
117.

14
BUSINESS AND SOCIETY
Wang, Qian, Junsheng Dou, and Shenghua Jia. "A meta-analytic review of corporate social
responsibility and corporate financial performance: The moderating effect of contextual
factors." Business & Society 55.8 (2016): 1083-1121.