The Impact of Boycotting Campaigns on McDonalds - Essay Example

Boycotting Campaigns Introduction A boycott is an event whereby a party or group of parties ceases to conduct and furtherinduces other individuals to cease to conduct their social and business relations with another party. Those who execute boycotts normally do so with the goal of influencing the target organization to reconsider a position it holds or a practice that it may be engaged in. Where an organization faces such a boycott, it can react in one of several different ways, in order to avert, alleviate or mitigate the effects of the boycott action against it. Additionally, boycotts may also be used to punish a particular organization for its activities or affiliations which may not be consistent with the beliefs and values of the society within which such an organization operates, whereby such a society initiates the boycott. Depending on the nature of the activities or affiliations leading up to the boycott, an organization may react similarly to acts meant to have it amend its policy or it may have to pursue more drastic measures. In order to better elaborate on the topic of boycotts, a case study approach is pursued. The organization that is studied is McDonald’s which has been the object of much criticism, due to its procurement practices as well as its product offerings and the environmental impact of its activities. Brief background of McDonald’s The McDonald business began in 1940, when the McDonald brothers opened a restaurant at fourteenth and E streets in San Bernadino, California (McDonalds, 2010). In 1955, Ray Kroc joined the company as a franchise agent, opening up a McDonald’s restaurant in Illinois. This mode of operation (franchising) remains the main mode and it has seen the company expand into 119 countries, serving about 69 million people every day (McDonalds, 2012). It boasts of having more than 1.8 million employees, with 80% of its restaurants being franchised. In its mission statement, the company asserts that it intends to continue improving its social and environmental performance. Boycotting Boycotting refers to acts of rebellion against an organization. One of the earliest definitions is provided by Laidler (1968), who contends that boycotting refers to organized efforts for the withdrawal and inducing others to also withdraw their social and business relations with another individual or institution. The term boycott finds its roots in 19th century Ireland. It was coined by James Redpath, as a description of the ostracism that an English land agent, Captain C. C. Boycott faced (Smith, 2001). In this particular instance, the aim was to communicate to the aforementioned land agent that while he had the right to sell his goods to anyone, there was no law compelling consumers to purchase his goods. Boycotting, while as a term is relatively new, has an extensive history. For instance, during the revolutionary war, American colonists boycotted British goods. Boycotts can take many forms. Withdrawal of cooperation is just one of these forms. It entails social, economic and political non-cooperation. This non-cooperation can occur at different levels and by different stakeholders. For instance, economic non-cooperation would include boycotts by consumers, workers and producers as well as middlemen. Moreover, it may also involve owners and management and even holders of financial resources. Economic boycotts can be defined as the severing of economic relationships, and particularly the buying, selling and handling of goods and services. Boycotts usually have both an instrumental as well as an expressive function. The instrumental function of boycotts is to compel an organization to retreat and is usually achieved through economic withdrawal by consumers. The expressive function of boycotts, on the other hand, is to communicate displeasure or discontentment with the targeted organization. Thus, unlike instrumental boycotts, expressive boycotts may not necessarily achieve the sales figures of the targeted firm. According to (Smith, 2001), expressive boycotts are characterized by a general lack of effort towards convincing consumers to exercise economic withdrawal. Such boycotts therefore tend to be simply symbolic, lacking in consumer organization. The current study focuses on consumer boycotts. These are defined as attempts targeted at individual consumers to implore them to refrain from the purchase of selected goods or services, and whose aim is to achieve certain objectives. Where such boycotts persist, their main function is an instrumental one. They are usually organized by particular interest groups, and are anchored on some sought of ethical paradigm. Consumer boycotts take advantage of social pressure, and are therefore a form of exercising social control over an organization (Klein, Smith, & John, 2002). Moreover, as shall be seen, they are also a form of influencing the corporate social responsibility of organizations. Internationalization of and Boycott Campaigns against McDonald’s As noted, McDonald is one of the oldest fast-food companies in the world. It is also one of the most successful, having expanded into 119 countries, and serving about 69 million consumers each single day. McDonald has evolved to become a household name. It is one of America’s largest employers, and Schlosser asserts that it is responsible for 90% of the country’s new jobs, with one in every eight American workers having been employed in a McDonald’s at one point (2012). This might seem like a big accomplishment but considering the high rate of turnover, this is not necessarily the case. As Schlosser notes, fast food employees form the largest group of minimum wage earners (2012). The author further gives an insight on some of McDonald’s unethical advertising practices, which predominantly target children. For example, McDonalds is the world’s largest distributor of toys (Schlosser, 2012), and it uses this to its advantage to ensure that children consistently consume McDonald’s products. McDonald’s includes a toy in 20% of its sales whereby each Happy Meal comes with a toy. In summary, the allegations levelled against McDonald’s include exploitation of entry-level workers, selling