Ethical Business In The Minds Of Its Customers Commerce Essay

Ethical Business In The Minds Of Its Customers Commerce EssayThis paper aims to answer the promontory Has McDonalds PLC light upond its objective of being seen as an ethical pipeline in the mind of its customers? I chose McDonalds because it is one of the adultgest diet acquittances in the world. Over the years, it has been criticised by costumers for being un swell-preserved and not purlieual conscious.My investigating is based on a comparison of what McDonald claims to change and to work on against the counterclaims posed by the public. In set out to fortify my claim, typical case studies of how McDonald has achieved being an ethical business in the eyes of the consumer were presented and analysed. They be Analysis of the McDonalds Beef Fries Controversy and the McDonalds Happy Meal Ch altogether in allenge.Other research and enquiry was done to further analyse my investigation and they include a primary research and a secondary research .A primary research was carri ed out in order to seek the opinion of the commonwealth in my topical anesthetic residential district near the state MacDonalds has reached as an ethical business. To further investigate on this, a secondary research was conducted using the companys sustainable card for the year 2011 in order to determine if McDonalds is environmentally sustainable. Results gotten from this were analysed and it was observed that 60% of the multitude who answered the questionnaire were not satisfied with McDonald being an ethical company referable to certain reasons. The remaining 40% of people wer in support of MacDonalds being ethical.In conclusion, I realised that McDonald is really not as ethical as most allegations claim. With regards to this, suggestions regarding market strategies, and organisational structure were minded(p) under my recommendations. With these suggestions, McDonald can indeed reach a commendable level as an ethical business almostday in the next.Word count 295Table of contentAbstract..1Introduction3Research Question.3Investigation7 luggage compartment8What is moral philosophy?8Organisational Structure of McDonalds10Case Studies on McDonalds as an wrong business and Counterclaims by the company as being ethical12Result Analysis16Conclusion18Recommendation..19Bibliography20Appendix21IntroductionIn 1937, McDonalds was started as a drive-in restaurant by two br differents, Richard and Maurice McDonald in California. From the beginning, it was do about $200,000 per annum. However, in the 1940s the company began to implement self-service policies called the Speedee dust where consumers serve themselves and this boosted their annual earnings.Initially, McDonalds was designed for mass production where people line up to collect their aliment. During this era, food prices were relatively low and the two brothers considered service and cleanliness as the paramount factors to the success of their business. With this growing in buisness, people starte d showing interest in this business and wanted to take it on as a franchise. A franchise is an agreement where a business (the franchisor) sells the right to other businesses (the franchisees) allowing them to sell products or to use them to sell products or use the companys name (Dave Hall, Rob Jones. 2004. P.50) This brass failed because at this prime the Donald brothers were very trans levy in their business dealings. In addition, this franchises formed were not able to meet up with standards set by the p arnt organisation. This encouraged a lot of imitators that copied their business and the format it occupied.However, in the early 1990s, McDonalds was facing problems referable to changing customer preferences and increasing competition. Customers were becoming increasingly wellness conscious and they wanted to avoid red meat and fried food. They preferred to eat at other fast food outlets that offered discounts. ( nameless 2002)As at 21 may 2012,McDonalds was ranked by the Fortune magazine (Anon, 2012) as first company in the food services making him the worlds largest fast food chain, merchandising primarily hamburgers, chicken, French fries and carbonated drinks and more recently salads, fruit and carrot sticks. There are McDonalds restaurants in 120 countries and territories and they serve about 54 millions of customers each day. (Anon, 2006)Such a success implies a lot of responsibilities such as finding the right management style to keep the business running game a good Human Resources management in order to drive the best workforce to be able to deliver good services and to run across the consumers. The consumers are one of the most important elements for a businesss success so there opinion should be considered. flavor at McDonalds which operates in the food industry it has to provide food that is in respect with consumers health, culture, taste, etc This aspect of the business is called Ethics which is a system of moral principles, being in the business context we spill more of Business Ethics.Business ethics could be defined as the moral values that guide the way corporations or other business mention decisions (Mark S. Putnam.2002).It is at this junction, my research question Has McDonalds PLC achieved its objective of being seen as an ethical business in the mind of its customers? comes in. I dexterity be