McDonalds' Crisis Management: A Case Study of Legitimacy and Media

This case study examines McDonalds' response to allegations regarding the treatment of Australian farmers and the potential import of cheaper raw materials. It analyzes the situation through the lens of legitimacy theory, which explains the extent of disclosures an organization makes to avoid societal penalties, and media agenda-setting theory, highlighting the media's influence in shaping public perception. The study assesses the legitimacy of McDonalds' disclosures, emphasizing their open communication, established reputation, and the risk of misinformation. It concludes that McDonalds effectively used these theories to address negative publicity, maintain public trust, and protect its market reputation by openly addressing concerns on its official website and social media platforms.

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2018
McDonalds
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McDonalds is the most popular fast food chain of the world and has its branches spread over various
nations. McDonalds has been operating in Australia from a long time but in the recent time there had
been certain controversies surrounding it. It raised many questions on the working and trust of this
chain and there were various questions inflicted on it for the same. As McDonalds was in news for
importing cheaper raw materials like potatoes (which is the main ingredient for their patties and the
fries they make), there had been many questions raised by the farmers of the country. As the potatoes
were imported at a cheaper price the news was raised that whether McDonalds was dumping the local
farmers of Australia and importing the cheaper stuff. The second question which was in news was that
whether McDonalds was planning to import beef and orange juice to Australia or no. and lastly, the last
of the allegation put was the treatment of farmers by McDonalds. The fast food chain was asked to tell
whether it treated its farmers in a fair manner or no.
These questions were addressed by McDonalds itself of their official website for the world to know.
Asked and answered by McDonalds itself, this way of answering openly was something to capture the
market on the whole. There are certain theories which can be attached to this whole incident.
Legitimacy theory- It brings forth the extent the disclosures the organization gives or the boundaries
which the company has and the information it wants to give to the economy in the environment of
which it works. It is because the company does not want to be penalized or punished by the society for
not disclosing the information fully or hiding certain facts from the people of the society. In the case of
McDonalds, through their disclaimer on website, it told the public how it was not deceiving the farmers
of Australia and it was not treating them unfairly (Friedrich, 2017). It made it a point to make the people
of the economy aware that they were not importing the cheaper products from the other countries and
not letting their farmers grow the produce. Hence, the legitimacy theory of media falls in place in the
McDonalds case (Chew, 2015).
Media agenda setting theory- It is the theory which depicts the ability of the media to place the topics
of great interest and importance in front of the public. It also shows that the news which is shown again
and again is of utmost importance as it is covered quite frequently. So as these topics of treatment of
farmers, the issue of imports of beef and orange juice, etc. rose, McDonalds made it a point to place
these topics and issues on their social media platform in order to be discussed and be in the light of the
people always so that they can be shown as the topics of utmost important for the organization and
something which needs to be in the eyes of the people. (Blasio, 2008)
The second question which arises is the scope of ‘legitimacy’ in the entire thing. Legitimacy means the
ability to prove that what disclosures and witnesses you have provided are valid. Proper justification and
logical arguments are needed to be given along with the things told so as to prove them to be
‘legitimate’ (Cain, 2018). McDonalds was asked to give disclosures for the treatment of farmers and the
questions regarding the beef imports and all and it could be given just by head of the fast food giant.
(Gould, 2010)Hence the reasons why McDonalds can be taken as ‘legitimate’ while disclosing about all
the disclosures are as follows-

 McDonalds came out open about all the issues and allegations inflicted upon it in front of the
entire world and openly addressed all the issues pertaining to the topics which were all over the
news.
 The fast food giant, on its official website, mentioned the entire havoc of the news and itself
posted the questions which were floating all over the news and answered the entire news over a
platform open for all the people to see (Jayaraman, 2016).
 As McDonalds was a well established fast food giant by that time and also had many
competitors which were ready to take the spot of McDonald on the top, hence putting any lie or
fake news which could be challenged by anyone would have been a risk factor as any of the
competitors would have come out in the open about it. Hence, the news portrayed by
McDonalds would be cent percent true (DeRose, 2012).
 Another reason to trust the company was that because of being a highly known and popular
food giant, the organization had built a reputation for itself in the market. by lying upfront and
in front of the entire crowd would just losing the entire reputation which McDonalds had built
all those years across the world.
 The fair financial statements and all the news flashed over their sites was enough to prove that
McDonalds was not lying and whatever it was portraying was true as no organizations can take
the chance of lying on its organization’s official website.
Hence, McDonalds fit both the above mentioned theory by opening about it over the social media and
official website by putting in front all the rumors going about it openly. It made sure that the best way to
reach out to the public and to gain their trust and not let it deter is by the way of letting them known
what is true. As the negative news of McDonalds was over the news and there were various questions
asked about their take on the farmers of Australia and the case of importing the cheap potatoes form
the other countries and also beef and orange juice, it decided to take that negative limelight and put
their point open in front of all. This kind of audience capturing theory helped McDonalds to reach out to
the public at large, in a legitimate way, and gain their reputation in market.

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