unhealthy foods, exploitative advertising as well as production of packaging waste. Environmental concerns in respect to McDonald’s revolve around issues on sourcing, production as well as the disposal practices of McDonald’s. The Greenpeace organization accuses McDonald’s of being party to the destruction of the Amazon forest(Greenpeace, 2006). The organization traces the production of Soya fed to McDonald’s chickens back to Brazil. It claims that since McDonald sources its Soya from Cargill, a leading party in the advancement of Soya in Brazil, then McDonald is enjoined in the unethical business practices(Greenpeace, 2006). This represents a surrogate form of boycotts, whereby McDonald’s is targeted due to its relationship with one of its suppliers. The Amazon claims are not only linked to environmental issues, but also to social-ethical issues such as land grabbing and massive deforestation (Greenpeace, 2006). On top of this, McDonald is one of the greatest garbage producers in the world (Donella H. Meadows, n.d). This is both because of its market domain as well as because of its size. McDonalds has also been castigated for the way its animals are treated and the methods used to slaughter them. The People for the Ethical Treatment of Animals, PETA, has been pressurizing McDonald’s in order to have it change its chicken slaughtering practices(Sterrett, 2010). According to the organization, the current practices amount to cruelty to animals. One of the less researched areas when it comes to boycotts, and especially expressive boycotts, is the role of new technologies, and particularly social media. New technologies facilitate new avenues through which consumers and consumer groups can spread their campaign faster and reach a greater number of individuals in a shorter time. According to Hennig-Thurau, et al., (2010), the emergence of new media avails the consumer with a wide variety of options through which they can actively provide this information on their experiences. To achieve this end, customers make use of options such as company websites, review sites and social media sites(Gesenhues, 2013). In the current case of McDonalds’ there are even some websites which are dedicated to lobbying against the firm. One such website is http://www.mcspotlight.org/campaigns/current/leaflets.html. Such tools enable a multifaceted approach, as is the case with this website, which indicates that it has operations and campaign material for a number of countries within which McDonald’s operates.Further advances in technology have enhanced the process even more. This is because consumers today do not rely solely on computers. Rather, they can carry out whatever activities that they intend to undertake on their smart phones (Hennig-Thurau, et al., 2010). This means that the simple discontent of a consumer with a single product, or the utter displeasure with the services offered by a particular organization, can travel a long way in a little time. In effect, corporations have to be more careful with their procedures to ensure that they do not fall out with their consumers. Strategic Elements affected By Boycotts The boycotts against McDonald’s have affected many aspects of its operations. These include its supplier relationships, its supply chain management as well as its disposal mechanisms. McDonald, has been compelled to review its supplier relationships and consequently, to intervene in the procedures and activities of its suppliers. McDonald’s acknowledges that they have a responsibility to work together with their suppliers towards sustainability. McDonald’s has established a Sustainable Supply Steering committee, which is responsible for steering the corporation towards sustainable supply (McDonalds, 2010). Dauvergne & Lister point out that McDonald’s contracts an independent non-profit organization to audit their fish catch and certify it as sustainable. The firm goes a step further and incorporates such practices as life-cycle assessment, supply chain tracing as well as sustainability reporting. This incurs extra costs for the organization. Reaction to Boycotts In its attempt to turnaround its image and people’s perceptions, McDonalds has resorted to certain practices. The corporate governance perceived the allegations levelled against McDonalds as real concerns and therefore took measures to mitigate them and alleviate the damage to its public image. According to the company’s page on corporate governance, its success is founded on integrity at both the personal and professional levels. It also identifies McDonalds as being ethical, truthful and dependable (McDonalds, 2014b). These are some big values to vouch on, but they also tend to be empty, especially in the case of multinationals. For McDonald’s, the severity of this assertion is exacerbated by its chosen mode of investment; franchising. The said mode poses challenges due to the need to maintain uniformity. Furthermore, the corporation operates in many countries. Due to the bulky nature of its operation, it faces a number of challenges that may encourage management to employ unethical methods. One of the key areas in which the corporate governance at McDonald’s has particularly been involved in is sustainability. McDonalds’ has stepped up its sustainability efforts, beginning March 2011. On the environmental front, McDonald’s has embarked on strategies that would see it reduce the amount of garbage that it produces. For starters, the corporation has built on-site incinerators with the purpose of reducing the gross volume hauled to a landfill. Secondly, the company has also initiated a plastic recycling program. This program aims at manufacturing other products from the disposed plastics. The corporation takes recycling a notch higher by becoming a consumer of recycled products. McDonald’s outlets, which are company owned, generate an average of 36 tons of corrugated cardboard waste, which is then 100 % recycled in outlets, which have full control of their recycling (McDonalds, 2014). In recent developments, the company aims to extend the scope of their recycling by recycling their cooking oil. It has achieved this in Europe where 80 % of waste oil is converted to biodiesel. According to