Mc Donalds and Ethics

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Introduction
In April 2010, Christopher Meyer was sitting in his office in Vienna, absent-mindedly staring out of the window. Obviously, he was depressed. While watching the rain outside, he was thinking about the famous words of McDonald’s founder Ray Kroc: "We have an obligation to give something back to the community that gives so much to us." After a while, he leaned back in his chair, sighed, and mumbled: “You were so right, Ray, but work is not done with just giving back”. Christopher Meyer, an experienced McDonald’s executive in his mid-40ies, had recently been promoted to the CSR Manager of Austria. As such, he was responsible for implementing and communicating the CSR activities of McDonald’s Austria, including the new green restaurant design aimed at emphasizing the company’s environmental commitment. The reason for his bad mood was the brand new marketing report that Linda Bucher, the Head of Marketing, had shown him this morning. The report summarized the most important findings of a qualitative study on CSR recently conducted among McDonald’s customers. According to the study, most people had not even noticed the new green restaurant design of McDonald’s Austria, which was supposed to reflect the company’s environmental commitment. However, this was not enough. The study suggested that also McDonald’s various other CSR projects had failed to catch the customers’ attention. In other words, McDonald’s was not perceived as a socially responsible company. While staring at the report, he realized that he would have to rethink the whole CSR strategy of McDonald’s Austria. First, however, he wanted to take a walk in order to clear his head. He took his umbrella and left the office.

The Beginnings of McDonald’s
The Very Early Years The story of McDonald’s began in 1940, when “Dick” Richard McDonald and his older brother “Mac” Maurice opened a little restaurant in San Bernardino, California.2 It was a so-

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BBC, 1998 (http://news.bbc.co.uk/2/hi/americas/132882.stm, accessed May 14, 2010).

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called “car-hop restaurant”, where the waiters brought the food directly to the customers’ cars outside the restaurant.3 In the late 1940’s, Dick and Mac McDonald developed a new business concept with a view to improving their operations: They reduced the product range, decreased prices, and replaced the car-hop system by self-service at the counter. Moreover, they started to focus on mass production and accelerated the food preparation process. After the re-opening in 1948, it soon became apparent that the new strategy would become a big success.4 Here Comes Ray Kroc In 1954, Ray Kroc, a 52 years-old salesman, entered the McDonald brothers’ restaurant in St. Bernardino. Actually, he wanted to sell them milkshake machines. When he saw how the brothers managed their restaurant, however, he was so impressed that he wanted to become a part of it. With a view to spreading the concept all over the US, he entered into negotiations with Dick and Mac McDonald. He indeed became the exclusive franchising agent of McDonald’s and founded the McDonald’s System Inc., the new franchising company.5 By 1961 Ray Croc was running the business on his own, while the McDonald brothers’ activities were restricted to their one restaurant in St. Bernardino. As they were not interested in further expansion, Ray Kroc bought them out at a cost of 2.7 million Dollars.6 Over the years, McDonald’s continued to grow. In 1965, the company went public.7 In 1968, the thousandth restaurant was openend, in Des Plaines, Illinois.8 International Expansion After having captured almost the entire US market, McDonald’s expanded overseas. The first restaurant outside the US was opened in Richmond B.C., Canada, in 1967.9 They also opened restaurants in Germany, England, France, Australia, and Japan. Today, these six countries are 3 4

McDonald’s, 2010 (http://aboutmcdonalds.com/mcd/our_company/mcd_history.html, accessed May 14,2010). McDonald’s Canada,...
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