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Role of Corporate Social Responsibility in Mcdonald’s Business

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Corporate social responsibility in the fast food sector is a daunting task as consumers have developed a certain degree of scepticism about claims that any business in this area can be sustainable. Social concerns revolving around health must be addressed in consumer reports, and since most fast food restaurants sell junk food, a number of them have been identified as a primary contributor to the obesity endemic. The business model in the fast food sector also revolves around low costs and fast service; therefore, good corporate citizenship seems incompatible with low wages and unfair work practices, which several fast food chains are guilty. Additionally, the issue of environmental sustainability has confronted several companies in the industry; their operations must be just in time and highly efficient, so sometimes this involves manipulation of the supply chain. Concerns about sourcing materials from partners that engage in unsustainable practices must be addressed. McDonalds’s requires chicken, milk, potatoes, beef, lettuce, tomatoes, oil and several other ingredients to make its products; it ought to ensure that suppliers do not use unethical means to raise or grow those commodities.

How the company is run also matters in corporate social responsibility; if electricity, water and materials consumption is not environmentally friendly, then customers will take notice. Excess waste is simply intolerable, especially with materials that can be recycled; fast foods are in a precarious position because they cannot sell food and retain the dirty dishes, so many of them have to use innovative methods to package their products. Some fast food franchises, especially the organisation under analysis, are global enterprises; therefore, their business practices in other poor countries have been under scrutiny. It is critical to ensure that one does not attract negative customer attention by abusing one’s position as a multinational in those nations. McDonald’s is arguably the most successful fast food franchise in the world, but this financial success has come at a price in terms of corporate social responsibility. The company is guilty of almost all the above-mentioned concerns at some point in time; the 2013 CSR report will be the basis for assessment of its corporate social responsibility.

Role of CSR in The Company’s Business

McDonald’s 2013 corporate sustainability report identifies five pillars that it has worked on: food, planet, people, community and sourcing (McDonald’s, 2014). Food focuses on the dietary richness of the menu items; now the company adds nutrition information to the products it sells, so that people can be aware of the quantity of calories they are taking. It has created a series of aspiration goals for 2020 in which it promises to provide more balanced choices for it consumers. This means having more vegetables, low fat dairy as well as more fibre-rich grains and fruit; its plan is to increase this quantity by about 100%. It also wants to minimise the quantity of saturated fat, sodium content as well as salt in its menu by 2020; this will hopefully be realised through partnership with the Bill Clinton Global Initiative. Currently, the most it has done in this area is to add nutrition information as well as provide non-soda alternatives to individuals. Much is yet to be done to turn around the company’s reputation in this area; its association to obesity is still quite real, and will take genuine effort to turn around (Gunther, 2014).

The other pillar in the company’s sustainability report is sourcing as this part forms a critical component of the firm’s business practices. Currently, the company is trying to improve sourcing practices by encouraging a few partners to engage in sustainable agriculture; however, most of its products are still sourced from intermediaries or organisations that are quite opaque concerning their sourcing practices. In future, it plans to use fibre-based packaging for all its items and intends on getting all of its coffee, palm oil and fish from sustainable sources. Since beef is a difficult item to control, it is working on changing its sourcing practices by 2016 to include beef, which is at least partly verified (McDonald’s, 2014). Other pillars like people have warranted less attention as this area revolves around its employees, yet most of them are still in dire need. The organisation has been promoting more diversity in its rank; it has also offered its employees opportunities to improve their skills. In the area of community, McDonald’s has attempted at strengthening communities by starting the Ronald McDonald charity, which supports needy homes around the world through medical care (Oches, 2014).

Perhaps the greatest area of improvement in the firm’s operation is in the ‘planet’ pillar; concerns about climate change have driven this agenda. Currently, the company has introduced a carbon footprint system in which it estimates the amount of energy it uses within its operations and then works on improving them. Furthermore, it has a water stress mapping system for its restaurants and also looks at the water risk assessment for suppliers (McDonald’s, 2014). The company appears to be using CSR in a reactive way, which is to correct bad practices; several consumers objected to the company’s business practices for a long time. McDonald’s had waited until its reputation has been badly tarnished before it did something concerning its business practices. For instance, customers frequently complained about the firm’s detachment from its producers as it often sources from middle men like Cargill and Simplot (Gunther, 2014). It is only recently that it has started learning about the middle men’s business practices; some of the corporate social responsibility adverts are nothing more than green wash because they do not convey what the company is really about.

