McDonald's Governance, Risk, and Ethics Case Study

This case study delves into the ethical and governance challenges faced by McDonald's, a global fast-food giant. It examines various scandals, including the horse meat controversy and unethical marketing practices, and their impact on the company's reputation and performance. The study also exp...Read More

Governance Risk and
Ethics

Table of Contents
INTRODUCTION...........................................................................................................................1
1. What company has been chosen for analysis and why?.....................................................1
2. Summary of the case and corporate governance/ethical issues..........................................1
3. Identify main theories related to case.................................................................................2
4. Identification of some key literature relevant to the case...................................................2
5. Summary.............................................................................................................................3
6. A timeline...........................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5
.........................................................................................................................................................5

INTRODUCTION
Ethics are the principles and values that should be followed by the organization in order
to perform operations in an efficient manner. Through these code of conduct, firm will be able to
distinguish between right and wrong doing (Soba and Aydin, 2011). It is the responsibility of
governance to manage the risks in order to provide benefits to the society. The present case is
based on McDonalds which perform their operations in food industry. The below mentioned
report is focused on the scandals of the food chain in the market.
1. What company has been chosen for analysis and why?
The present report is based on McDonald's who provide their products to whole over the
world. They uses strong marketing strategies in order to attract the customer towards their
services. For this, they offer happy meal to their consumers in order to increase their satisfaction
level. The reason for choosing this enterprise is that they are facing some ethical issues in their
day to day operations. Through this, customers are get affected from their activities. Some of the
issues are related to the corporate social responsibility, legal complaints, corporate governance,
fair trade and so on. Through these issues, the organization will not be able to increase their sales
and success in some markets.
2. Summary of the case and corporate governance/ethical issues
There are some ethical issues that are faced by Mcdonald's in the market. The company is
using unethical marketing strategies that provides the toy with the happy meal and due to this the
health of child get affected (Slade and Prinsloo, 2013). Along with this, they are selling products
to their customers that are expired. Mcdonald's is also get affected by the horse meat scandal that
happened in the country. In many burgers horse DNA was found so due to this the food industry
have to faced many problems.
Corporate governance perform their operations in the country so that overall wealth of
the society get improved. So there are some issues that are related to the corporates such as risk
management, Corporate social responsibility, remuneration and stakeholders engagement
towards the business organisation (Wood and Kidman, 2013). There are some internal conflicts
among all the employees and due to this unethical practices increased at the workplace. The food
industry is not following these social responsibilities in an efficient manner so due to this their
overall performance get affected.
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3. Identify main theories related to case
Mcdonald's can use some of theories that are related to the business ethics and through
this they will be able to identify their ethical practices. Some of the theories are individualism,
virtue theory and utilitarian. These are: Individualism theory: This theory stated that organizations are following strategies in
order to gain more profits and revenues (Heizer and Barry, 2013). For example, the food
industry is advertise their services by providing toys to their customers because child will
not be able come and purchase the products. So through this, they are attracting their
consumers in order to achieve the competitiveness in the market. Virtue theory: This theory is based on the practices that are performed by the
organisation on the basis of trust, honesty and with courage. Through this theory, it can
stated that Mcdonald's provide products to the end users at the flexible prices. They
performed their operations in ethical manner as consumers have choice whether to buy
products or not.
 Utilitarian theory: It is the normative theory that is based on actions of company that
whether they perform their operations in right or wrong manner (Pidgeon, Harthorn and
Satterfield, 2011). For example, Mcdonald's is not using horse meat in their burgers and
they are focuses in order to make their customers happy.
4. Identification of some key literature relevant to the case
Mcdonald's perform their operations in all over the world so their global image is good as
compare to other food industries. Due to some ethical issues and scandal, the brand image of the
company is get affected and they will not be able to achieve their objectives. The growth of the
enterprise is get reduced by 0.1% after the horse meat scandal. Further, their sales is also
decreased and number of likes on the social media are reduced. Through this, they will not be
able to achieve success in the market. As per the report of BBC, due to the horse meat scandal
the overall revenues of the supermarkets are get decreased and Mcdonald's was not involved in
this kind of scandal. Further, the firm says that they will not be able to increase their sales due to
Chinese suppliers issues (BBC, 2017).
5. Summary
There are many issues that are faced by the food industry at their work place and due to
these issues they will not be able to improve to their performance in the market. Some scandals
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of Mcdonald's are related to the horse meat, unethical marketing practices. On the other hand,
they are facing some of the ethical issues such as risk management, conflicts, remuneration,
stakeholders interests and so on. For this, they are using some of the normative theories such as
utilitarian, virtue and individualism. Through these, the food industry will be able to improve
their practices on the basis of values and beliefs. From the BBC report it has been concluded that
Mcdonald's was not involved in horse meat scandal. Their sales growth is get decreased due to
the suppliers of china (McDonald's UK growth strong despite horse meat scandal and hot
summer. 2017). The food industry food industry help the country in increasing their economical
growth.
6. A timeline
Activity/Week 1 2 3 5 6 7 8 9 10 11
Research
Company chosen and analysis
Brief summary
corporate and ethical issues
Identification of theories
Identification of key literature
Summary
Submit
CONCLUSION
From the above mentioned case it has been concluded that company have to make
strategies that are beneficial for their customers and through that they will be able to increase
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their revenues. Along with this, they should follow their corporate social activities in order to
provide provide benefits to the society. McDonald's should perform their overall operations in
order to get success in the market.
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REFERENCES
Books and Journal
Scherer, A.G. and Palazzo, G., 2011. The new political role of business in a globalized world: A
review of a new perspective on CSR and its implications for the firm, governance, and
democracy. Journal of management studies. 48(4). pp.899-931.
Muchlinski, P., 2012. Implementing the new UN corporate human rights framework:
Implications for corporate law, governance, and regulation. Business Ethics Quarterly.
22(01). pp.145-177.
Slade, S. and Prinsloo, P., 2013. Learning analytics: Ethical issues and dilemmas. American
Behavioral Scientist. 57(10). pp.1510-1529.
Pidgeon, N., Harthorn, B. and Satterfield, T., 2011. Nanotechnology risk perceptions and
communication: emerging technologies, emerging challenges. Risk Analysis. 31(11).
pp.1694-1700.
Heizer, R. and Barry, R., 2013. Operation Management, Sustainability and Supply Chain
management (Vol. 11). Pearson, UK.
Wood, B. and Kidman, J., 2013. Negotiating the ethical borders of visual research with young
people. Negotiating ethical challenges in youth research. pp.149-162.
Soba, M. and Aydin, E., 2011. Ethical approach to fast food product contents and their
advertisement strategies. International Journal of Business and Social Science. 2(24).
Online
McDonald's UK growth strong despite horse meat scandal and hot summer. 2017. [Online].
Available through:<https://www.theguardian.com/business/2014/jan/23/mcdonalds-uk-
growth-horsemeat-scandal-hot-summer>. [Accessed on 25th March].
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