Comparative Business Ethics and Social Responsibility of MacDonald Corporation - Case Study Example

? COMPARATIVE BUSINESS ETHICS AND SOCIAL RESPONSIBILITY By Lecturer: of Affiliation: and Comparative Business Ethics and Social Responsibility Introduction/Background The development of organisational theories has attempted to emphasize on the significant of business ethics and corporate social responsibility for the last decades. The expectations of the society regarding the social obligations of organisations are continuously changing mainly because of the influences by varied approaches to social, economic, cultural events and political aspects impacting the business environment; thereby transforming the social mentality, which puts the pressure on local or multinational corporations to carry their business in an ethical and socially responsible manner. Many companies across the globe have attempted to adapt their social responsiveness and the way they relate to varied social responsibilities (Windsor, 2006, p. 95). Macdonald is one of the companies that have made significant efforts of adopting business ethics and corporate social responsibility in order to achieve competitive advantage in the global competitive business environment. Although MacDonald Inch have attempted to change their leadership and operational styles through employing effective organisational strategies, the corporate has faced numerous challenges including criticism from the public and also faced legal issues for manufacturing unhealthy foods; thus a failure to conduct business in ethically and socially responsible manner. Company Overview MacDonald Corporation has undergone varied leadership and operational changes since its inception, in 1937. The company has a long standing history and it has built customer loyalty because of its continued dedication to customer services as being reflected in their customer focused approach. The business is among the leading and high competitive global food industries with more than 34, 000 restaurants serving over 70 million customers globally. The company employs unique business strategies of manufacturing what their customers wants; thus their marketing and operation strategies such as being committed in key success areas including cost efficiency, product promotion and product development have enabled the company to sustain their business in the competitive business world. Despite being able to obtain a position as the leader in the competitive food industries, the company has recently faced numerous issues due to managerial failure; thus posing the company into threats of sustaining a competitive advantage in the market. The company is faced with the issues of staying competitive in the fast food industry and the way it can take competitive advantage for varied opportunities available for them; thus posing threats to effective business performance. Project Aims/ Objectives The aim of the research projects is to critically analyse the significant of comparative business ethics and social responsibility in the MacDonald Company. The objectives of the research include; The project attempts to analyse the significant of conducting business in a socially responsible and an ethical manner in MacDonald Company. To offer detailed analysis of the company in an attempt of employing comparative business ethics and social responsibility as way of achieving business advantage in a competitive business world. To examine or identify problems that has impacted MacDonald Company especially the failure to conduct their business in an ethical and socially responsible manner. To provide effective recommendations vital for enabling the company to continue sustaining their business in the competitive business world. Problem Identification The case for corporate scandals for dealing with managerial failure has attracted public interest on social responsibility of the corporation towards society. MacDonald Inch is one of the companies that have attracted the government and public interest because of varied scandals especially the issue of manufacturing unhealthy products and services. The government research on health identified MacDonald as among the leading companies for being responsible for increased number of obesity and overweight children across many states. The high death rates, which are linked to poor eating habits, have posed threat to the effective organisational performance in MacDonald Corporation. The company was reported as not being socially responsible for their actions and being unethical in their business because of misleading customers through false advertisements. For instance, the case of Pelman versus MacDonald was an indication on the way the company failed to conduct their business in an ethical and socially responsible manner. Literature indicates that many global companies are nowadays aware of the harm that an unethical conduct, which is a major component of managerial failure, can cause on effective business performance (Moore and Wen, 2008, p. 174; Love, 2011, p 67). Malpractices, and unethical behaviors can damage organisational reputation; thus impacting effective business performance. As a consequence governments and business institutions nowadays have attempted to prescribe the significant of conducting business activities in an ethical and socially responsible manner. Situation Analysis of the Company. Situational analysis being one of the effective marketing strategy for planning process, it is also an integral process and a very powerful assessment tool for effective organisational performance (Audi, 2009, p. 56); the situation analysis of the MacDonald Company can be best described by using SWOT analysis strategy. SWOT analysis is an effective strategic tool for analyzing the internal and external factors that are favorable or unfavorable to effective business activities. This strategic tool aims to identify the strengths, weakness, opportunities and threats of the company, whereby, one of the main strengths of MacDonald Company is their brand identity, which enables them to differentiate their products from those of other competitors (Fisher and Lovell, 2003, p. 102). The brand recognition of the company has enabled them to increase