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I am asked to assess how McDonalds could improve their operations ethically.

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Task 1b) I am asked to assess how McDonald's could improve their operations ethically. [P2] Definitions: Stakeholder: A stakeholder is an individual or a group affected by or has an effect on, the business. It can include internal stakeholders such as employees and managers and external stakeholders such as shareholders, banks, customers, suppliers, competitors. Impact on the business and stakeholders of the way the business operates A business is a separate entity from its owners that is made up of an interlinked system where the way the system is run and operated affects all the external areas as well as external stakeholders that are part of this system. The way McDonalds operate has a direct impact on the business itself and its stakeholders as they are influenced by the business's performance, position, reputation and size. As far as the business is concerned, unethical behaviour would have implications on the business such as lack of revenue, bad image, deterioration of reputation and profitability, whereas good ethical behaviour would help McDonalds expand and grow profitably while improving on its existing reputation. The stakeholders would flourish if the business's performance is positive in an ethical manner. ...read more.


McDonalds must meet these requirements in order to be an ethically friendly business. Conflicts of interest between stakeholder groups It is vital for McDonalds to identify its stakeholders. All the stakeholders have different sometimes conflicting interests and priorities. The business must try as far as possible to take into account these various stakeholder interests whenever a decision needs to be made. Within McDonalds, conflicts of interest can take place at all times. One example of such conflict of interest is that McDonalds' shareholders want good dividends which require high profits. This interest collides with the company workers who want high wages which increases costs and lower profit. Shareholder's interest of higher profits also collides with suppliers who want higher profits which increase the cost of sales and thus lower the profit. The managers of McDonalds always want to reduce the costs; however, customers want good quality products which mean higher costs of raw material and therefore higher expenses for the business. Such conflicts of interest could be overcome if McDonalds compromise and take on a balanced approach to meet everyone's interests. McDonalds' aims and objectives could also have a possible conflict with certain stakeholders' interests. ...read more.


b) Suppliers have business concerns such as the availability of regular orders and prompt payments for credit sales. McDonalds would meet the requirements of the suppliers if they behave ethically. c) The local community is interested in the impact the business has on the value of their houses or their quality of life. The quality of life can be anything from the amount of traffic, or parked cars in the area, to any factory emissions. McDonalds would avoid any anything that may affect the local community negatively. This would only happen if McDonalds behave ethically. Drawbacks to the business on the way in which it is operating McDonalds as a multinational company is always under the spotlights and is under pressure from pressure groups. If the organisation would not meet ethical behaviour; it could have serious consequences for the overall success and reputation of the business. A few drawbacks for McDonalds of not operating ethically; could be loss of customers and therefore lower profits. The company's reputation and brand image could also be deteriorated if they are accused of any wrong doing. The impact on the business and stakeholders of the way the business operates I have used the following websites and book to do my assignment. 4. ...read more.

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