Reference no: EM133033681

Global McEthics: Should McDonald's ethics be standardized across the globe? 

{This case examines ethical criticisms of the US fast-food giant McDonald's and explores demands for the company to extend its efforts to maintain legitimacy across the globe. The case focuses on the problems of obesity and unhealthy eating that have confronted the company, which are presented in the context of the broader critique of the chain. These issues cover key concepts around ethics, culture, globalisation and sustainability.}

McDonald's is truly a multinational corporation. By 2014, the firm was operating some 33,000 restaurants in 119 over 64 million customers a day. The market leader in its industry, and one of the most vigorous exponents of a global business approach, McDonald's has pioneered an innovative business model that has since been widely imitated in the fast-food industry and beyond. McDonald's is also hugely popular with its core customer base for providing cheap, fun, convenient food, earning it a range of affectionate nicknames around the world including Maccy D'S in the UK, Donken in Sweden, MCDO in France, Macca's in Australia, and Makku in Japan. With 57 million likes, McDonald's is one of the most liked companies on Facebook. However, McDonald's has also faced enormous criticism of its business practices across the world since the 1980s. In the US and Europe, McDonald's has been one of the main corporate targets of environmentalists, animal welfare activists, nutritionists, and social justice campaigners. Not only does the company have the distinction of being the subject of England's longest ever trial-the legendary 1990s McLibel case-but it was also the unwitting subject of the Oscar-nominated Super Size Me movie, one of the top 20 highest grossing documentaries of all time. McDonald's has probably faced more store occupations, protests, and online against it than almost any other company. Nutritionists and campaigners continue to roundly criticized the company for its standard fare of high calorie burgers and fries that many see as a major cause of spiraling obesity rates, especially among young people. Even its more recent attempts to introduce healthier menu options have often been greeted with skepticism or hostility, either because they are seen as too little too late, or simply not as healthy as they are purported to be. Meanwhile, with increasing affluence in Asia and Latin America leading to a wave of diet-related problems similar to those in North America and Europe - such as escalating rates of obesity and diabetes in children and young adults - many have suggested that the new directions that McDonald's has taken in some countries should be replicated everywhere it does business. Big Mac attack When the epic McLibel trial came to end after more than three years in in 1997, the McDonald's corporation must have thought that things could get not away worse. Although the company was partly vindicated by the judge's verdict concerning the veracity of some of the claims made by an obscure London activist group in the late 1980s, the two unemployed campaigners hat the huge company has spent millions of dollars taking to court were ruled to have proven several of their claims. These included accusations that the company "exploits children" with its advertising; was "culpably responsible" for cruelty to animals; was "strongly antipathetic" to unions; paid its workers low wages; falsely advertised its food as nutritious; and risked the health of its most regular, longterm customers - hardly a positive message to be sending to its millions of customers and critics across the world. The trial attracted massive international publicity, and even sparked the publication of an acclaimed book, TV programme, and a movie. Most damaging of all, the McSpotlight website was launched, which immediately made a wealth of information critical of McDonald's, much of it used in the trial, freely available to an international audience, even to this day. 

More trouble soon came from across the channel when anti-globalization campaigners made international headlines for attacking McDonald's stores in France and other parts of Europe - a theme which then extended to other parts of the world between 2000 and 2010 due to an upsurge in anti-American feeling following the Iraq invasion. At the same time, a major thorn in the company's side in its North American heartland was People for the Ethical Treatment of Animals (PETA) which launched its McCruelty campaign in 1999 to try and force the company to alleviate animal suffering in its supply chain. Having placed a moratorium on its campaign in 200 after McDonald's agreed to make improvements, it was reactivated in 2009 due to a firm's refusal to adopt a less-cruel slaughter methods. However, probably the biggest ethical challenge faced by McDonald's across the globe had been a major contributor to escalating rates of obesity, McDonald's, as the world's leading fast-food company, has inevitably found itself first in the firing line. Among the arguments made by its critics over the years are that the company has failed to provide a balanced menu, that it provides insufficient nutritional information and guidance, and that it actively encourages consumers (especially children) to make unhealthy choices for example by promoting "supersize" portions. Meanwhile governments also started to tackle the fast-food industry in an effort to address health and nutrition issues. In 2007, France introduced a legal requirement for all advertising of unhealthy food and drink to bear a healthy message. In 2009, New York City enacted a law requiring restaurants chains to display calorie information on their menus - which in turn became federal law in the US in 2010. The UK government introduced a voluntary pledge on calorie labelling, signed by McDonald's amongst others, in 2011. Ireland, meanwhile, banned all advertising for food high in fat, sugar, and salt during children's programme in 2013. Big Mac slims down In face of such events, McDonald's has not stood idly by, especially once profit looked to be at risk. Not only were activists and governments focusing more attention on healthier food choices, customer preferences were also clearly changing. The chain launched a substantial turnaround strategy on 2003 where, to many people's surprise, the firm dropped its supersizing options, and put a range of new healthy options on the menu. Including salads and grilled chicken flatbreads, oatmeal for breakfast, and even the opportunity for concerned parents to replace fries with carrot sticks and fruit in the ubiquitous new approach children's "happy meals". Advertising campaigns emphasizing the form's fresh and healthy new approach accompanied the menu changes and extended in-store and online nutritional labelling also followed - moves once vigorously resisted by the company. Beyond its own stores, McDonald's has also launched a swathe of exercise and sports initiatives especially targeted at young people. Promoted under the theme of "balanced lifestyles", the company has sought to show young people the two sides to a healthy lifestyle - a balanced diet and exercise. McDonald's websites in countries across Europe began including sports sections in additions to the usual information about stores and menu, and these have now become a standard feature on national websites. For instance, since 2007, McDonald's Germany has partnered with DFB, the German Football association, in a programme to provide soccer badge clubs for children and young people, which has reached more than a millions participants. Such developments have met with considerable scepticism from some of the company's critics. This has especially been the case when it has been revealed that some of the firm's new menu items, such as particular salads or oatmeal flavors, have more fat and calories that the much-maligned hamburger. However, to this and many other criticisms the company has typically been quick to respond with rebuttals or further refinements in the menu. For example, the firm further refined its Happy Meals formula in US stores in 2012 by reducing the quantity of fries and automatically adding apples. 

