This research is made on McDonald’s Business Ethics Project Report to make readers try to become fully aware about the faulty practices made by this company to attract customers.
Reasons to choose company:
- It’s a well known multinational company
- Easily reach-able because we have reference and we can get information easily
- Toys with Happy meal
- The company was blamed for misleading the children about their food with the use of attractive advertisements to encourage the youngsters to choose their food and hence causes health problems to them.
- Animal welfare issues(Chicken Abuse Case, tiny cages for animals)
- Horse meat scandal
Type of investigation and data collection:
We’ll collect data through internet, website of McDonald’s, magazines and newspapers, research articles etc. we’ll also investigate through interview which will base on the prepared questionnaire. We’ll also question randomly according to the situation.
Key Stakeholders of McDonald’s:
- Franchise holders (franchisees)
Approach which we’ll use for the assessment of stake holders:
We’ll use normative approach for assessment because its gives us descriptive and analytical both analysis as well as it provides help for the future problems. Through this approach we can make batter decisions in the future.
McDonald’s faced data security ethical issue
In 2010, McDonald’s announced that some of its customer’s information such as email address, date of birth, wireless number and so on had been exposed because of a unauthorized third party’s data contravention.
This bad business ethics example by McDonald’s is what is known as the “McDonald’s Legislation” in popular parlance. In 1972, Ray Kroc, the company’s founder made a rare donation of $250,000 to Nixon’s reelection campaign and in return got a favorable legislation that allowed companies such as McDonald’s to pay teenage employees 20 percent less than federal minimum wages. Most observers consider this a typical case of corporate influence on lawmakers to enact legislation that serve their selfish ends and harm society.
- Regulatory bodies (e.g. national and local regulatory bodies including health and safety groups)
To make people realize that the world’s natural resources are fast diminishing and something must be done about it, McDonald’s has created a public awareness program called ‘McSaviors’. ‘McSaviors’ involves children as they are going to be in charge of the future. ‘McSaviors’ children are empowered to penalize adults found wasting water and electricity. The minimum penalty amount is Rs. 10. McDonald’s will use the penalty money to promote measures that will prevent further wastage, such as replacing regular bulbs with energy savers, repairing leaking water supply lines, etc. The program has been launched in association with Express News.
The Marine environment is not taken seriously in our society. McDonald’s has taken steps to create awareness about this environment, especially among kids, with regular visits to the beach where they clean it with their own hands.
McDonald’s has been supporting the Olympic Games through feeding program aimed at feeding the athletics. McDonald’s is also involved in various charities and also supports education in the developing countries where it has its franchises and fast food restaurants. As part of its bid to return back to the society, McDonald’s has sponsored several children programs involving eradication of illiteracy and poverty.
“McDonald’s mission is to be our customers’ favorite place and way to eat with inspired people who delight each customer with unmatched quality, service, cleanliness and value every time. We invite you to be the part of this winning team and give yourself an opportunity to grow with the family of people striving to create smiles on the faces of millions of people every day.”
McDonald’s is the largest and the best-known global food service retailer with more than 30,000 restaurants in 121 countries serving 47 million customers each day. Yet on any day, even as the market leader, McDonald’s serves less than one percent of the world’s population. The return on the company’s stock has been superior to the market, with a compound annual total return of 21 percent over the past ten years. The company’s brand is one of the most recognized in the world. The image of Ronald McDonald and the “golden arches” are ingrained in the minds of consumers around the world. Some questions, however, remain about McDonald’s commitment to the people and the neighborhoods in which it operates.
“McDonald’s brand mission is to be our customers’ favorite place and way to eat.”
Background of the study:
The background of this study focuses on the law that allows for some serious breaches of ethics in the food industry. Battling the world’s growing health wave. This would entail loyalty to a code of ethics. Many fast-food establishments have paid little or no attention to fat content & harmful additives. Addicted a generation of consumers at the expense of their health — and sometimes, even their lives. Ethical dilemmas Demand of patrons have to be met, and at the same time, think of ways to make more sales, cut costs, and basically maximize the profits of the firms. Fast food industry is guilty of placing profits above people. A point that vividly stands out is the fast-food industry’s prominent role in health issues. Fast-food restaurants have to decide whether to serve healthier food or continue serving deep fried food? The industries are being politically correct donating money and having promotions to advertise healthy life choices. But “Healthy” menu options offered are not always healthy. The real problem is business as usual still creates menu choices that customers eat at their own risk.
McDonald’s is a major fast food company. It is known for its cheap prices and its uniform golden arches. It serves 68 million customers daily in 119 countries. While the corporation services so many people daily, it has a lot of complaints against it. A major reason people do not like McDonald’s is because of the service. It is known for hiring the bottom of the barrel workers and has such cheap food that those combined can produce badly service along with that lack of integrity and the misleading claims they create amongst their customers.
There are a number of ethical issues that we would focus in our report, such as:
- The company was blamed for misleading the children about their food with the use of attractive advertisements and toys in meals to encourage the youngsters to choose their food and hence causes health problems to them.
