This case study seeks to evaluate the interests of various stakeholders of McDonald’s Corporation, its relation and impact to the organisation’s sustainability, with recommendations aimed at propelling the organization into a sustainable corporation. Among the strategic issues affecting sustainability are identified as obesity, advertisements targeting children, environmental pollution and treatments of animals. These and others factors have pressured McDonald’s to shift to a more socially responsible position, as evident in its current corporate social responsibility practices. The study ends with recommendations geared towards a sustainable corporation.
The McDonald's Corporation, established in 1955, is the world's largest fast food service retailing chain with over 31,000 outlets mainly operated by franchises and 465,000 employees in 121 countries. Although the company’s revenue in 2007 was USD22.8 billion with franchised and affiliated sales of USD46.9 billion (McDonald’s Corporation, 2007), McDonald’s revenue only increased at an averaged 8% annually from USD13.8 billion (2000) to USD22.8 billion (2007). Newfound emphasis in the late 1980s on healthy eating and environmental conservation has impacted on McDonald’s strategy and growth.
We will identify the interests of internal and external key stakeholders of McDonald’s since stakeholders supply the company with important resources in exchange for its interest to be fulfilled, thereby creating an exchange relationship (Hill et al, 2004). Examining stakeholders’ expectations in relation to strategy formulation is essential or various stakeholder groups may withdraw their support which could affect the organisation’s sustainability. This is as what was mentioned by Hart (2003) in “sustainable value framework”, that one of its four key elements was integration of stakeholder needs into corporate strategy on a long term focus. A Stakeholder Analysis Model is utilized in the analysis.
4.Stakeholder Analysis Model
From the Stakeholder Analysis Model (Appendix 1 & 2), expectations by various stakeholders that could significantly impact on McDonald’s strategy and sustainability are identified as:
Health care advocates and customers expecting McDonald’s to serve healthier food since unhealthy fast food has caused obesity and various health issues Environmental groups expecting environmental conservation because of large waste disposal and deforestation which causes environmental pollution. Governments and local communities wanted to promote healthy eating. Animal right’s groups expecting proper treatment of animals and slaughtering process.
Next, we will evaluate the strategic issues at hand.
5.1Obesity and other illnesses
One of the main ethical criticisms encountered by McDonald’s in the last 30 years is its imbalanced high fat foods which is largely contributing to the ever-increasing levels of obesity in the U.S. and other developed countries. A Big Mac and medium fries has ‘910 calories, 46g of fat, 13g of which are saturated’ (McDonald’s Corporation, 2005). This is only half the Recommended Daily Allowance for a female adult that does not meet the U.S. dietary requirements.
Medical studies have shown that ‘waistlines are expanding faster in the UK than in any other European country…with 1 in 5 adults being dangerously overweight’ (Walsh, 2003). In 2001, there were reportedly some 300,000 obesity related deaths a year in the U.S. as compared to 400,000 through cigarette smoking (McMans Depression and Bipolar Weekly, 2004). In Ireland, child obesity rate is ten times higher than it was in 1970 (The Guardian, 2008a) and almost 22% of boys and 27.5% of girls aged 2 to 15 were overweight (IASO, 2007).
Other than obesity, foods high in fat, saturated fat, salt and sugar also contributed to heart disease, diabetes, high blood pressure...