a maculation prejudiced in my judgement and answer to this question as I commence been a big fan of McDonalds right from childhood. Consequently, I have employed other sources to aid my unbiased and objective analysis of this.Over the years, there have been a lot of cases and reports presenting McDonalds as an unethical business. The question here is how received are all these allegations which are laid against this company? Are there other perspectives as to its credibility as an ethical business and what are pet suggestions as to how McDonald can be more ethical, if indeed they are currently considered unethical in the minds of the consumers? All these are firing to be analysed in my study bringing to the limelight both sides of the coin and critically analysing various prominent case studies such as The McDonalds Beef Fries Controversy, and McDonalds Happy Meal Challenge. With all this in mind, conclusions as to whether McDonalds has been an ethical business go forthing be made and preferable suggestions given as to how to boost their compute.McDonalds has to portray a good image to its customers and its employees by offering a good quality of food. This essay aims to investigate the achievement of McDonald as an ethical business over the years as well(p) as its loyalty lies i.e., its profit or the well-being of the community and the environment at large. The problem is that on various accounts, allegations have been laid against McDonalds as an unethical business. Many ethical issues are subjective and are difficult to enforce and easy to neglect that is why I have come u p with the style of Has McDonalds PLC achieved its objective of being seen as an ethical business in the mind of its customers?InvestigationWith regards these allegations passed on McDonalds as to not achieving the standard as an ethical business, a primary research was conducted in the form if a questionaire This was done to find out peoples opinion on this subject matter i.e whether they conjecture they are ethical or not. I chose a stratified assay of public, because it makes the sample more representative of the whole group. The sample is divided into segments. I therefore chose a sample of 20 people aged from 17 and plus and all of them went to distinct locations in the world. The questionnaire was launched on Survey Monkey (Darrell, 2012), so that everybody could fill it, and I will make the results more general.As secondary research I looked at the McDonalds Sustainability scorecard and for the year 2010 and 2011 (refer cecal appendage 1), to look at the goals that McDona lds has set to meet in terms of ethics. These goals could be included in the questionnaire for the customers to counter or to confirm their affirmation of being ethical.I also looked for unlike articles and point of muckle about McDonalds ethics which will be used to counter McDonalds opinion about its ethics. They are Analysis of The McDonalds Beef Fries Controversy and the McDonalds Happy Meal Challenge.BodyWhat is Ethics?The ethics of a business depends upon the values of its employees. The ethical stance of a business is correspondingly to be determined by the values of aged(a) managers, directors and other important stakeholders. It will also be influenced by codes of conduct which may operate in the industry. The term ethical is used to refer to businesses which explicitly recognise the importance of social responsibility and the need to consider its actions upon stakeholders. This has led to the rise of stakeholder concept. Some businesses now take into account the needs o f employees, customers, suppliers and the topical anaesthetic community as well as shareholders when making important business decisions. The benefits of this approach top executive include the nextIf the needs of the McDonalds employees are taken into account which is ordinarily a higher salary they may be more motivated, more productive, more loyal, more flexible and less likely to leave. However if McDonalds chooses to focus excessively much on shareholder needs might find it difficult to recruit high quality staff.If businesses have a higher regard for the local community they might win their support. For example, if the local community is consulted when expansions plans are announced, there may be less resistance to the construction of new buildings. Having their regard for the local community is also likely to improve the image of the company. In this case, McDonalds could consult the local communities about the food they serve and their origin, this will make less protes tations and this will give McDonalds the image of an ethical business.If the needs of customers are satisfied more effectively there is likely to be an increase in business. For example, if McDonalds deal with complaints in a friendly and supportive manner, customers are more likely to return and spread the good word.One way of considering the impact of businesses upon society is to view all the groups affected by the behaviour of a business as a stakeholders. The stakeholders in the case of McDonalds are likely to include customers, employees, shareholders, suppliers, government and local communities.The following lines of my extended essay will mainly be the comparison and the analysis of roughly information collected from McDonalds which obviously would described itself to be an ethical against