revenues and sustaining their competitive advantage in the market. Another strength is that the company partners with other best brands and also about 80 percent of their restaurants are owned by sovereign franchisees; thereby enabling them to become successful in the competitive markets. The company being among the largest market share fast food industry globally is also an added advantage for their success in the competitive market. Additionally, the trend toward health eating habits has posed threats to the company. The government and other health organisations have made significant efforts of fighting obesity; thus people have become more conscious of eating health foods. MacDonald has failed to offer the health food in their menu and this has forced many customers to deviate from consuming their food because it is perceived as unhealthy. The research reveals that companies should communicate well and employ corporate social responsibility strategy because this will enable them to meet the demanding needs of the society efficiently (Swanson and Fisher, 2011, p.57: Ihlen, Bartlett and May, 2011, p. 57). Companies that have attempted to conduct their business in an ethical and socially responsible way have enabled many companies to create superior relations with their customers; thereby increasing their revenues. The law suits against the company have also been the major threats and this is because of failure to conduct business in an ethical way. Corporate reform have strongly influenced corporate social responsibility in many companies globally; therefore, businesses must participate in society in an ethically symbiotic ways through acknowledging the society’s existence and society’s growing demand for ethically responsible business practice (Valentine and Fleischman (2008, p. 658; Schwartz and Carroll, 2003, p. 504). Even though the MacDonald Inch has high brand image that provides huge profits for its stakeholders; the company has been criticized for not being socially responsible due to manufacturing of unhealthy food. The company is influenced by environmental factors; thus it has attempted to analyse the macro environment by employing PESTEL as one of their effective business strategies. First, the operation of the company has always been influenced by policies prevailing in the state and government where they operate. The company is under the control of the government; thus it has made efforts of following rules and regulations imposed upon them by the government of the state (Schwartz and Carroll, 2003, p.504). They also follow local policies and foreign investment policies for franchising their business strategy. Secondly, the company is always impacted by the continuous global economic factors; thus tax and revenue measurements are among the economical factors that have impacted them. Thirdly, the lifestyles of their loyal customers have changed and the demands for consuming healthy products are among the social factors that have affected the company. The changing demands keep changing in varied countries where they operate due to cultural, religious beliefs and other social factors towards food consumption; thereby, impacting effective business performance. Fourthly, the ever changing technology due to increased globalisation has also forced the company to improve their innovative products now and then in order to keep the pace with the changing technology. Lastly, environmental and legal factors are also among the aspects that have impacted the company. The company is being criticized for utilizing harmful elements and use of polystyrene for packing foods, as well as, failure to follow legal aspects of manufacturing healthy foods are among the challenges impacting effective business performance of the company. Marketing Strategy McDonald is one of the companies that have made considerable efforts of employing effective marketing strategies that can enable them to sustain their business in the competitive market. The company employs marketing mix, which includes the pricing strategy, product promotion, product differentiation and product placing strategy in order to reach their targeted customers effectively in the segmented market. For instance, the company selected chicken burger and it distributed it in three reasonable prices. In case of placing strategy, the company utilizes social media including social networking sites such as Twitter, Facebook and also utilizes their company website in order to reach customer effectively. Moreover, the company has attempted to use cost cutting as their pricing strategy of providing fast food products to their customers at the cheapest and lowest prices possible. Additionally, MacDonald also employs segmentation strategy and this is done through categorizing customers in terms of psychographic segmentation, geographical and demographic segmentation. First, the company employs demographic segmentation including age, income and many other aspects in order to meet the demanding needs of their customers. They also use psychographic segmentation and this is based on lifestyle preferences in order to meet the needs of their clients effectively. Although the company aims to increase profits by segmenting their customers in varied categories, taking ethical consideration of not causing harm to their potential consumers is vital (Schwalbach, 2010, p. 93). Moreover, MacDonald Company to achieve long term success and sustainability; they should incorporate their segmentation strategy in their business while taking into considerations social, legal and ethical values. Literature indicates that the relationship between business and society has been framed for the last decades in the light of innumerable business scandals linked to ethical and social issues (Keinert (2008, p. 91; Valentine and Fleischman, 2008, p. 657). For example, the case of Enron Company which became bankruptcy and contributed to a huge scandal, which impacted stakeholders, investors, employers, credit agencies and many other organisations. For the past decades, there has been much focus and concentration on eating habit and living a health life by consuming health products; however, MacDonald has faced varied issues because of varied claims from the public and