Business ethics of McDonald's - Dissertation Example

? Business Ethics of McDonald’s Bus 403 – MA Business Research Methods Dissertation Proposal ID: S00403754 Ethical business practices and corporate social responsibility are continually becoming more important in society today; therefore, research has begun to explore whether ethics and corporate responsibility have an effect on consumer behaviour and what the effect(s) might be. This research will focus specifically on if the business ethics McDonald’s Corporation. The aims of this study are (1) measuring consumer knowledge of McDonald’s business ethics (if any); (2) determining if consumers cared about ethics when deciding to go to McDonald’s; and, (3) whether McDonald’s responded to the ethical views of consumers. Data will be collected from 5,000 survey questionnaires, and analyses will be done using SPSS. Key Words: business ethics, corporate social responsibility, consumer behavior, SA 8000, SPSS. Introduction and Background Business ethics holds the central position in my research. Obviously, business is to make money but it is required that companies be in charge of their activities. Some businesses avoid responsibility and continue trying to make profits even when it is a public wrong. Today, business ethics is a topical and well-defined problem. However, as we get in touch with the problem we can see that it is controversial and needs to be analyzed more deeply. According to Beauchamp (2001), corporate ethics started to gain attention in 1970s. The situation has changed gradually by developing new ethical practices and implementing the ideas into society. In the 1990s, the idea of corporate social responsibility (CSR) was introduced as a tool for self-regulation according to ethical norms and international standards. Also, ethics committees (often non-profit organisations) were established to keep an eye on improper practices used by companies. Despite all of these measures to decrease the number of cases of unethical behaviour, there are still plenty of companies which prefer money over values. The following are some examples: terrible working conditions (cheap labour costs), oil spill (low safety investments) or harmful but highly demanded products (high profits). The customer has a main position in business ethics and can play a passive or active role in the case. A passive customer feels that he has no power over the situation and is easily manipulated by companies. An active, socially conscious consumer realizes that he is more powerful simply because he makes final decision whether to buy or not a company’s product. Objectives and Research Questions Today ethical business is not a fashionable trend in the market. As a result, an overwhelming majority of consumers interact with unethical corporations. This research is designed to find out if awareness of business ethics affects customer behavior, or whether they set their consumer preferences according to knowledge of ethics. In other words, I will try to find out how important ethical issues are for customers, specifically with regard to McDonald’s restaurants. I will try to answer to the following questions: ? Do customers have information about McDonald’s business ethics in general and in detail (policy, production)? ? Do customers care about ethical issue when they buy something at McDonald’s? ? Does McDonald’s respond to the ethical views of their customers? Justification of the Project Most countries in the world have its fast food industry. Media sources represent this “mainstream” food as unhealthy and calorie-excessive. Fast food is blamed for a variety of medical problems. But is it result of negative PR or the fact which has scientific basis? On the other hand there is ethic policy of a company (McDonald’s in our case). Assuming that there is part of those who know the actual effects of eating of fast food and the guided policy, do they correct their daily visits? In other words do they use their right to choose? Review of the Literature In the late years, because business ethics have become the important issue, companies started to adjust their policy taking that into account. Also, corporate social responsibility was introduced which is the policy whereby organizations take ethical responsibility for their activities. In general, ethics is the science of morals (J.Cory, 2004). The companies have ethics in their transactions as well. According to Crane &Matten (2004), “Business ethics is the study of business situation, activities, and decisions where issues of right and wrong are addressed”. Business entity has to consider different ethics stakeholders such as suppliers, customers, partners and employees. I will analyze business ethics of fast food chain. Particularly McDonald’s as the largest food chain in the world has been picked up for my research. Customers’ position towards the question is the significant point of the study. One example of this conflict is the global fast food retailer McDonald’s. The business began in 1940 with the first restaurant. Fast food restaurants were opened at 1940-50s as quick service cafes for those who do not have much time to stop by for longer. In 1960s popularity of the trademark has grown rapidly because of well-designed advertising campaign. At the moment the brand is serving about 50 million per a day (Jackle & Sculle). John Love, in “McDonald’s: Behind the Arches”, describes the story of success of the popular trademark. The company has experienced steady growth throughout its history and has become a very high profitable franchise. It seems like a part of American lifestyle which is spreading over the world. Marketing is one of the reasons why people like it. They have high quality propaganda, often renew product line, and listen to customers’ needs. Also they implement large employment programmes what makes them very important employer. But there is the other side of fast food industry. Before stating that side it is reasonable have look at McDonald’s standard meal. Nutrition analysis tells us that it is high calorie fat product containing large percentage of cholesterol (28%). Mostly it comes with a side dish and a beverage. Usually they are French fries and Classic coke respectively. First contains salt over recommended amount, in the second there is too much sugar. (http://www.nutritiondata.com). Health critics say that fast food is harmful because it combines high percentage of fat, calories, salt, and sugar, and low concentrations of vitamins and minerals. This can be cause of heart diseases, diabetes. Also it leads to obesity. It is the fact that American people suffer most of all in this sense. One can say, that everyone decides himself what to eat and where. But there is other disturbing issue which is Schlosser raising in his book. McDonalds tries to force consumer to buy its products through advertisement and price mechanism even making consumer act in irrational way. This company spends more money on marketing