McDonald’s, McDonald UK was recycling 100% of used cooking oil in making biodiesel which is then used to fuel delivery trucks (2014). This, according to the website results in emission savings of in excess of 3500 tons of carbon dioxide. Furthermore, (Donella H. Meadows, n.d), informs us about some of the reduction procedures that the corporation has undertaken. This includes the shipping of juice concentrates as opposed to the former method of shipping ready to drink juice. This, Donella estimates, has led to garbage production reduction by about four million pounds (n.d). Another reduction initiative is that of packing fries more concretely, with cases now containing 39 pounds as opposed to the former 36 pounds. This reduces the need for cases by two million pounds per year. Another measure includes the direct pumping of juice syrup into receiving tanks, which cuts packaging costs by 68 million pounds annually, and reducing the thickness of its straws lids and burger containers thereby whittling away another 1 million pounds of garbage (Donella H. Meadows, n.d). One can clearly perceive the impact of seemingly minor adjustments in operating procedures. Another sustainable practice the company has taken to is wind power purchasing. This is especially at the company owned outlets, which rely on wind power for 30% of their energy needs (Environmental Leader, 2012). Moreover, the company, through its supply chain contractors, has managed to cut carbon emissions by 173,160pounds and consumption of diesel fuel by 7790 gallons, by resorting to the use of light fleet freights. It has managed to embed the sustainable practices in its corporate culture by rewarding managers who use energy consumption-related tools and applications diligently (Environmental Leader, 2012). On the acquisition front, McDonald’s Europe has resorted to only buying coffee which has been certified by the Rainforest Alliance. They also have a resolve aimed at seeing the company’s use only palm oil that is certified as sustainable, by 2015 (Tepper, 2012). McDonalds, being a fast-food chain, is definitely a large consumer of animal products. Therefore, on acquisition of animal inputs, McDonalds has also resolved to acquire products in a sustainable manner. As earlier indicated, it plans to have a not for profit organization certify its fish catch as sustainable. The corporation does not stop there as it also intends to acquire, process, and sell only those beef portions that are certified as being sustainable. This move is however hampered by the lack of clarity on what exactly sustainable beef is (Tepper, 2012). The corporation captures this as a part of its sustainability endeavours, alongside other practices in its sustainable supply chain such as supplier workplace accountability and animal welfare. Internationalization and Dealing with Boycotts McDonald’s can be said to have reacted suitably to boycotts against it. A firm may react to boycotts in one of three ways. It can ignore the boycotts, fight back or comply with the demands of the boycotters (AlShebil, Rasheed, & Al-Shammari, 2007). In the case of McDonald’s it chose to comply. Such compliance normally harbours numerous benefits for the company, such as a positive reaction in the stock market, as was the case for McDonald’s when it changed its packaging policy (Smith, 2001). The positive reaction is normally due to an anticipation amongst stakeholders that consumers will respond positively to an organization that is perceived to be socially responsible. McDonald’s has resorted to better management of its supply chain, through independent audits and the establishment of a sustainable sourcing committee. Moreover, it is also delicately managing its waste so as to minimize its ecological footprint. What is most commendable about the changes at McDonald is that they cover nearly all aspects of the firm. McDonald’s has not only addressed areas of traditional boycott focus, it has also gone further to generate several initiatives aimed at CSR. The other areas that McDonald’s has looked into include people, whereby it focuses on proper labor conditions for its employees. Moreover, in the stead of toys, McDonald’s now gives out a book with every Happy Meal (Guenette, 2013). The company is working on creating opportunity, and further on promoting diversity and inclusion. McDonalds also concerns itself with giving back to the community. One such program is the Ronald McDonald’s House Charities, through which it extends support to needy children and their families. This is in addition to the various funds and grants which it offers to assist in education and social development. Conclusion Organizations routinely have to contend with boycotts. These boycotts are usually initiated by different public interest groups, with the aim of procuring a withdrawing of the relationship between a group of consumers and an organization. Such boycotts may serve an expressive or instrumental function. An effective boycott usually achieves the instrumental but not the expressive function. In contrast, expressive boycotts usually serve the purpose of inciting a discussion and creating awareness about particularly practices by an organization. With consumer boycotts, the aim is usually to secure the withdrawal of economic engagements between consumers and a target organization. When faced with Boycotts, organizations may choose to ignore, fight or comply with the boycotters. McDonald’s faced boycotts from a number of organizations such as PETA and Greenpiece.org. This was due to complaints about its sourcing procedures as well as issues about the manner in which it treated animals. In response to these boycotts, McDonald’s chose to comply with the demands of boycotters. It took a proactive role in the sourcing procedures of its raw materials, and went as far as to establish a sustainable sourcing committee. Moreover, it also improved its treatment of animals, and has also reduced its waste emission while increasing its recycling efforts. Albeit some issues persist, the firm has managed to steer itself from a harshly criticized entity, to one that is highly acclaimed for its sustainability practices. 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