Feb 6, 2006
Ethical Criticism of McDonalds
Arguably the most important aspect of an organization is its emphasis on ethical behavior. The key premise was that by ‘doing the right thing’ internally and externally, businesses created a good working atmosphere, while also benefiting society and the environment. The problem is that many ethical issues are subjective and based on one’s values and beliefs. As a result, they are often difficult to enforce and easy to neglect. The result of this is that ‘when the costs are added up, the social balance sheet contains enormous debts to society’ (McEwan, 2001).
It is the notion of an organization’s ‘debts to society’, which led to the branch of ethics known as ‘corporate social responsibility’. This refers to ‘the economic, legal, ethical, and philanthropic expectations placed on organizations by society at a given point in time’ (Carroll and Buchholtz, 2000). This theory of responsibility to society is based around two headings, stated by Wells (1998). Social Responsibility deals with ‘the purposes for which companies should act’ (Wells, 1998), and Corporate Responsibility is the ‘liability attached to a company for actions done in its name’ (Wells, 1998).
Corporate Social Responsibility has increased in importance over the last 15 years, as globalization has led to increased pressure to meet society’s ethical demands and expectations. This pressure is a result of an increased number of stakeholders who ‘can affect or are affected by, the achievement of the organization’s objectives’ (Beauchamp, 2004), as well as the increasing influence and power of the mass media, which is able to pick up on even the smallest issues and re-present them globally. As a result, ‘in a technological age, where news spreads fast and everyone is expected to do his/her part to take care of the world, Corporate Responsibility is a business necessity’ (Allen, 2004).
One example of this is McDonald’s, which published its first Corporate Responsibility Report in 2002 and this was followed up with an updated version in 2004. Yet despite this move, many critics of McDonald’s still believe that this, like many Corporate Responsibility Reports, is simply a medley of generalities and assumptions, that do not provide hard metrics of the company, its activities or its impacts on society and the environment’ (Hawken, 2002), and is ‘peripheral to the core interests of an organization’ (Strategic Direction, 2002). As a result, there is a need to analyze the claims made towards McDonalds, and whether they have been resolved within the two Corporate Responsibility Reports.
McDonald’s celebrated its 50th anniversary on April 15th 2005, and over those 50 years it has become the world market leader in fast food, with an annual turnover today of ‘approximately $40 billion worldwide’ (Smith, 2003). It has maintained a high level of performance throughout those 50 years and today is as successful as ever. For example, 2004 was the first year in the past 17 in which McDonalds tailed positive same store sales every month…while January 2005, total sales increased by 8.5%. Its trademark Golden Arches and Big Mac burger are today recognized in ‘30,000 outlets, found in 119 countries, serving 47 million customers a day’ (McDonald’s Corporate Responsibility Report, 2004). Over the 50 years, ‘the McDonald’s Corporation has traveled from pioneer of a new and uniquely American eating experience, to icon of the global appeal of American capitalism, to perhaps one of the most despised corporate symbols in the history of private enterprise’ (Baker, 2005).
The first McDonald’s restaurant opened on April 15th 1955, in Des Plaines, Illinois by an entrepreneur called Ray Kroc. Kroc had been attracted by a limited menu hamburger stand that turned out high-quality fast food at low prices, run by a pair of brothers, Dick and...