McDonalds- I'm Loving It

University Degree Business and Administrative studies

McDonalds- I’m Lovin’ It

Introduction

McDonalds has grown tremendously over the past few decades and the quick growth has come with a fair share of pitfalls. The paper McDonalds- I’m Lovin’ It follows a general theme of the problems that McDonalds has faced in various arenas and mentions the strategies that the company has used to emerge successful. The paper, in general, focuses on: 1) McDonalds and Globalization, 2) McDonalds, the FDA and Nutrition, 3) McDonalds and the Workplace, 4) McDonalds and the Environment, and 5) McDonalds and Corporate Social Responsibility.

McDonalds and Globalization

McDonalds is fast growing and has become one of the biggest global brands in the world today. McDonalds has more than 30,000 restaurants worldwide in over 100 countries serving millions of people everyday. (McDonald’s Corporation, n.d.). Tracking back a couple of decades, the main forces behind McDonalds globalization were probably the growth of technology, capitalism, labor needs in other countries and a greed for size expansion and wealth creation. (Steiner & Steiner, 2006, p. 384-386). Globalization has had both positive and negative effects on the functioning of McDonalds.

The Good

So how has McDonalds become one of the most recognized brands in the world? McDonald's spends years to understand a country’s market before making any sort of commitment. McDonalds has primarily succeeded because of the company’s franchising operations. (Vignali, 2001). McDonalds realizes that for the company to succeed globally, the ideas that work in one country might not work in another. McDonald franchises do business and maintain relationship with the local supplier, which enables the company to develop products based on the local people’s needs. (Vignali, 2001). The company also encourages local franchising (with over 70% restaurants abroad being owned by the locals) (McDonald’s Corporation, n.d), and, hence encourages the local managers to work independently and make most of the important decisions.

In Asian countries, especially, McDonalds has positively impacted the cultural values of the people, created a sense of world culture and improved working conditions for thousands of workers. (Steiner & Steiner, 2006, p. 381-387). To maintain competitive advantage, McDonald’s managers, in countries such as UK, France, India, Saudi Arabia etc. stress upon innovation and constantly come up with new local food items. (Harlan,1994, see also: Gershman, 2007). McDonalds has even provided employment opportunities to millions of people all over the world. But McDonald’s global growth has not been very smooth and the company has had to deal with a fair share of problems.

The Bad and the Ugly

McDonalds has been accused of culture erosion or “Americanization”, environmental destruction, poor labor conditions and causing an increase in obesity in many countries. (Steiner & Steiner, 2006, p.381-384). McDonalds has also constantly faced threats from environmentalists, religious groups, worker unions, animal rights activists etc. over the company’s lifetime. (Steiner & Steiner, 2006, p. 381-384). Many of the company’s restaurants have been raided, burnt down, and completely destroyed by mass protestors in a lot of countries such as France where the company was being held responsible for fast-food and unhealthy introduction and workers exploitation. (Debouzy, 2006).

McDonalds is learning and making desired changes to tackle each problem that the company is facing. For starters, McDonalds now works to protect consumers by introducing healthy foods, provide nutrition labeling on the food products to increase awareness amongst the consumers, protect the employees and the environment and are more becoming increasingly socially responsible.

McDonalds, the FDA and Nutrition

McDonalds’ cares about the consumers worldwide and; hence over the past few years the company has not only made a great effort to make healthy food items a part of the food menu but also provided nutrition labeling on the food products. Time and again McDonalds has been held responsible for the increase in obesity in America and for not providing the consumers with necessary health warnings. (Barboza, 2003).

The underlying reason for government regulations in business can range from flaws in the market, such as not providing adequate information about products and product-content to ...

