Mcdonalds Corporate Social Responsibility Analysis

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McDonald’s CSR Analysis

Overview

McDonald’s (McD) operates over 33,000 restaurants worldwide, and employs more than 1.5 million people. In Canada, around 1,400 McD restaurants are stationed with more than 77,000 people employed (Appendix A). In 1954, as a 52-year-old salesman, Ray Kroc came across the small hamburger stand of Dick and Mac McDonald in San Bernardino, California (McDonald’s). He immediately saw market potential with fast paced purchasing of hamburgers and french fries. Ray Kroc became Dick and Mac McDonald’s franchising agent and together they formed a company in 1955 under the name McD System, Inc. This began the growth of the fast food giant we know today, McD. McD primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to obesity trends in Western nations and criticism over the healthiness of its products, the company has modified its menu to include healthier alternatives such as salads, wraps, and fruits (McDonald’s).

The Fast food industry is somewhat fragmented. The seven major competitors only account for 47% of total revenues; McD has 13% of The Fast Food Restaurant industry. The Quick Service Restaurant and Fast Food Hamburger Restaurant category are extremely competitive because each Fast Food Hamburger Restaurant offers similar menus and prices (Appendix B).

Analysis

Desired Image/Strategy

McD desired image is that of “a happy place.” Although the company continues to achieve this image it has changed its vision from cheap and convenient to dedicating itself to quality, service, cleanliness, and a commitment to treating all customers with respect (Kiddon and Light). In regards to corporate social responsibility McD strives to achieve their values each day and improve their environmental and social performances in an effort to obtain to a sustainable future (McDonald’s). In order to achieve their desired image and goals McD is utilizing a combination of strategies which involve increasing brand power by appealing to their consumers. The strategies being implemented are: The Plan to Win and The Five Action P’s (Appendix C).

Quality of Reporting

The CSR reports of McD are very thorough, covering issues such as quality of food, relationships with employees and stakeholders, and environmental standards. McD has been able to achieve high ratings for its CSR reporting in the fast food industry, as well as in business overall. In 2008 The Roberts Environmental Center at Claremont McKenna College gave McD an A+ for the quality for their voluntary reporting on environmental and social issues (McDonald’s). The company was also ranked fourteenth overall among Fortune’s Most Admired List in 2010. Despite the praise McD has received for its CSR there are some issues with its clarity. In the “Progress Snapshot” the company rates itself using: +, ++, +++, and met (lowest to highest), for its effort to achieve their various goals. Although this provides a general outlook on performance, the company fails to indicate the criteria for their rating technique, for example the CSR report does not specify what constitutes a +, ++, +++, and met (Appendix D). Furthermore, the validation of McD CSR report is difficult to assess since there is no external auditor, with only a board of directors and independent public interest groups to overlook the reporting accuracy. This leads to possible bias and exclusion of critical information as the company will not be held accountable to an external body. This is exemplified by the fact that there is no indication of downfalls or negatives in McD CSR report; it is largely an assessment of the positives changes and progression.

Consistency with Actual Behaviour and Reporting

McD reports it has created an effective global forestry policy which affects all of its products. Through use of a global Sustainable Land Management Commitment (SLMC),...
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