some articles found on the internet which contradicts the version of McDonalds of being ethical. While a business is considering its stakeholders, a problem could possible rebel which is the ethical quandary. Ethical dilemma is the moral decisionsthathave to be made when choices are equally unfavourable.With McDonalds being so popular, they have to meet the demand of their patrons, but at the same time, think of ways to make more sales, cut costs, and basically maximize the profits of the firms.During these processes, they face many ethical dilemmas concerning their consumers and competitors.Many Fast food restaurants serve foods that are un sinewy to a high fat content which is detrimental to the health of its loyal consumers. They are basic decisions that these fast-food restaurants like McDonalds have to make with regards to serving healthy food. Should they increase the cost of food served and provide healthy meals or serve deep-fries that can cause health hazards in the long run.most fast-food restaurants tend to go after menus of their competitors. For example, McDonalds started selling twisters also known as curly fries which was originally a product of AW. This food was very high in price at the expense of the consumers as it was unhealthy. This is unethical and these outlets should invest into Research and Development of new foods which would have the health of their consumers at heart rather than copying their competitors and exploiting their customers (Anon. 2008).In some cases, these Fast-food outlets tend to cut down the portions of food served. Many of McDonalds customers have noticed that the burgers are smaller (Anon,2008). Thus they are not satisfied after consume the food. The company increase the price of the food in order to meet the demands of the consumers. This will then make the consumers buy more in order to be satisfied. At this point, there is a question that comes in Should McDonalds reduce the amount of food served at the same price in order to maintain their paper of being honest or to increase the price to maintain their net profit and destroy the reputation as an unethical business?In order for these fast-fo od restaurants to be ethical, the decisions made could any be detrimental to them in terms of their profit margin although it would be to the benefit of the consumers. In this capitalist economy nowadays, which fast-food outlet is ready to suffer at the expense of their consumers?Organisational Structure of McDonaldsTo be able to answer if McDonalds is an ethical company in the mind of its customers I am going to look at the organisations structure of McDonalds. McDonalds Corporation franchises and operates McDonalds restaurants in the global restaurant industry. These restaurants serve menu at various price points providing value in 119 countries globally. This is due to the difference in currencies and of the consumer wealth due to the dissimilar GDP per capita of these countries as well as the varying exchange rate system. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchise arrangements, and developmental lice nsees and foreign affiliated markets under license agreements (Anon, Unknown).McDonalds has a centralized organisational structure. It nitty-gritty that the decision making and the authority are in the hands of few persons in the McDonalds head office. The franchises around the world are dictated how to order, cook and groom all the food from McDonalds headquarters. The headquarters also make decisions on the price at which the products have to be sold (Anon, 2012).Referring to their Global Sustainability Scorecard in the appendix 1, McDonalds claims to be an ethical business by giving back to the community and the environment by working with schools and local organisations, and by showing how it has improve his food and how it improved the working conditions at McDonalds. According to their scorecard, in the countries they operate they have been able to raise $ 170 million from all the countries through the McHappy Day (McDonald Corp. 2011) and $27 million from customer donations . I can actually say that McDonalds undertakes some actions for its community, but it does not actually say what they plan to do with the money they have raised and the reason why they raised money. McDonalds is undertaking actions to give itself an ethical image but it still uses the customers to collect funds instead of using a part of the huge profits it makes. However, it has included fruits and vegetables in its menu in their restaurants in North and South America and West Europe. This could probably mean that they are conscious that their food is healthy enough for their customers. But McDonalds could appear more ethical in the mind of its worldwide customers if it expands the new menu into the others restaurants in the world, since McDonalds has been criminate by health campaigners in America and Europe of helping to cause an obesity epidemic.Case Studies on McDonalds as an unethical business as well as Counterclaims by the company as being ethical.While researching on the M cDonalds ethics an article called McDonalds Beef Fries Controversy (Anon. 2002) was found where McDonalds was sued by Hindu activists in India because of the French fries that were falsely promoted to be 100% vegetarian, while there was some beef flavouring in it. This case could be