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McDonalds, the FDA and Nutrition

The underlying reason for government regulations in business can range from flaws in the market, such as not providing adequate information about products and product-content to the consumers to social and political reasons, such as providing healthier and safer products to the customers. (Steiner & Steiner, 2006, p. 288-289). The FDA, after repeated requests from the Centre for Science in the Public Interest, announced in 2003 that food manufacturers were required to provide nutrition labeling and declare the trans-fatty contents in the food products. (Burros, 2003). The pressure to make information available to consumers forced McDonalds to think healthy and the first signs were seen in the introduction of more healthy food options, such as fruits and trans-fat free food items. McDonalds provides nutritional labeling on all the food products at restaurants worldwide, all in an attempt to abide by the federal government regulations and to “reassure customers of the quality of its food”. (Clark, 2005). The company has even made changes to the design of packaging materials, which now display nutritional value of the food contents. (Solley, 2005). Because of constant monitoring by the government and other health organizations, McDonald’s is continuously working to improve the nutrition content of the food and to educate and encourage the consumers to make healthy choices. Simultaneously, the company is working towards providing a healthy and safe work environment for all employees.

McDonalds and the Workplace

In the past, McDonald’s was constantly in the limelight for ill-treating employees and creating unsafe work environments. The job opportunities available at McDonalds were considered unequal and low-paying. (McSpotlight.org, n.d.). But over the past decade McDonalds has made a conscious effort to make changes in the workplace and offer equal employment opportunities to all. Care is also being taken to ensure a safe working environment for all employees at restaurants worldwide. Because of the recent technological boom, McDonalds is now able to properly train all employees. The company not only brings in diversity in the workplace in the form of ethnicity but also provides equal opportunities to handicap people. On June 14, 2006 McDonalds was awarded the “’Freedom to Compete’ Award by the U.S. Equal Employment Opportunity Commission (EEOC) in Washington, D.C. for the company's Diversity and Inclusion initiatives”. (McDonald's Receives Major Diversity Award, 2006).

McDonalds and the Environment

A company is expected to work not only for the betterment of the consumers and employees but also for the betterment of the environment and society. With an increase in environmental concerns among the general public, businesses are constantly being pressurized not only to follow environment-friendly processes but also to use and create environment-friendly products. Since the late 1980’s, McDonalds has been accused on several different occasions for destroying the environment. Steiner & Steiner (2006, p. 466-467) mention in the book Business, Government, and Society, that a few market and nonmarket factors which could pressurize and motivate companies to exhibit higher environmental performance are activist pressures, profit and cost reduction potential, consumer demands, and disclosure requirements. McDonalds has over the years succumbed to activist and consumer pressures and has made a conscious effort to reduce solid-waste and preserve rainforests.

Reduction in Solid Waste

In 1987, the national grassroots campaign, headed by the Citizens Clearinghouse for Hazardous Waste, against McDonalds included not only the Grassroots Environmental activists but also McDonald’s consumers. (Mcspotlight.org, n.d.). The activists targeted McDonalds not only for the inappropriate disposal of solid waste byproducts that resulted from the making of Styrofoam (packaging material) (Mcspotlight.org, n.d.) but also for not reusing and recycling McDonalds containers. (Environmental Defense-McDonald's Waste Reduction Task Force [ED-MWRTF], 1991). The Environmental Defense Fund (EDF), an advocacy organization that had been critical of McDonald's on-site recycling plans, approached McDonalds’ to discuss the environmental issues. McDonald's and EDF established a joint task force on August 1st 1990. (ED-MWRTF, 1991). Many real environmental improvements were generated by the task force. The task force tried to integrate the environmental concerns with the corporations packaging decisions. The main objectives of the task force were to find ways to reduce the solid waste, to reuse the packaging materials, and to use recycled materials in the day-to-day operations of the restaurants. (ED-MWRTF, 1991). In August 1991, McDonalds, in league with the Environmental Defense Fund, developed the Waste Reduction Action Plan (WRAP) (McDonalds Corp, 1994), which was to reduce 80% of McDonalds’ solid waste (McDonalds Corp, 1994) and hence, alter the company's interaction with suppliers, customers, employees and franchisees and give the company a competitive advantage over others.

