Mattel’s recall of more than 10 million toys in the U.S. over the past three weeks has done more than focus attention on the company’s wide array of products which include such household names as Elmo Ernie Big Bird Barbie and Batman. It has also further raised public awareness of quality control problems in China and the relentless push to cut costs along every step of the supply chain. Knowledge at Wharton looks at Mattel’s response to the crisis its potential liability and the consequences for China.