- Animal welfare issues (Chicken Abuse Case, tiny cages for animals)
- Horse meat scandal
- Destruction of rain forests
- To analyze how well aware is the customer about McDonald’s
- To interpret how the customer knew about McDonald’s and to draw conclusions about awareness in the society in general
- To determine how the customer reacts after being aware of the information provided
We’ll use normative approach for assessment because its gives us descriptive and analytical both analysis as well as it provides help for the future problems. Through this approach we can make better decisions in our report. We’ll collect data through internet, McDonald’s website, magazines and newspapers, research articles etc. we’ll also investigate through interview which will be based on the prepared questionnaire.
After this proposal we intend to hand in a full fledged project on McDonald’s Corporation & its Ethical dilemmas along with a group presentation and a few articles.
Methodology – Data Collection
The focus of study is on attitudes and perception and the importance of primary data cannot be over-emphasized. However, secondary data will also be collected to augment the studies. The initial visit to the headquarters and the question-answer session scheduled would help us a lot in our research report.
Significance of Study
The significance of the study will be basically the assessment of the stakeholders. A company’s relationship with its stakeholders defines its ethical values. McDonald’s, despite its global success, remains the target of a spiteful public criticism owing to what many perceive as bad business ethics in its relationships with employees and other stakeholders.
Key Stakeholders of McDonalds and some of the issues faced by them include:
“McDonald’s faced data security ethical issue”
In 2010, McDonald’s announced that some of its customer’s information such as email address, date of birth, wireless number and so on had been exposed because of an unauthorized third party’s data contravention.
One of the main ethical criticisms consistently faced by McDonald’s over the last 30 years relates to the food offered in its stores. McDonald’s claims to give back to the community and the environment by working with schools and local organizations, but what they repay isn’t nearly enough to cover the damages that they’ve caused.
Stakeholders in a corporation may not only be human because animals are also seen as an important part of society and deserve the same treatment as humans. McDonald’s has been criticized for the way it treats animals before they are killed and turned into fast food. It is claimed that ‘chickens were crammed into sheds with less than one square foot of space per bird and no daylight. As a result, ‘44% had leg abnormalities and other health problems’ (Inside the McLibel trial, 1995). This treatment was not just reserved for chicken but also other animals involved in McDonald’s fast food products. Ethical criticism is also aimed at the methods for killing the animals. ‘14% of chickens received pre-stun shocks, which caused undue stress, while 1% (1,350 per day) were decapitated before being stunned.
Franchise holders (franchisees)
Around 80 per cent of McDonald’s outlets are run by franchisees who have to meet standards set by the company, but who can – and do – go above and beyond them. Further, McDonald’s branches are run by country and regional offices, each of which is subject to domestic standards.
McDonald’s also experiences internal ethical issues related to the working conditions and treatment of employees. This bad business ethics example by McDonald’s is what is known as the “McDonald’s Legislation” in popular parlance. In 1972, Ray Kroc, the company’s founder made a rare donation of $250,000 to Nixon’s reelection campaign and in return got a favorable legislation that allowed companies such as McDonald’s to pay teenage employees 20 percent less than federal minimum wages. Most observers consider this a typical case of corporate influence on lawmakers to enact legislation that serve their selfish ends and harm society.
“Coca cola” being one of its sole global supplier (for soft drinks); The bread for McDonald’s buns and muffins is sourced from a single unnamed supplier based in Heywood, Manchester, and Ban-bury, Oxford-shire. McDonald’s would not comment on where it sources the grain for the bakeries but says once more that it does not buy genetically modified crops.
Between 1986 and 1990, activists of London Greenpeace distributed pamphlets with the title “What’s Wrong with McDonald’s? Everything They Don’t Want You to Know” and the wordings “McDollars, McGreedy, McCancer, McMurder, McProfits, McGarbage,” alleging that McDonald’s promoted Third World poverty, sold unhealthy food, exploited workers and children, tortured animals, and destroyed the Amazon rain forest. McDonald’s sued the group for libel. The court, however, held McDonald’s guilty of exploiting children through advertising tactics, serving dangerously unhealthy food, paying workers low wages, indulging in union busting activities worldwide, and ignoring animal cruelty perpetrated by its suppliers.
Absence of full disclosure of complete nutritional information to customers Integrity is one of the most crucial and often-cited terms in business ethics, as it refers to being “whole, sound and in an unimpaired condition” in terms of virtue. At a minimum, businesses are expected to adhere to all applicable laws and regulations. Organizations should not knowingly harm customers, clients, employees or even competitors via deception, misrepresentation or coercion. Hence, McDonald’s obviously flawed façade of “being-healthy” is a total diminution in integrity. Enticing children popular toys used as bait. The toy offer has been around since the 1980’s. McDonald’s playing a huge role as a catalyst in the obesity epidemic among the youth worldwide.
Limitations or constraints
Of the many limitations we faced there is a lack of reference material or limited access to required resources. Another constraint that we are facing is the amount time we have available to do research. And also that we cannot cover all the regions McDonald’s is located in or has its operations in.
List of references / sources
Tasks assigned to group members
Group Member 1: Customers, Animals & Franchise holders
Group Member 2: Employees
Group Member 3: Suppliers
Group Member 4: Investors
Group Member 5: Society & IT
“The basis for our entire business is that we are ethical, truthful and dependable.”
— Ray Kroc, 1958