Task 1- the introduction to McDonalds
1. What are business ethics?
'Ethics' define moral guidelines that govern good behavior. To behave ethically would be to behave morally correct. Within a business, this would involve making decisions based on the morality of the result.
Business ethics is a form of applied ethics or professional ethics that examime ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
I have chosen McDonald’s as my business due to the fact that it is an extremely popular international franchise, therefore it is easy to study, in addition to the fact that there have been a vast number of issues with the company throughout their existence as a business.
2. What are the ethical issues McDonald's face on a day to day basis?
Corporate Governance
Corporate social Responsibility
Environment
Sustainability
Human Rights
Corruption
Fair Trade
Legal and Regulatory Compliance
Business Practices
Working Conditions
'Ethics' define moral guidelines that govern good behavior. To behave ethically would be to behave morally correct. Within a business, this would involve making decisions based on the morality of the result.
Business ethics is a form of applied ethics or professional ethics that examime ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
I have chosen McDonald’s as my business due to the fact that it is an extremely popular international franchise, therefore it is easy to study, in addition to the fact that there have been a vast number of issues with the company throughout their existence as a business.
2. What are the ethical issues McDonald's face on a day to day basis?
Corporate Governance
Corporate social Responsibility
Environment
Sustainability
Human Rights
Corruption
Fair Trade
Legal and Regulatory Compliance
Business Practices
Working Conditions
Who are the McDonalds stakeholders?
Stakeholders are people involved or concerned with a situation. In the McDonald's food industry, these would involve the following Stakeholders:
Employees and Staff
Customers
Suppliers
The Government
Communities
The Customers are the external stakeholders, due to the fact that they aren’t employed amongst the franchise, but they still buy their products, and may involve themselves in company events. Even if McDonald’s isn’t a daily usage in their life, they are still a stakeholder. The Customers interests revolve around what McDonald’s has to offer them in terms of product (eg: food that caters to their needs). The Customers are what keep McDonald’s functioning, as they provide them with money to help the business operate and expand.
The Suppliers are also internal stakeholders, as they will work alongside McDonald’s and supply various ingredients and essential products for the McDonald’s stores. If McDonald’s didn’t have a supplier, they wouldn’t have any products for their customers. Suppliers’ interests with the company revolve around the quantity of the orders and purchases the McDonald’s franchise requests from them. The larger and more frequent the request, the more money they earn.
Trade unions are external stakeholders as they work outside the business. Trade unions are people who are in charge of assuring that the working conditions, salary and working process’ are all suitable for the employee’s of the business. Trade Unions have an interest in McDonalds as some of their staff from each franchise will pay to be a part of their union; therefore, they earn lots of money.
The Government is involved with McDonald’s, as they are external stakeholders that hold an interest and influence on McDonald’s. This is because McDonald’s offer lots of opportunities for the unemployed to get a job, due to the vast number of global franchises. The Government also pass new laws that could affect the way McDonald’s functions. If McDonald’s were not in tact with the law, the business could suffer extreme consequences. The Government will be involved in any major decisions McDonald’s needs permission for, such as building another franchise.
Communities are external stakeholders, and are widely involved with the company, as they are interested when stores are planning to build near them, and what jobs they can offer within the company.
Employees and Staff
Customers
Suppliers
The Government
Communities
The Customers are the external stakeholders, due to the fact that they aren’t employed amongst the franchise, but they still buy their products, and may involve themselves in company events. Even if McDonald’s isn’t a daily usage in their life, they are still a stakeholder. The Customers interests revolve around what McDonald’s has to offer them in terms of product (eg: food that caters to their needs). The Customers are what keep McDonald’s functioning, as they provide them with money to help the business operate and expand.
The Suppliers are also internal stakeholders, as they will work alongside McDonald’s and supply various ingredients and essential products for the McDonald’s stores. If McDonald’s didn’t have a supplier, they wouldn’t have any products for their customers. Suppliers’ interests with the company revolve around the quantity of the orders and purchases the McDonald’s franchise requests from them. The larger and more frequent the request, the more money they earn.
