Good Corporate Social Responsibility Essay Example
McDonald’s Corporation is among the most successful multinational companies across the globe. The company was founded by Maurice and Richard McDonalds as a Barbecue restaurant in 1940 and later grew to become the largest food chain restaurant in the world. With its headquarters in Unite states, the food chain restaurants have managed to grow and expand in over 119n countries, serving over 68 million customers. Under the leadership of Don Thompson, the company draws its operation strategy from Richard’s three-legged system that conjoins firm owners, employs and the suppliers with a view to continuously improve its products and services in reaction to the customers changes in tastes and preference (About McDonalds). The primary core values include customer satisfaction, commitment to business ethics, company profitability, employee’s social welfare and giving back to the community. Al these values have been instrumental in advancing the company’s global recognition and strengthening an innovation culture.
Among the company’s chain of menu include cheeseburger, hamburger, milkshakes, wraps, smoothies, desserts, chicken fries, fish, and salads. The menu is susceptible to change based on the disparity in social culture factors among different market segments across the globe. Its customer-sensitivity approach is the key attribute the firm’s rate of market penetration and sustainability in most global ventures. For instance, McDonald’s food chain in India offers meatless burger because the country’s religious culture is against beef. Hence, it would be ethically subconscious to produce products and services that infringe on customer’s cultural beliefs and practices. In other market, the food chain restaurants introduced vegetarian oriented burgers as a conscious approach to the consumers’ health concerns pertaining to chocolate and meat burgers. The approach has boosted increasing customer’s loyalty as well as luring other potential clients. In 2013, the company’s revenue stood at $28 billion, an indication of the success strategies in the industry.
Notably, the company management operates on a value-chain based management that strives to inculcate a sense of shared value responsibility among the employees, senior management, suppliers and all other stakeholders. The essence of the operation strategy is to promote teamwork and motivation development in the company in a bid to sustain an economic performance trend and build a competitive advantage over market rivals.
McDonald’s corporate social responsibility.
In every market structure, affirm cannot be in isolation with the society and, therefore, has to play direct and indirect roles to create a good rapport with the community. Further, a company is responsible for improving the employees’ social welfare as a supplement towards their motivation to attain the company’s set objectives. Such approach to recognizing the external and internal stakeholder’s needs is regarded as corporate citizenship. By definition, corporate citizenship is the social conscious approach by the firm to undertake its daily operations in compliance with the ethical practices as wells as protecting the environment of the surrounding community. The practice requires firms to invest part of the profit in improving the surrounding environment in expectation of indirect benefits through improved market penetration and company’s values. Corporate social responsibility entails catering environment, workers social welfare, improving supplier relations and understanding the consumers’ needs by producing quality products. The ultimate advantage of the corporate citizenship is that it builds a strong competitive advantage of a firm over its market rivals. However, economic theorists such as Milton Friedman citizen the responsibility claiming that it contravened a company’s objective of maximizing shareholders returns by investing in policies with non-financial return
McDonald’s Corporation integrates its value of giving back to the community in it corporate strategic plan to improve the welfare of the society who form its extensive customer network. Thompson, the company’s Chief executive officer, emphasizes on a top-bottom line corporate citizenship approach that that incorporates people, planet and profit aspects of corporate responsibility. The people refer to the social welfare of workers and suppliers while the planet recognizes the importance of conserving the environment by reducing environmental hazards. On the other hand, profit refers to the indirect value addition incurred by resources invested in corporate social practices. The company’s Sustainability and Corporate Responsibility Committee is responsible for overseeing and developing defensible and economically viable social responsibilities that can aid the company in creating a formidable relationship with all stakeholders. The committee operates in collaboration with the Global advisory council formed that was formed in 2003 to bridge the information gap between success rate of social initiatives and long-term economic benefits (Thompson 24)
Strengths of McDonald’s corporate social responsibility
McDonald’s Corporation advances its corporate citizenship through its three-legged operation strategy that stretch through to employees, suppliers, consumers and the surrounding community. Over the years, the corporation has expanded its universal welfare practice by directly engaging the stakeholders in company’s strategic process as a tactical approach to cement a sustainable market advantage. The strengths can be identified through the various initiatives initiated by the corporation’s management.
Improving products nutritional value
McDonald’s Corporation menu is more inclined to the youth’s tastes than adult’s preferences. Hence, the management core values are conscious of the nutritional values that the products should provide to the consumers. The company introduced a strategy to produce low fat products and reduce saturated fats in burgers. Moreover, sodium and artificial transfer contents have been reduced in the products to protect the consumers against liver and artery complications. For instance, production of fat-free milkshake recorded an overall reduction of fat and sugar content by 12% and 24% respectively. Additionally, McDonalds in partnership with Clinton global initiative engaged in research and introduced vegetable and whole-grain burgers in its product least. The innovation was in reaction to the nutritional value obtained from the ingredients.
Employee Training and motivational development
Through its three-legged system, the company believes that employees are the face of the company through their efforts in innovation to produce quality and nutritious products. The management engages employees through training on food safety system and improvement in professional skills in product processing. The company subjects employees to periodic brainstorming seminars to boost their morale and create a platform for them to express their sentiments.