than any other firm. Their main target group is children because once boys and girls are get used to Big Mac meal and coke they will visit McDonald’s for the rest life. Eric Schlosser in his book revealed this issue very distinctly. The firm using adverts, happy meal toys and playgrounds. McDonald’s has about 8000 playgrounds in their restaurants. It is reasonable because “playgrounds bring in children, who bring in parents, who bring in money”. (Schlosser, 2001: 47). It is sure way to make money. But it is socially unhealthy as cause of child obesity. Consumer behaviour is shown by Solomon et al (2006) as “the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas, or experiences to satisfy needs and desires”. According to Schiffman and Kanuk, one’s behavior can be determined within certain social atmosphere. It can be family values, group influence or cultural impact. Also customer can have personal preferences such as price, quality, accessibility, services, tastes, and own values. The last point is important. Now has formed some groups who put ethical principles ahead others. We can say that this group is the most invulnerable from brands’ pressure. Ethical business practices and corporate responsibility have become more common and important in recent years. In order to guide corporations to act ethically and responsibly, a variety of standards have been developed, including SA 8000 which was the first such standard to be developed (Rasche 2010, p. 280). SA 8000 is a social accountability standard for corporations to follow in the course of doing business; and, corporations are not required to follow these standards, but do so on a voluntary basis (Rasche 2010, p. 285). SA 8000 provides corporations with specific guidelines on the following: child labour, forced labour, health and safety, freedom of association and right to collective bargaining, discrimination, discipline, working hours, compensation and management systems (Rasche 2010, p. 284). These standards are general and often must be adapted in order to be applicable to a corporation’s specific type of business or geographical, societal, cultural or economic context (Rasche 2010, p. 288) Existing research regarding the effects of business ethics on consumers has found that the effects differ among consumers based on personal values (Steenhaut & van Kenhove 2006, p. 137). In fact, nearly all social behaviours have repeatedly been found to be guided and controlled by personal values and beliefs (Id., p. 150). Currently, however, the manner in which personal values guide consumer behaviours is not fully understood and much more research is necessary. Research Design Research Hypothesis The more knowledge consumers have of a company like McDonald’s business ethics, the more likely ethics are considered in their decision whether or not to do business with that company and the more likely the company is to respond to consumers’ ethical views. Research Methodology The research will use a quantitative, non-experimental approach. Sample The basic requirements for participation in the research are the participants must be over 18 years of age, must have visited a McDonald’s restaurant at least once in the past three months, and they are willing to complete the survey questionnaire. The survey will begin by asking respondents to attest to being over 18 years of age. Setting Research participants will most likely be recruited online, which would allow for geographically diversity of participants. The research will be made known by independent advertising done by the researchers or through an established website that conducts surveys for research and business purposes for a fee. This decision will be made once all of the costs are known. The first 5,000 completed survey questionnaires, which meet all the necessary qualifications, will be chosen for the research. Data Collection and Analysis The exact instruments used in the research have not yet been chosen by the researchers. However, the survey will certainly begin with a demographic questionnaire so that participants’ demographic characteristics can be identified and included in the data analysis. Participants will then be asked to complete a questionnaire(s) related to their knowledge of business ethics in general and about McDonald’s business ethics specifically. The survey will include questions about whether business ethics impact participants’ decisions to interact with the business (i.e. McDonald’s) and if so, how and why it is impacted. Finally, questions will be included regarding whether participants believe businesses (i.e. McDonald’s) respond to consumer ethical views and concerns. Once 5,000 qualified and completed surveys are received, they will be used for the research. All of the collected data will then be analyzed, most likely using SPSS for the analyses. After the analyses are completed, the researcher will review and interpret the results. Limitations and Ethical Considerations No major limitations or ethical considerations have been identified by the researcher at this time. Research Timetable Number Task Resource Start End Duration 1 Contact brand managers-McDonalds Telephone, mail 15/01/2011 26/02/2011 30 2 Start research Internet, books 15/02/2011 29/08/2011 140 3 Put survey online - recruit participants Questionnaire 28/09/2011 07/03/2011 5 4 Analyse and assemble findings PC, SPSS 08/03/2011 24/03/2011 11 5 Back in London. Work on the findings PC 12/04/2011 30/05/2011 35 6 Start writing the dissertation PC 30/06/2011 29/08/2011 44 References Beauchamp, T & Bowie, N. 2001. Ethical theory and business. 6th Edition. New Jersey Prentice-Hall. Bryman. A. 1988. Quantity and Quality in Social Research. Billing and Son Ltd. London. Crane, A & Matten, D 2004. Business Ethics. Great Clarendon Street, Oxford OX2 6DP. UK. Ethics World (2009). [Online]Business ethics, Governance, Anti-corruption. Available at: http://www.ethicsworld.org/[Accessed November25, 2010]. Jakle JA & Sculle KA, 2002. Fast Food: Roadside Restaurants in theAutomobile Age, JHU Press. Love J. F., 1995. McDonald's: behind the arches, Bantam Books. Mcneill, P 1990. Research Methods. 2cd edition. Clys Ltd. Britain. Rasche, A 2010, ‘The limits of corporate responsibility standards’, Business Ethics: A European Review, vol. 19, no. 3, pp. 280-296. Schlosser, E 2001 .Fast food nation: the dark side of the all-American meal. Houghton Mifflin Harcourt. Schiffman, LG et al, 2008. Consumer behavior: A European Outlook, Pearson Education. Solomon, M. Bamossy, G. Askegaard, S. and Hogg, M. 2006. Consumer behaviour. A European Perspective. 3rd edition. Prentice Hall Europe. Madrid. Spain. Steenhaut, S & van Kenlove, P 2006, ‘An empirical investigation of the relationships among a consumer’s personal values, ethical ideaology and ethical beliefs’, Journal of Business Ethics, vol. 64, pp. 137-155. Thomas, R. 2003. Blending Qualitative & Quantitative Research Methods inTheses and Dissertations. Corwin Press, Inc. USA. Read More