Trade unions are external stakeholders as they work outside the business. Trade unions are people who are in charge of assuring that the working conditions, salary and working process’ are all suitable for the employee’s of the business. Trade Unions have an interest in McDonalds as some of their staff from each franchise will pay to be a part of their union; therefore, they earn lots of money.
The Government is involved with McDonald’s, as they are external stakeholders that hold an interest and influence on McDonald’s. This is because McDonald’s offer lots of opportunities for the unemployed to get a job, due to the vast number of global franchises. The Government also pass new laws that could affect the way McDonald’s functions. If McDonald’s were not in tact with the law, the business could suffer extreme consequences. The Government will be involved in any major decisions McDonald’s needs permission for, such as building another franchise.
Communities are external stakeholders, and are widely involved with the company, as they are interested when stores are planning to build near them, and what jobs they can offer within the company.
Ethical Solutions
How could the business deal with the issues?
McDonald's has had a wide range of issues in the past. Two situations which have occurred in the past are the following:
-Child exploitation
-Unethical ingredients.
Ronald McDonald was the fast-food mascot of the McDonald’s industry, used to represent McDonald’s as a company, and appeal to the young demographic. This character was plastered on every advertisement, campaign and promotion for McDonald’s. The issue of having a McDonald’s mascot, was how his character had too much of an influence on children’s eating habits, and promoted bad nutrition; therefore exploiting children by attracting them to extremely bad nutrition. Promoting directly to children means that they are encouraging the children to consume unhealthy products; therefore decreasing their health and nutrition rate, and leading them to other physical and mental issues, such high cholesterol, body mass increase, mood swings and many more.
In a 2004 American documentary film titled ‘Supersize me’ (directed by and starring Morgan Spurlock, an independent filmmaker), the documentary revolved around the McDonald’s industry, whereupon Spurlock followed a 30 day period during which he ate only McDonald’s food. The film documented the drastic effect on Spurlock’s physical and psychological health, as well as the fast-food industry’s corporate influence, and how it encouraged poor nutrition for its own profit.
Spurlock consumed McDonald’s meals three times per day, eating every item on the chain's menu at least once. He claimed to have had an average of 20.92 megajules or 5,000 calories (the equivalent of 9.26 Big Mac Burgers) per day during the experiment. As a result, he gained 24½ lbs. (11.1 kg), a 13% body mass increase, a cholesterol level of 230, and experienced severe mood swings, sexual dysfunction, and excessive fat in his liver. It took Spurlock 14 months to lose the weight gained from his experiment by using a vegan diet, supervised by an expert vegan chef.
The documentary sparked high criticism amongst the McDonald’s industry, as it showed they were producing and selling products of unsuitable ingredients, that are excessively unhealthy for all demographics; particularly children, who, typically, were their target demographic. This lead to many other issues, such as decrease of overall health amongst children who ate in McDonald's, as well as Child Obesity.
The business could deal with these issues by banning the Mascot, and simply using their Logo to advertise their company, in order to avoid child exploitation. In order to widen their demographic and avoid this issue, they would need to start advertising and promoting their business to all demographics; which may mean hiring adult actors in their television advertisements, in order to demonstrate that McDonald's is for adults, in addition to children.
They would also need to change their ingredients to more healthy and substantial substances, so the company lose their reputation as being significantly unhealthy and un-nutritious, and avoid losing a majority of their customers and demographic, who believe that McDonald's are an unethical and unhealthy industry.
What would the positive impacts be on their stakeholders?
These actions would particularly have a positive impact on their customer/consumer stakeholders, as they would be consuming much more healthy and improved meals from McDonald's than before. For employees, this is also beneficial, due to the fact that as the business grows larger and more popular due to these positive changes, the employees will be earning more money, as they will be selling more products.
What would the positive impacts be on the business itself?
By changing the ingredients and the mascot of the company, they would be widening their demographic. The larger the demographic, the more money the company will make, and the more products they will sell. The demographic will not only be people seeking a typical fast-food experience, but it will include an audience who believe McDonald's no longer uses the artificial, processed and unhealthy ingredients within their products, and no longer adapts to the unsanitary habits that they used to have.