Over time it has become clear that he shifts under way at McDonald's are part of a long-term strategic realignments towards the changing societal values and expectations it is facing. This was further emphasized by a commitment to serve Rainforest Alliance - certified sustainably grown coffee in its restaurants, which is now in place in much of Europe and in Australia and New Zealand, as well as some coffee options in the US. In 2013, the company also announced that it would be the first US chain to label all of its fish products with the widely accepted Marine Stewardship Council sustainable fish logo, and subsequently announced that it would next start purchasing verified sustainable beef in 2016. Surprising to many has also been the firm's gradual embracing of greater transparency such as through its "Open for Discussion" blog about sustainability and the "Our Food, Your Questions" initiative that was launched in Canada in 2012. The "Our Food. Your Questions" campaign allows people to submit any kind of questions about McDonald's food to a dedicated website, which it then commits to post online and answer in an open and honest manner. The campaign is an explicit attempt by the company to dispel what it regards as myths about its food, and inform the public better about its products, because as its website acknowledges, "we haven't always done a great job of answering questions". The campaign was hugely successful in Canada, generating thousands of questions, millions of views, and billions of social impressions, as well as garnering multiple industry awards. In 2013, McDonald's Australia went one step further with a "track my Macca's" app that enables consumers to scan their burger's container to discover the source of the food and where it was processed. In most respects, McDonald's strategy appears to have been a success. Trust in the brand has improved in the face of campaigns such as "Our Food. Your Questions", and because the menu is healthier, families have a greater opportunity to provide their children with a more balanced meal under the golden arches. Even the firm's fiercest critics seem to have lost some of their momentum in the firm's heartlands in North America and Europe. Big Mac goes east Despite the apparent success of the McDonald's ethical turnaround in North America and Europe, many of the same threats to its reputation have returned to haunt the company in Asia. With increasing prosperity in emerging economies such as India and China, the demand for eating out and for a whole range of convenience foods has expanded substantially since the run of the century. This has come at a time when Western markets for traditional fast food have become saturated with little opportunity for significant growth. Capitalizing on growth in Asia, McDonald's has targeted major store expansion in the region, with the firm's China business expanding faster than any other market in the early 2010s. But as eating habits have changed, so too have healthy considerations. Rates of obesity in China and India have rocketed since the turn of the century. Although only a few decades ago famine was a more common threat, the region is said now to be facing an oncoming obesity epidemic. Other diet and exercise-related problems such as diabetes and heart disease are also on the rise. To date, activists and regulators have not challenged fast-food companies such as McDonald's to eh same extent that they were attacked in Europe and North America, but growing pressure is clearly evident. In China, researchers have shown that the discourse around McDonald's has increasingly shifted from one focused on it being a cheap, modern place for the young, to also incorporating concerns about "junk food", healthy and environmental considerations, food safety, and associations with Western imperialism. Ethical Corporation revealed that, although widespread in Europe, nutritional information was absent on McDonald's websites for the Philippines, Hong Kong, and China. Moreover, practices now halted in North America and Europe appeared to be much in use in Asia - such as dedicated online kids' zones where the company has been accused of targeting young children with unhealthy food. 

The company this time has been less slow to respond to its critics - a healthy options corn soup has emerged on the menu in China, vegetarian burgers feature in India, and the games, competitions, and special offers featured on the company's Asian kids' zone have largely been scaled back. But calories are not yet typically posted on menu boards in Asia as they are in the UK or the US, and transparency clearly lags behind developments in Canada and Australia. In general, the overall emphasis on healthy eating, exercise, and a balanced lifestyle has yet to be actively promoted in Asia to anything like the same extent as in North Americas and Europe, even if countries such as Malaysia and Singapore now feature such programmes. However, signs that the company is moving towards a more globally integrated approach to health and nutrition emerged in 2013 when the company announced that it would start offering healthy options as part of its "value meals" in all of its 20 major global markets by 2020. The company simultaneously announced plans to promote and market only water, milk and juice as the beverages in its children's Happy Meals.

QUESTIONS: 

1. Set out the main criticisms that have been levelled at Mcdonald's in the West. To what extent are these criticisms likely to be replicated in Asia? What differences can be predicted? 

2. Describe and evaluate the tactics used by McDonald's in responding to its critics in the past. Will these work to the same degree in Asia? 

3. Should McDonald's offer healthy alternatives to the same extent in all of the countries in which it operates, or just those where it has been criticized in the past, or is expecting further regulation? What if customers overseas do not want healthy options? 

4. How could McDonald's seek to avoid further criticism in the future? Can the company realistically present itself as an ethical corporation?

5. How sustainable is the fast-food industry from the point of view of the triple bottom line?