Manfold Toy Company Case Study

As Potter Stewart, a former Supreme Court Justice, once said, “Ethics is knowing the difference between what you have a right to do and what is right to do.” Although Joesph Wan, a founder of a successful toy company, was concerned with legal consequences of his actions, he did not care about how the consequences of his actions could harm stakeholders. To give some background, Wan’s business, Manfold Toy Company, has established itself as a leader with its aquatic toy product lines. In the 1980s, China, Wan’s native country, introduced economic reforms to spur growth. Housing its manufacturing operations in China, Manfold was given the competitive advantage of low costs. In addition, Manfold’s management was successful at seizing business opportunities related to fads. For instance, the company entered into licensing agreements to make airbeds related to popular movie. These licensing relationships would allow Manfold to remain on top by attracting youthful audiences addicted to the latest …show more content…
Maintaining a wide variety of products allowed Manfold Toy Company to steadily increase its profits. However, the year is now 2007, and stress of leading a public company is wearing on Wan. In Wan’s mind, the most logical course of action is to sell Manfold Toy Company to Mitchell and Meyer, an exercise equipment manufacturer. Since Mitchell and Meyer failed at marketing an exercise product line to children, its CEO is anxious to obtain access to Manfold’s distribution channels. However, unbeknownst to Wan and Mitchell and Meyer’s CEO, there is a rumor going around that Manfold’s sole supplier in Australia and New Zealand, On Yee Exports, is going out of business. To make matters worse, Mitchell and Meyer’s CEO told Wan that he would only purchase Manfold Toy Company if it increased its revenue goal by