As well as this, they will also gain a positive reputation for selling healthy and nutritious products. It will no longer be a business with questionable products of consumption. Consumers will feel safe eating at a place that they know sells healthy food that they enjoy, and they may frequent their McDonald-based meals because of the positive changes made to the company.
McDonald's has had a wide range of issues in the past. Two situations which have occurred in the past are the following:
-Child exploitation
-Unethical ingredients.
Ronald McDonald was the fast-food mascot of the McDonald’s industry, used to represent McDonald’s as a company, and appeal to the young demographic. This character was plastered on every advertisement, campaign and promotion for McDonald’s. The issue of having a McDonald’s mascot, was how his character had too much of an influence on children’s eating habits, and promoted bad nutrition; therefore exploiting children by attracting them to extremely bad nutrition. Promoting directly to children means that they are encouraging the children to consume unhealthy products; therefore decreasing their health and nutrition rate, and leading them to other physical and mental issues, such high cholesterol, body mass increase, mood swings and many more.
In a 2004 American documentary film titled ‘Supersize me’ (directed by and starring Morgan Spurlock, an independent filmmaker), the documentary revolved around the McDonald’s industry, whereupon Spurlock followed a 30 day period during which he ate only McDonald’s food. The film documented the drastic effect on Spurlock’s physical and psychological health, as well as the fast-food industry’s corporate influence, and how it encouraged poor nutrition for its own profit.
Spurlock consumed McDonald’s meals three times per day, eating every item on the chain's menu at least once. He claimed to have had an average of 20.92 megajules or 5,000 calories (the equivalent of 9.26 Big Mac Burgers) per day during the experiment. As a result, he gained 24½ lbs. (11.1 kg), a 13% body mass increase, a cholesterol level of 230, and experienced severe mood swings, sexual dysfunction, and excessive fat in his liver. It took Spurlock 14 months to lose the weight gained from his experiment by using a vegan diet, supervised by an expert vegan chef.
The documentary sparked high criticism amongst the McDonald’s industry, as it showed they were producing and selling products of unsuitable ingredients, that are excessively unhealthy for all demographics; particularly children, who, typically, were their target demographic. This lead to many other issues, such as decrease of overall health amongst children who ate in McDonald's, as well as Child Obesity.
The business could deal with these issues by banning the Mascot, and simply using their Logo to advertise their company, in order to avoid child exploitation. In order to widen their demographic and avoid this issue, they would need to start advertising and promoting their business to all demographics; which may mean hiring adult actors in their television advertisements, in order to demonstrate that McDonald's is for adults, in addition to children.
They would also need to change their ingredients to more healthy and substantial substances, so the company lose their reputation as being significantly unhealthy and un-nutritious, and avoid losing a majority of their customers and demographic, who believe that McDonald's are an unethical and unhealthy industry.
What would the positive impacts be on their stakeholders?
These actions would particularly have a positive impact on their customer/consumer stakeholders, as they would be consuming much more healthy and improved meals from McDonald's than before. For employees, this is also beneficial, due to the fact that as the business grows larger and more popular due to these positive changes, the employees will be earning more money, as they will be selling more products.
What would the positive impacts be on the business itself?
By changing the ingredients and the mascot of the company, they would be widening their demographic. The larger the demographic, the more money the company will make, and the more products they will sell. The demographic will not only be people seeking a typical fast-food experience, but it will include an audience who believe McDonald's no longer uses the artificial, processed and unhealthy ingredients within their products, and no longer adapts to the unsanitary habits that they used to have.
As well as this, they will also gain a positive reputation for selling healthy and nutritious products. It will no longer be a business with questionable products of consumption. Consumers will feel safe eating at a place that they know sells healthy food that they enjoy, and they may frequent their McDonald-based meals because of the positive changes made to the company.
Impact on the stakeholders
The Customers will both be positively and negatively affected. Physically and emotionally, they will be positively affected by these changes provided by the McDonald’s corporate. They will be consuming healthier, more sanitary McDonald products; therefore both increasing their heart rate, and lowering their blood pressure, and in general, improving their health by a significant amount. And emotionally, the amount of mood swings and other personality disorders will decrease, as their body will be generating healthy, natural ingredients. However, in spite of the fact that the price of McDonald’s products may rise; these decisions will significantly increase the overall health of their customers. Therefore, their products would be worth paying for, and it would be a wise company decision to change their product ingredients, in order for this to happen.