McDonald’s has not used its CSR to fully engage with people; while it may have done some charity work for the community, the bigger question is whether the organisation’s impact on the community is more positive than negative (Porter and Kramer, 2011). The company spends $492 million on advertisements that promote the Big Mac, which is laden with saturated fat and other unhealthy ingredients (Gunther, 2014). It would be more responsible for the company to nudge customers to eat healthier food options such as chicken sandwiches as well as salads; this strategy would focus on the core of the business. Engaging with the community starts by focusing on those aspects that relate to the central aspects of operation; this strategy should also be applied to its employees as well. Claims about diversity and opportunities for career growth cover the dissatisfactory working conditions its cooks and waiters go through daily. Statistics indicate that about 52% of all staff at McDonald’s are enrolled in some sort of safety net programs (Gunther, 2014). It is contradictory to claim that one is a sustainable and engaging employer when one thrives on cheap labour or unrealistic wage conditions.

Stakeholder input is also not a strong suit for the organisation as most of their initiatives come after being challenged by the same parties to include them. A case in point was the Bill Clinton Global Initiative, which challenged the company to sell healthy options with its value meals. It was after this challenge that it started introducing vegetables and salad as options in the value category; communication seems to flow outward from the company to external parties rather than the other way around.

Future business appears to include a lot more sustainable practices in the environment; it seems the company has heard the public’s plea concerning its operations. These prompts have caused it to include 2020 aspiration sustainability goals, especially in relation to environmental conservation; however, plans are not as effective as tangible outcomes (Blowfield & Murray, 2011). Company disclosures concerning the organisation’s initiatives have been helpful, but the public is still distrustful of it holistically.

Conclusion

CSR has not done much to boost confidence in McDonald’s because its core business practices are so far removed from the sustainable practices it claims to respect in the report. People are aware of the positive initiatives the company has engaged in but they still consider the overall environmental, societal and economic context of McDonald’s franchises (Gunther, 2014). The negatives are just too many compared to the positives, so CSR cannot be used to overturn bad business practices. McDonald’s has been the poster child for negative capitalism as seen in low wages, disjointed supply chain management and obesity issues; these ideas are hard to eradicate by a few good deeds. Public perception is a serious issue in corporate social responsibility, so even though the company is marketing its community efforts, quite a number of other parties disagree with it (Visser et. al., 2010). In future, it is likely that the organisation will try to alter its core businesses to align itself with corporate citizenship expectations from the public. This can be seen from the 2020 goals set out for its five pillars; this optimistic prediction is likely because of profit motivations; in order to stay ahead, the company has to succumb to external pressure to be genuinely sustainable.

Recommendations

McDonald’s should attack the core objectives to its business practices head on by starting to advertise and sell healthy options. The problem of low wages should also be addressed by slightly raising its products’ prices; McDonald’s could explain to customers that it will pass on the price increases to its employees. Finally, the company needs to deal with supply chain issues by making sense of its sources; it is yet to establish a full-blown program to achieve this.

The report was quite helpful in demonstrating the value of corporate social responsibility because it demonstrated how company initiatives might fail to convince consumers about a firm’s good intentions. It proved that marketing campaigns cannot be sufficient to account for real challenges affecting the public; also reactive approaches are not the way to go. The media, nongovernmental organisations and other watch groups must have a positive view of a company before it can claim to be a good corporate citizen.

References
  • Blowfield, P. & Murray, M., 2011. Corporate Responsibility, second edition. New York: Oxford University Press
  • Gunther, M., 2014. Why McDonald’ should focus on less beef and higher wages. The Guardian. [online] Available at: http://www.theguardian.com/sustainable-business/mcdonalds-sustainable-beef-labor-costs
  • McDonald’s. 2014. Our journey together for good: McDonald’s corporate social epsonsibility and sustainability report. [online] Available at: http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/2.0/pdfs/2012_2013_csr_report.pdf
  • Oches, S. 2014. The house Ronald McDonald build. QSR magazine. [online] Available at: http://m.qsrmagazine.com/charitable-giving/house-ronald-mcdonald-built  
  • Porter, M. E. and Kramer, M. R., 2011. Creating Shared Value: How to reinvent capitalism – and unleash a wave of innovation and growth. Harvard Business Review. 89 nos. 1 and 2 : 1–17
  • Visser, W., et al. 2010. The A to Z Of Corporate Social Responsibility.  New Jersey: John Wiley & Sons, Inc.

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