sort out as unethical, because McDonalds does not respect the religious values of Hindus, thus its social responsibility towards it customers is eluded. Social responsibility is the duty that a business owes those who are this instant or indirectly affected by its activities.McDonalds headquarter makes most of decisions and the franchises follow the orders from the headquarters. This could lead to a problem as there might be bureaucracy and these franchises might not be honest. This affects the image of McDonald, since there is no control of what is being done in the others restaurant. Disadvantages such due to lack of centralised organisational structure could arise as there is no control of the subs idiaries. Thus, franchises have no power to make decisions without consulting the managers due to bureaucracy.McDonalds mission is to be the favourite family restaurant and it believes that this involves protecting the environment at a local and global level. McDonald strives to ensure that its operations today do not have a negative impact on the lives of the future generations. McDonalds goal is to achieve continuous environmental improvement so it complies with all current legislation and where possible, acts in anticipation of future environmental legislation McDonalds bases its environmental program around the hierarchy of Reduce, Reuse, and Recycle and are committed to continuous review, evaluation and improvement of its program. This includes targets and monitoring and reporting on progress towards meeting them.McDonalds business impacts on the environment through-Sourcing agricultural products and other materials to serve and build its restaurants-The operation of its restau rants and administrative functions.McDonalds aim to address these impacts by-Improving energy efficiency-Minimise impacts associated with odours, noise.Previously, there were most famous environmental issue. It was suggested that McDonalds had destroyed hundreds of acres of Brazilian rainforest to make way for large-scale cattle ranching. This not only removes a of import natural resource, but also has an impact on global warming, as the rainforest is an essential mechanism for the absorption of Carbon Dioxide in the atmosphere. McDonalds also yearly produces over a million tons of packaging used for just a few minutes before being discarded. Traditionally a deem of ozone depleting gasses were used in polystyrene foam packaging. In the 21st century, McDonalds uses almost all recycled packaging. However, the company still faces criticism due to the amount of waste it produces. Each of McDonalds US restaurants produces 238 pounds of waste per day and each of its U.S. regional distr ibution centres disposes of another 900 pounds of waste per day(Kevin Thompson. 2006). This is not only expensive to dispose of, but also difficult when considering that quasi(prenominal) quantities of waste are being produced around the world.Aside from the pollution from factories where the food is produced, the unusable waste from nearly all the food they sell, and the massive amounts of power and energy that are required to keep all branches up and running, this corporation is destroying natural rain forests. McDonalds like to purchase their meat from privatised farms, which is not a problem in itself. The conflicts arise when these privatised farmlands are built on the land where a lush rainforest once resided. So not only is McDonalds polluting the air, but they are destroying a large part of what would help to keep clean it out.McDonalds has also been accused for internal ethical issues related to the working conditions and treatment of employees. McDonalds employs over 1 an d a half million people worldwide, over half of them are under 21 years old. McDonalds has adopted age differentials between adult and younger workers, nitty-gritty that they pay most of their employees less than the normal adult minimum wage. For example, McDonalds pays some 16-year olds as little as $6.80 an hour. McDonalds employees also experience poor working conditions with discrimination, illicit working hours, and poor safety conditions (Kevin Thompson.2006). There is little that can be done about this due to the absence of trade unions, within McDonalds, to represent staff. If Milton Freemans possible action of stakeholders is adopted, the needs and expectations of staff are just as important as those of customers.McDonalds employees are frequently underpaid for the amount of time that they work which often extends into illegal amounts of drudge hours. The farmers from which they get their food are also generally underpaid for the amount of produce and meat which they s ell to the corporation, particularly considering the cost that many of these farms have regarding the environment and health of the workers, therefore the buyer power of McDonalds constraints.Over the past 30 years McDonald has been mainly criticised over one thing its food which is claimed to contribute to the increased-level of obesity in US and in the other developed countries. 