In a negative aspect, McDonald’s will be purchasing their ingredients from a different supplying company; which will most likely be a more expensive than the previous, as a supplying company that specializes in offering more natural and healthy products, will mean that it will be more expensive in comparison to a less healthy, and less natural supplying company. The higher the market the meat,the higher the price, in comparison to cheap meat, which has a less of a demand in the food market.
This will lead to the next negatively affected Stakeholder; the Suppliers. The original Suppliers of McDonald’s will lose a large amount of company investment, due to the fact that McDonald’s will be forced to drop their supplies, in order to gain a more healthy recognition, and provide better food for their consumers. This means that these Suppliers will lose a vast amount of their income, and will have to seek another company that are in need of their supplies. It is possible the supplying company will go bankrupt, as McDonald’s is an incredibly large international corporation, and a majority of the company income will come directly from McDonald’s. Although this would be a massive disadvantage for McDonald’s original supplying company, it would be a necessary change, otherwise McDonald’s will carry their negative and unhealthy reputation, and their customer demographic will decrease.
Trade Unions will be another Stakeholder who will be negatively affected, as the staff will most likely stop paying the Trade Union’s to provide them assistance, due to the fact that McDonald’s will be having an income of healthier ingredients, and will raise the employees’ salaries with their large income from their customers. Therefore, the Trade Union’s will be losing their customers and losing a lot of their income.
The Government’s position as a Stakeholder will be unlikely to be impacted significantly. They will remain an influence on McDonald’s, and most likely earn an even larger income from their franchises due to their customer increase with their new corporate changes. This will also give them an opportunity to help employ people without jobs, who are satisfied with McDonald’s (possibly) new employee wages. This also links into Community Stakeholders, who are seeking jobs and would like to work in McDonald’s, or will be satisfied with their franchise in their community; particularly with these new changes.
In a negative aspect, McDonald’s will be purchasing their ingredients from a different supplying company; which will most likely be a more expensive than the previous, as a supplying company that specializes in offering more natural and healthy products, will mean that it will be more expensive in comparison to a less healthy, and less natural supplying company. The higher the market the meat,the higher the price, in comparison to cheap meat, which has a less of a demand in the food market.
This will lead to the next negatively affected Stakeholder; the Suppliers. The original Suppliers of McDonald’s will lose a large amount of company investment, due to the fact that McDonald’s will be forced to drop their supplies, in order to gain a more healthy recognition, and provide better food for their consumers. This means that these Suppliers will lose a vast amount of their income, and will have to seek another company that are in need of their supplies. It is possible the supplying company will go bankrupt, as McDonald’s is an incredibly large international corporation, and a majority of the company income will come directly from McDonald’s. Although this would be a massive disadvantage for McDonald’s original supplying company, it would be a necessary change, otherwise McDonald’s will carry their negative and unhealthy reputation, and their customer demographic will decrease.
Trade Unions will be another Stakeholder who will be negatively affected, as the staff will most likely stop paying the Trade Union’s to provide them assistance, due to the fact that McDonald’s will be having an income of healthier ingredients, and will raise the employees’ salaries with their large income from their customers. Therefore, the Trade Union’s will be losing their customers and losing a lot of their income.
The Government’s position as a Stakeholder will be unlikely to be impacted significantly. They will remain an influence on McDonald’s, and most likely earn an even larger income from their franchises due to their customer increase with their new corporate changes. This will also give them an opportunity to help employ people without jobs, who are satisfied with McDonald’s (possibly) new employee wages. This also links into Community Stakeholders, who are seeking jobs and would like to work in McDonald’s, or will be satisfied with their franchise in their community; particularly with these new changes.
Survey
A survey I distributed asking the following questions, allowed me to gain an understanding of whether or not the stakeholders would approve of McDonald's changes, or whether they would prefer their original designs. The questions and answers are the following:
Questions: What is the main reason you like eating McDonald products?
-Low prices (36%)
-Delicious food (90%)
-Great setting (9%
What would you like to see the McDonald's corporation improve on?