Preservation of Amazon Rainforests

Up until mid-2006, McDonald’s chickens (which were being supplied to the European restaurants) were being fed on soy grown in the Amazon rainforests in Brazil. (Greenpeace.org, 2006). In order to cultivate soybeans, the cultivators were destroying huge chunks of the rainforest and hence, McDonald’s and other fast food giants were held responsible for the deforestation of Amazon. (Greenpeace.org, 2006). Based on the environmental agency Greenpeace’s research on the causes for Amazon’s deforestation, McDonald’s has agreed not to use chicken fed with soy grown in the Amazon. McDonald’s is working with environmental agencies, suppliers and other organizations to come up with a long term plan to save the Amazon from further destruction. (Greenpeace.org, 2006). McDonalds is increasingly becoming more conscious of the company’s environmental position and is also striving to become more socially responsible with each passing day.

McDonalds and Corporate Social Responsibility

McDonalds is engaging heavily in corporate responsibility. McDonalds has spun around in a lot of issues related to energy consumption, animal welfare, corporate philanthropy, environment, and public and employee wellbeing in a very responsible manner. (CSRwire, 2006). Steiner & Steiner (2006, p. 123-125) states that one of the general principles of corporate social responsibility is that the managers of the corporations are responsible to the customers and the stockholders. McDonalds understands the company’s duties towards the consumers and responds to consumer demands even before government regulations come into play. McDonalds is developing strategies to give back to the community and is keeping the consumers informed about the company’s social responsibility programs through regular corporate social responsibility reports. (Allen, 2004).

McDonalds works with a very large number of outside advisors, individuals, organizations, academics and experts in developing the company’s corporate social responsibility strategy. The CSR reports are useful not only in keeping the society informed but also in making the internal employees aware of the company’s social standpoint. The main strategies of McDonalds revolve around the “products, people and place”. (CSRwire, 2006) and the company has been successful in many of the undertakings.

People

McDonalds keeps the employees and consumers best interests in mind, which are reflected in the companies CSR strategies. Opening doors to consumers through means of chat rooms and blogs, McDonalds attempts to understand what the consumers really care about. (CSRwire, 2006).

Products

By providing healthy food options, such as vegetables and fruits, and working towards animal welfare, McDonalds is being socially responsible. (CSRwire, 2006).

Place

McDonalds is working with many environmental agencies and nongovernmental organizations in an attempt to protect the environment as discussed in the above section McDonalds and the Environment.

McDonalds Socially Responsible Undertakings and Achievements

McDonald supports some very important philanthropic undertakings and has even won awards for some of the company’s social responsible actions, some of which are mentioned below:

Ronald McDonald House Charities (RMHC): The RMHC is an example of McDonald’s commitment to corporate philanthropy. The charity works for children wellbeing, providing not only grants and scholarships but also housing to needy children. (Ronald McDonald House Charities, n.d.).
Helen Keller Award: McDonalds provides menu cards written in Braille to assist blind customers. In 1996, McDonalds won the Helen Keller Achievement Award from the American Foundation for the Blind as the company was accommodating to all the customers. (Louise, 1996)
GolinHarris' second annual corporate citizenship survey: McDonalds bagged the number one position in GolinHarris' second annual corporate citizenship survey, for showing concern for public health, and education and for being good to the environment. (Garber, 2004).
Dow Jones World and Dow Jones North America Sustainability Indexes (DJSI Index): The DJSI indexes “recognize companies that are industry leaders on a broad range of economic, environmental, and social issues” (CSRwire, 2006) and McDonalds has the privilege to be included on the DJSI index.

Corporate Social Responsibility is not an end game but instead is a PROCESS and McDonalds is rigorously working towards making healthy and safe choices.

Conclusion

The paper McDonalds- I’m Lovin’ It, in general, focused on: 1) McDonalds and Globalization, 2) McDonalds, the FDA and Nutrition, 3) McDonalds and the Workplace, 4) McDonalds and the Environment, and 5) McDonalds and Corporate Social Responsibility.

Reference List

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Steiner, G.A., & Steiner, J.F. (2006). Business, government, and society. (11th ed., pp. 288-289). New York: McGraw-Hill /Irwin.

Steiner, G.A., & Steiner, J.F. (2006). Business, government, and society. (11th ed., pp. 381-387). New York: McGraw-Hill /Irwin.

Steiner, G.A., & Steiner, J.F. (2006). Business, government, and society. (11th ed., pp. 466-467). New York: McGraw-Hill /Irwin.

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McDonalds- I'm Loving It

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