1 in 5 adults are dangerously overweighting in the UK, while it was reported that 300,000 deaths a year in the U.S related to obesity. McDonalds has also been criticised for exploiting children with advertising, with the Happy Meals where there are toys, as well as colourful advertising campaigns and promotions in schools. The unhealthy diet of many children is contributed with these marketing tactics.Results analysisI observed that most people dont have a concise mentation of what an ethical business is, thus 60% of them as shown in Fig 1 see it as unethical because they think that the food is unhealthy as it has too much fatty and oily food served and healthy food like salad are not served. The chart in Fig 2 follows up this analysis, as 50 % of people who answered this questionnaire think there are now more fruits an vegetable and the other 50% think otherwise.Results from here show that many people think that McDonald has not made a big effort to make the foods healthy as they only focus on the profit rather than the health of their customers.On the other hand, 75% of the respondents agree that, McDonalds sells food that come from sure suppliers. This is because they have read about this information in the different outlets they have been to. The other 25% think the opposite because they have seen disincline items like human hair in fries, among others which has made them unhappy and discontent.Being more specific, I have noted that people have differents point of view on the environmental aspects of McDonalds restaurants.Looking at the diagram above, 75% of people think that m ost McDonalds restaurants are not ecological, because of the amount of energy that is used for the lightning, the heating, and for the different machines that are used in the food processing. They believe that they do not recycle the paper used to serve take-away food. This 75% account for people who visited McDonalds restaurants in Europe.With this questionaire, the opinions of various people where taken into consideration. However, there might have been some bias in judgement as people might like other fast-food restaurants like Pizza Hut, Burger King, SubWay. This could have in one way affected the response given to qestions in the questionnaire. On the other hand, people given this quesstionqire might not have bee knowlegable enough as regsrd the definition and the hidden aspects of ethics. This could have led to misjudgement of Mc.Donalds as an ethical buisness.In addition, people who responded to the questionnaire have visited different oultets of Mc.Donalds, this would greatl y influence their judgemnet as McDonlads is a franchise .Thus different standards might exist as they are managed by different individuals. The McDonalds in America might be different from that in theU.K , although they sell the same type of food, the managerial structure is not necessarily the sam as it is a franchise.ConclusionLooking at the analysis, made and the results gotten from the questionnaire, it can be assumed that McDonalds has failed to achieve its objective of being seen as an ethical business in the minds of its customers. Resources from the internet, journals and questionnaire have helped in psychometric test of this question and conclusion. Articles such as Analysis of The McDonalds Beef Fries Controversy have shown that MacDonalds is an unethical business. In this article, McDonalds falsely marketed its fries made with beef flavouring to its Hindu customers without letting them know about the presence of beef seeing as they are vegetarians.Although, McDonalds p ays their workers according to age, this often discriminatory as the duties in this tackle is not necessarily assigned according to age. This practice goes against the concept of an ideal ethical business.Through this analysis made in this essay, there is another question that could arise, which will to a deeper discussion and consistent thinking about business of nowadays, should be more carry about their stakeholders, or they should be thinking of making more profits.Recommendation trade StrategyMarketing Strategy could be defined as anorganizationsstrategythat combines all of itsmarketinggoalsinto onecomprehensiveplan. A good marketing strategy should be drawn frommarket researchand focus on the rightproduct mixin order toachievethe maximumprofit potentialand sustain thebusiness. The marketing strategy is thefoundationof amarketing plan (Anon. 2012). While investigating we found out that McDonalds have claimed to make some changes which were not known by the customers because it has not been advertised, thus customers have kept seeing McDonalds as an unhealthy and unethical business. On this point we could recommend to McDonalds show to its customers that it has improved his menu for example. To be more efficient they should also undertake questionnaires to customers to find out what they think about them.Organisational structureMost McDonalds restaurants are franchisees and from my investigation we found that it is problem in terms of communication. When the head quarter emits new ideas or new strategy, franchisees might not apply the idea of McDonalds headquarters therefore the franchises could give an unethical image to the customers which are probably not the aim of the head quarter. So what McDonalds could do it to ask for report from the different McDonalds restaurants in other countries of the different changes they could have decided to do. This will help McDonalds to be more concerned and involved in what is happening in these other outlets around than world.BibliographyAnon. (Unknown).McDonalds Corp. 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