-Their choice of ingredients (100%)
-Expanding their demographic (18%)
-Prices (18%)
-Their ecological footprint (27 percent)
-Nothing (0%)
If McDonald's were to change their ingredients to more healthy, nutritious alternatives- would you be willing to pay a higher price for their food products? (Eg: An increase of $10 HKD)
-Yes (90%)
-No (10%)
Do you believe McDonald's exploits children by advertising them unhealthy food? Eg: With happy meals?
-Yes (95%)
-No (5%)
-Additional comments (0%)
Would you want your children/a child to eat at McDonald's?
-Yes (15%)
-No (85%)
If McDonald's didn't aim their target demographic at children, do you think their sales would increase?
-Yes (80%)
No (20%)
Judging from these results- if McDonald's were to make make these changes, the responses of their audience would be extremely positive.The results demonstrate that customers are not all entirely satisfied with the quality McDonald's has to offer, in terms of their demographic targets and their product ingredients. From these survey results, it concludes that customers would most likely respond in a positive way if McDonald's were to make their changes in terms of child exploitation and unhealthy ingredients. Therefore, i think McDonald's should adjust their company in order to establish more positive changes in order to benefit the company.
As 85% of my respondents claimed they wouldn't want their children to eat at McDonald's, and 95% of my respondents believe McDonald's exploits children by targeting their demographic; it is blatant that there is a wide range of customers who are not satisfied with McDonald's unethical behavior and current attitude towards their customers.
If changes were to be established, both in terms of their product sanitation and their customer demographic; the respondents who claimed they 'wouldn't' want their children eating at McDonald's, would be more satisfied with the more healthy changes to the McDonald's menu, and allow their children to eat there; furthermore increasing customer service.
100% of the respondents all answered that they are not satisfied with the quality and ingredients of the food products for McDonald's. This large percentage suggests that, if McDonald's were to establish a new, healthier and more substantial set of ingredients for their menu; that each and every one of these respondents would be more satisfied, and most likely increase their service at McDonald's.
Questions: What is the main reason you like eating McDonald products?
-Low prices (36%)
-Delicious food (90%)
-Great setting (9%
What would you like to see the McDonald's corporation improve on?
-Their choice of ingredients (100%)
-Expanding their demographic (18%)
-Prices (18%)
-Their ecological footprint (27 percent)
-Nothing (0%)
If McDonald's were to change their ingredients to more healthy, nutritious alternatives- would you be willing to pay a higher price for their food products? (Eg: An increase of $10 HKD)
-Yes (90%)
-No (10%)
Do you believe McDonald's exploits children by advertising them unhealthy food? Eg: With happy meals?
-Yes (95%)
-No (5%)
-Additional comments (0%)
Would you want your children/a child to eat at McDonald's?
-Yes (15%)
-No (85%)
If McDonald's didn't aim their target demographic at children, do you think their sales would increase?
-Yes (80%)
No (20%)
Judging from these results- if McDonald's were to make make these changes, the responses of their audience would be extremely positive.The results demonstrate that customers are not all entirely satisfied with the quality McDonald's has to offer, in terms of their demographic targets and their product ingredients. From these survey results, it concludes that customers would most likely respond in a positive way if McDonald's were to make their changes in terms of child exploitation and unhealthy ingredients. Therefore, i think McDonald's should adjust their company in order to establish more positive changes in order to benefit the company.
As 85% of my respondents claimed they wouldn't want their children to eat at McDonald's, and 95% of my respondents believe McDonald's exploits children by targeting their demographic; it is blatant that there is a wide range of customers who are not satisfied with McDonald's unethical behavior and current attitude towards their customers.
If changes were to be established, both in terms of their product sanitation and their customer demographic; the respondents who claimed they 'wouldn't' want their children eating at McDonald's, would be more satisfied with the more healthy changes to the McDonald's menu, and allow their children to eat there; furthermore increasing customer service.
100% of the respondents all answered that they are not satisfied with the quality and ingredients of the food products for McDonald's. This large percentage suggests that, if McDonald's were to establish a new, healthier and more substantial set of ingredients for their menu; that each and every one of these respondents would be more satisfied, and most likely increase their service at McDonald's.