BUSINESS ETHICS Essay

BUSINESS ETHICS

216064813 – ASSIGNMENT 1

September 1, 2019

Background of McDonald’s

According to Encyclopaedia Britannica (2018: para. 1) the first McDonald’s restaurant was initiated in 1948 by brothers Maurice (“Mac”) and Richard McDonald in San Bernardino, California. They started by buying appliances for their small hamburger restaurant from salesman Ray kroc, who was fascinated by their need for eight malt and shake mixers. When Kroc visited the brothers in 1954 to see how a small business could sell so many milk shakes, he detected a simple, efficient way that allowed the brothers to make huge quantities of food at a low prices (Encyclopaedia 2018: para.

1).

Encyclopaedia Britannica (2018:para. 2) explains that “Kroc saw a great promise in their restaurant concept, he offered to start a franchise program for the McDonald brothers.” On April 15, 1995, the first McDonald’s franchise was opened by Kroc, in Des Plaines, Illinois, and in the same year launched the McDonald’s corporation and bought out the McDonald brothers in 1961. The company’s inventory started to trade publicly in 1965.

The McDonald’s public face was invented in 1963 with the introduction of a clown named Ronald McDonald, the double-arch “m” symbol became the most permanent logo of McDonald’s in 1962, it lasted far longer than the tall yellow arches (Encyclopaedia Britannica 2018: para. 3).

According to Encyclopaedia Britannica (2018: para. 4) McDonald’s carried on to expand domestically and internationally, extending to Canada in 1967, it was able to reach a total of 10000 restaurants by 1988 and operated more than 38000 outlets in more than 100 countries in the early 21st century.

SECTION 1: Marketing to children

Explain why people criticize McDonald’s for marketing.

Daniel Boffey (2014: para. 1) explains that “it’s because adverts for McDonald’s healthier meal deals fail to encourage children to choose food that is better for them and instead it promotes a general preference for fast food.”

Kant’s Deontological theory can be explained in two ways.

Categorical Imperative:

Immanuel Kant explains that categorical imperative, an action is ethical if you will allow all other people to perform the same action (Kretzschmar L, Prinsloo F, Prozesky M, Rossouw D, Sander K, Siebrits J & Woermann M 2012:76).

According to Kretzschmar et al. (2012:76) Kant’s Deontological theory, categorical imperative have two principles namely universalizability and reversibility.

Universalizability states that are you willing to make the principle of your action a universal law that all people may follow? And Reversibility states that are you willing to live in a world where everyone behaves according to the universal law? (Kretzschmar et al. 2012:76).

Respect for persons:

Kant’s theory under this formulation says that act as to treat humanity, whether in your own person or in that of another, in every case as an end in itself, and never as a means only (Kretzschmar et al. 2012:78).

An action that amounts to abusing other persons to reach your telos is justified wrong. Other people may assist us to reach our telos, but willingly and with consent (Kretzschmar et al. 2012:78).

APPLICATION

McDonald’s corporation is using children as mere stepping stones to achieve their own goals as they are not taking children’s health into account by only advertising junk food.

McDonald’s corporation is abusing children’s health to achieve their own objectives and the action is justified wrong by Kant’s theory, the action being advertising only junk food and not advising healthy food to built their strength .

SECTION 2: Supply chain beef

According to SICKLER J (2019, introduction, para. 1) reputational risk refers to the potential for negative publicity that have an adverse impact on a company’s reputation.

Explain how McDonald’s was linked to rainforest destruction on 2 different occasions.

VITAL J (2016: para. 1) explains that “fast food giant stresses its Burgers come from British and Irish farms but one of its biggest suppliers has been accused of fuelling deforestation of the Bolivian Amazon and Brazilian Cerrado.” That’s how McDonald’s was linked to rainforest destruction.

Examples

McDonald’s claimed it would only buy food and raw materials from suppliers that have no links to deforestation (KAYE LEON 2017: para. 2).

According to Kaye L (2017: para.2) the company also promised in 2015 to take particular steps to make sure that its paper-based packaging will come from responsibly-managed forest or be made from recycled materials.

KAYE L (2017: para. 4) explains that “Fracesca, De Biase, chief supply chain and sustainability officer of McDonald’s said the company will eliminate deforestation from its beef supply chain by 2020.”

CHINA MEAT SCANDAL

What happened?

According to TrefisTeam (2014, intro. Para.1) in July 2014 a footage was captured secretly by a local reporter in Shangai, showing contaminated meat being processed inside a factory- Shanghai Husi Food- subsidiary of American-based OSI group. The footage also captures workers using expired meat products.

How was it uncovered?

Trefis Team (2014, intro. Para. 3) “The video went viral in the count as it was secretively captured, it forced the company to investigate the processing unit.”

What did McDonald’s do when the news broke?

They hired a Municipal food and Drug Administration to conduct an investigation in the processing unit and after decided to continue its 50-years long business with the food processing group by using different OSI plant (Trefis Team 2014: para. 3).

What was the impact on McDonald’s?

According to Trefis Team (2014: para. 4) China’s government issued a ban on import after the scandal came to light, and as a result of this ban the sales of McDonald’s popular chicken nuggets and fillets were suspended in many Shanghai branches.

What was the outcome of the court case against the supplier?

Laurie Burkitt (2016: para. 3) explains that “the Shanghai Jiading People’s court said in a statement on its ‘microblog Monday’ that it fined two of OSI’s units, one in Shanghai and another in Hebei province-2.4 million Yuan ($365,000) and sentenced 10 people to prison, including Australian Yang Liqun, a general manager at OSI in China.”

McDonald’s did not stop using Husi’s parent company OSI GROUP…..

McDonald’s believes that the local alternatives does not have the quality meat (Trefis Team 2014: para. 5).

The company stated that it will ensure high quality of meat in the future (Trefis Team 2014: para. 5).

McDonald’s is not an ethical business as long they abuse people by using expired meat products and sells them to people who have no idea of their unethical actions behind the scenes.

BIBLIOGRAPHY

Encyclopaedia Britannica 2014, McDonald’s corporation, accessed 28 August 2019, HYPERLINK ” corporation/McDonald’s

Boffey D 2014, Children who see happy meal advertising put burger and fries before healthy choice, accessed 27 August 2019, HYPERLINK ”

Kretzschmar L, Prisloo F, Prozesky M, Rossouw D, Sander K, Siebrits J & Woermann M 2012, Ethics for Accountants and Auditors, 3rd edn, Oxford University Press Southern Africa(Pty) Ltd, Cape Town.

SICKLER J 2019, How to manage reputational risk, accessed 29 August 2019, HYPERLINK ”

VITAL J 2016, Rainforest destruction, Health environment, accessed 26 August 2019, HYPERLINK ”

Burkitt L 2016, ‘U.S. FOOD FIRM OSI CHALLENGES CHINES VERDICT IN MEAT SCANDAL’ WSJ, accessed 31 August 2019, HYPERLINK ”

KAYE L 2017, ‘Can McDonald’s Ever Truly Ditch Deforestation?’ triplepudit Accessed 28 August 2019, HYPERLINK ”

Trefis Team 2014, ‘McDonald’s faces declining sales in Asia after China food scandal’ Forbes, accessed 30 August 2019, HYPERLINK ”