government about their unhealthy products. For instance, the scandal arose in 2010 when there was outbreak of mad cow disease and the company is also currently facing issues of being responsible for increased obesity, as well as, overweight children in the United States. MacDonald Company should therefore employ corporate social responsibility and adhere to this strategy in order to sustain their business in the competitive market. Researchers have attempted to describe corporate social responsibility as the vehicle for bringing ethics and values into alignment with business objectives (Okoro, 2012, p. 864; Schwartz, 2011, p. 71). It has become widely accepted that for the companies to achieve a competitive advantage in the ever competitive business world, companies should operate their business within social, ethical and legal values accepted by society. There is a strong link between business actions and the society and this goes far beyond the classical perspective of profit maximization. Solutions and Recommendations One of the effective solutions to overcome varied issues that are posing risks to effective business performance of the company is to be socially responsible and conduct business in an ethical manner by manufacturing healthy foods. MacDonald Corporation is a famous fast food restaurant and the company is doing quite well in the competitive market; therefore, there is a need to change their operations. This is through providing customers not only what they want but also not letting their loyal customers down since healthy selection is vital for customers. Another solution is that the company can change the way they manufacture their food; the company should not only focus on quality of products but also advance food preparation in order to reduce calories. The last solution is the need to create awareness about exercise especially for adults. Although children are among the most affected people, the company should not forget about adults because parental lifestyles are automatically generated to children. Informing and equipping parents on the significant of maintaining their body physically fit through exercises is vital. With the increased aspect in the field of business ethics, it is recommendable to offer effective training programs on the significant of conducting business in a socially responsible and ethical manner. One of the recommendations is to understand the relationship between the society and their business; thus a need for introducing the concept of environment of society, to represent external environment of a business. MacDonald should understand the environment of the contemporary society and this is through taking into account all the key significant dimensions including political, social, economical and technological factors as these are among the aspects that can change both business and society. There has always been some controversy regarding business ethics because of diverse understandings that people have towards what constitutes morality and ethics. According to Jin, Drozdenko and DeLoughy (2013, p. 15) morality refers to the people’s standards of doing right, good, wrong and bad but ethics analyses those standards; thus assessing those standards can contribute to better or success in an organisation. It is also recommendable for the company to employ a healthy option strategy and effective advertisement strategy that can enable them to conduct business effectively. Many companies are nowadays assessed from a corporate social responsible angel; thus employing effective healthy option by manufacturing health products is vital. Surroca, Tribo and Zahra (2013, p. 551) assert that global integration has tremendously increased due to rapid technology advancement; thus stakeholders have now been forced to be ethically and socially responsible for their actions in case they want to sustain their business in the competitive business world. The implementation of corporate social responsibility should be taken into considerations seriously; therefore, MacDonald should employ a healthy option strategy in case they want to continue operating their business successfully the contemporary business world. Conclusion In conclusion, although MacDonald Company have attempted to change their leadership and operational styles through employing effective organisational strategies, the business has faced numerous challenges including criticism from the public and also faced legal issues. This is because of manufacturing unhealthy foods; thus a failure to conduct business in ethically and socially responsible manner. The main aim of the research projects was to critically analyse the significant of comparative business ethics and social responsibility in the MacDonald Company. The case for corporate scandals for dealing with managerial failure was identified as the problem, which has attracted public interest on social responsibility of the corporation towards society. The research project analysed the situation of the company and provided varied solutions, as well as, recommendations vital for enabling the company to improve their visions performance; thereby, sustaining their business in the competitive business environment. References Audi, R.,2009, Business ethics and ethical business. New York: Oxford University Press. Fisher, C. M., & Lovell, A., 2003, Business Ethics And Values: Individual, Corporate And International Perspectives. Essex: Pearson Education Ltd. [FT Prentice Hall. Ihlen,O., Bartlett, J., & May, S., 2011, The Handbook Of Communication And Corporate Social Responsibility. Chichester, West Sussex: Wiley-Blackwell. Keinert, C., 2008, Corporate Social Responsibility As An International Strategy. Heidelberg: Physica-Verlag. 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Valentine, S, & Fleischman, G 2008, 'Professional Ethical Standards, Corporate Social Responsibility, and the Perceived Role of Ethics and Social Responsibility', Journal Of Business Ethics, 82, 3, pp. 657-666, Business Source Complete, EBSCOhost, viewed 3 October 2013. Windsor, D 2006, 'Corporate Social Responsibility: Three Key Approaches', Journal Of Management Studies, 43, 1, pp. 93-114, Business Source Complete, EBSCOhost, viewed 3 October 2013. Read More