The McDonald’s Company is a successful international company that has faced allegations in the media in being unethical and at the same time great praise for actions certain parties have deemed as ethical. This is a discussion of both sides of the argument that will show that the positive benefits of the company outweigh the various allegations and lawsuits that the company has had to deal with in the past.
McDonald’s Operations
Being a global company, the Company’s efforts to help children with life threatening diseases as the fast food they sell contribute to conditions such as obesity, heart disease and asthma. When the media started highlighting the increase in obesity in the American population, the company began to change its diet to include healthy foods.
The public image or view of any company is important and it may affect its profits and hamper the smooth operations of the company. There are now meals that have fruits or fruity drinks as an alternative to sodas.
The hamburgers that the company sells are a combination of different meats from animals in different countries. It becomes difficult to trace contaminated sources of meat when the final product is from multiple sources. Instead of the company using locally grown potatoes it uses genetically modified potatoes (Gibson, 2008). The company has been accused of impacting foreign cultures where the company has set up restaurants such as India and China.
The people especially the young people will no longer appreciate their traditional food or be interested in having a cultural experience. They will want to just eat McDonald’s food. The people will soon start adopting the American culture in celebrating birthdays and other special days. There are those who have been offended by the company. Vegetarians had to be offered a public apology after it was discovered that the company was offering food with undisclosed beef colouring. In Japan the company was found to be using a banned food colouring agent in their food.
Despite the company’s increasing financial success locally and internationally, it has been noted that the factory workers are still being paid at the minimum wage.
Despite all these observations, there are scholars or experts who have defended the company and highlighted that the company is one of the most ethical companies in the world.
The company offers great management training to its workers which they can use in the company or elsewhere once they leave the company. The trainees go through training in all the 25 positions of the company from the counter position to the supervisory positions. The company even began universities to train its staffs. They are taught business management and store operations. The trainees learn concepts such as standard operating procedures, teamwork, cleanliness and attention to detail. These universities are located in the various locations where the company has launched operations.
The organization encourages entrepreneurship in the various countries it has begun operations. The restaurants are set up through the franchise and joint venture systems. Local businessmen get an opportunity to partner with an international corporation with an established brand. It is an opportunity for them to make money, get higher incomes and raise their standards of living. Before a local businessman can partner with the company they also have to undergo management training. There are also forums held globally where all the restaurant owners get an opportunity to meet, interact and share ideas (Tschoegl, 2007). This is a great exposure opportunity for these businessmen.
There is a lot of competition between the franchisees and they have an opportunity to be innovative in how they attract customers. The people who apply to partner with the company have to be people of good repute. Appropriate screening is done as the company wants to be associated with people with great reputation.
When it comes to the transport operations, the company has been innovative in utilizing the local suppliers and reducing their overall costs. Mcdonald’s is also an ethical company when it comes to its operations. It gives back to the local community by doing business with the local suppliers. This has several advantages. It reduces transport costs and reduces exchange rate risk costs which would have been quite high if the company chose to work with global suppliers instead.
Such actions increase local community support and loyalty. It also increases the political support for the company. The franchisees are also now able to focus on the main and important activity of the company which is retailing. This encourages the local suppliers to enhance their operations and products so that they can be able to match the McDonald’s standard. There are companies such as Bimbo Bakeries in Mexico which initially failed the test or interview process however after upgrading its system it got opportunities to work with the international company.
The McDonald’s Company therefore ensures the customers get quality products. The company not only assists the suppliers to upgrade its technologies but it also assists the company to export its products to neighbouring countries. Once these companies’ products pass the McDonald’s quality test they are able to supply their products to other franchisees in the neighbouring countries. This boosts the foreign trade in the country. The company’s actions therefore serve to reduce the host government’s concerns for the balance of payments for their countries.
The company in essence is forcing these employees to comply with the world’s standards since if they supply to a McDonald’s store, they are supplying to the world. In overall, the company as an international company provides positive externalities in the host countries. It increases the rate of foreign domestic investment in the country. International companies increase competition in the host market leading to a reduction of prices of goods in the market, improves quality of products through competition and there is a higher selection of products for the customer to choose from (Farrell, Remes & Schulz, 2004).Other companies are forced to be efficient in production and cut costs to be able to still earn a profit from the lower prices in the market.
The company has high standards of cleanliness forcing their competitors in various countries such as Hong Kong to raise their standards of cleanliness. In the area of animal handling and slaughter, the company has adopted humane slaughtering practices across plants (Blasio, 2008). There are audits carried out at the plants to ensure the workers are concerned about animal welfare. The company is also careful to ensure that its practices conform to the legal and cultural norms of the countries especially in Islamic countries.
Conclusion
The McDonald’s Company has tried to be ethical in its operations and where there have been complaints; it has changed its diet and even compensated customers financially for their wrongdoing. It is an international company that has encouraged entrepreneurship all over the world. It is therefore true it can be said to be one of the ethical companies in the world.
References
Blasio, G. (2008). Understanding McDonald’s among the “World’s Most Ethical
Companies“ Electronic Journal of Business Ethics and Organization Studies, 13(1), 5-12.
Farrell, D., Remes, J. & Schulz, H. (2004). The truth about foreign direct
investment in emerging markets. McKinsey Quarterly, 1, 25-35.
Gibson, A. (2008). McDonald’s: A Good Image with Bad Ethics. Retrieved from:
http://www.neumann.edu/academics/divisions/business/journal/review_08/Gibison.pdf
Tschoegl, A. (2007). McDonald’s – Much Maligned, But an Engine of Economic
Development. Global Economy Journal, 7(4), 1-16.
