216064813 ASSIGNMENT 1
September 1, 2019
Background of McDonalds
According to Encyclopaedia Britannica (2018: para. 1) the first McDonalds 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.
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 McDonalds franchise was opened by Kroc, in Des Plaines, Illinois, and in the same year launched the McDonalds corporation and bought out the McDonald brothers in 1961. The companys inventory started to trade publicly in 1965.
The McDonalds 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 McDonalds in 1962, it lasted far longer than the tall yellow arches (Encyclopaedia Britannica 2018: para. 3).
According to Encyclopaedia Britannica (2018: para. 4) McDonalds 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 McDonalds for marketing.
Daniel Boffey (2014: para. 1) explains that its because adverts for McDonalds 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.
Kants Deontological theory can be explained in two ways.
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) Kants 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:
Kants 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).
McDonalds corporation is using children as mere stepping stones to achieve their own goals as they are not taking childrens health into account by only advertising junk food.
McDonalds corporation is abusing childrens health to achieve their own objectives and the action is justified wrong by Kants 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 companys reputation.
Explain how McDonalds 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.
McDonalds 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 McDonalds said the company will eliminate deforestation from its beef supply chain by 2020.
CHINA MEAT SCANDAL
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 McDonalds 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 McDonalds?
According to Trefis Team (2014: para. 4) Chinas government issued a ban on import after the scandal came to light, and as a result of this ban the sales of McDonalds 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 Peoples court said in a statement on its ‘microblog Monday’ that it fined two of OSIs 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.
McDonalds did not stop using Husis parent company OSI GROUP ..
McDonalds 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).
McDonalds 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.
Encyclopaedia Britannica 2014, McDonalds corporation, accessed 28 August 2019, HYPERLINK ” corporation/McDonalds
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 McDonalds Ever Truly Ditch Deforestation? triplepudit Accessed 28 August 2019, HYPERLINK ”
Trefis Team 2014, McDonalds faces declining sales in Asia after China food scandal Forbes, accessed 30 August 2019, HYPERLINK ”