Children sponsorship in education and sports
Children form the future generation of nay economy and McDonalds Corporation cements their values through educational programs on balanced diet and talent building. The company sponsors approximately ten children to feature in international football tournaments alongside renowned players. Further, the company formed partnership with UK football association in sponsoring football teams in the local community. The company also participates in school education in partnering with schools through supplying happy meal books meant to instill nutritional facts and balanced diet foods to children (Thompson 98)
The initiatives have been instrumental in empowering the future of a young generation in realizing their talent.
Establishing bio-degradable packaging bags
The environmental agencies such as United Nations Environmental program (UNEP) have been advocating biodegradable products to reduce environmental pollution. McDonald’s company introduced fiber based packaging bags that are recyclable and hence reduces pollution from plastic bags. In an effort to foster biodiversity, the company introduced palm oil in substitute for cooking oil n its restaurants. The initiative has been necessitated by the need to reduce health related effects such as cardiac arrests and artery blockage due to cholesterol content.
Reduced carbon emissions in production
The company has invested heavily to regulate its carbon footprint towards the globally recommended level. The company records indicate that the company has managed to improve fuel efficiency by saving over 500 liters of diesel every year. This is attributed to the introduction of bio-diesel tracks for logistic operations (Thompson 46)
Improving supplier relations
The company has improved reduced the bargaining power of suppliers by creating a close relationship through training on farming techniques and funding their operations. Through its agricultural Assurance program, the company has managed to collaborate with over 500000 farmers empowering them on efficient farming methods and financial funding to their farming kitty (Thompson 47). Such an initiative is a corporate citizenship strategy that has accumulated benefits to the company, farmers as well as quality products to consumers.
The company has been promoting green energy initiative by constructing glass restaurants as a way of reducing energy consumption and eventually minimizing operation costs. For instance, the company built a green energy in Argentina – an initiative that has received accolades globally. Further, the company has been at the forefront in tree planting programs across the globe to save the degrading environment.
These initiatives demonstrate the company’s strengths that have contributed its interconnected relationship with employees, supplier, and the surrounding community immensely. Ultimately, the corporate citizenship has culminated in cementing a sustainable competitive advantage over competitors in the food chain industry.
The company’s management has been conscious of the market and customer trends in the food chain industry through research and development program. However, the rapid change in economic factors such as the rise in inflation has greatly hampered its corporate citizenship journey. For example, increased inflation has adversely affected its funding program to farmers due to increase in the cost of farm inputs. As a result, the company’s operation cost has rose leading to reduced profit. Hence, the economic risks have derailed the success of corporate citizenship by the enterprise.
Statement of need
The rapid change in climate has adversely distorted the agricultural sector leading to low quality and quantity of agricultural output. In an attempt to salvage the situation and evade food deficiency, researchers introduced the Genetically Modified Products that are drought resistant and have high yield content. However, the heated debate about its health impact has created a dilemma among consumers. The food chain industry is the most affected with most consumers refraining from consuming fast foods, claiming they have GMO contamination thus risky for consumption. For instance, United States has been advocating Genetically Modified products for both human and animal consumptions. Other countries such as the European Union member states have been reluctant to enforce the initiative citing health complications. As a result, the debate creates a situational dilemma on what facts to believe.
For that reason, it would be appropriate for McDonald’s Corporation to venture in educating its consumers on the gains and risks of Genetically Modified Foods (GMO) in order to allay consumer fears and salvage its dwindling customer base.
The GMO sensitization program will entail Physical and virtual education sessions to the society across the companies venture countries. It will collaborate with health practitioners, nutritionists as well as global non-governmental organizations such as World Health Organizations (WHO) in an effort to cement the process with factual information. The program is critical for the company considering the upsurge of GMO products that have been subconsciously attributed to the distortion growth rate among young children. For example, the use of GMO ingredients in animal foods could result in consumers’ reluctance to consume milkshakes and beef burgers claiming that the milk and beef ingredients are contaminated with the genetic organisms hence unsuitable for consumption
The program will be conducted as a campaign sensitization to the consumer world through theoretical and practical proofs to demonstrate the effectiveness of the organism in human health. This is because, despite the company producing its products from indigenous ingredients, there is likelihood that the production process may consider using GMO organisms following drastic changes in climate that hamper agricultural productivity.
Proposed programs outcomes
The program is projected to achieve the following short-term and long-term outcomes
Dispel fears of GMO foods among the consumers and the entire society
Inform the suppliers on the contents and importance of GMO farm inputs
Sustain the company’s sales level and in turn raise the products demand
The corporate citizenship initiative will strengthen the company’s customer loyalty and market competitive advantage of other marker rivals.
The programmer’s resource requirements will include health experts, refreshments, campaign vehicles, information brochures, virtual advertising costs. By the end of the program, it’s estimated that the initiative will cost approximately $ 200000 per country of venture. The amount is likely to differ slightly considering variations in currency strength. However, the program is projected to accumulate economic returns in triple folds over the next five year period after the program expiration.
The program is estimated to take one year that would be divided among the company’s venture markets with consideration of the respective government’s policy stance on the subject. In countries such as United States where the federal government is supporting GMO foods, the sensitization program may take less time and resources. In the course of the two years, the program intends to empower consumers, suppliers and other stakeholders with information on dangers and benefits of GMO foods in order to safeguard the company’s future growth.
Conclusion and call to action
The Corporate Citizenship program is paramount to the company because it will seal the information asymmetry gap that has affected the consumers and deterred them from consuming fast foods. Inadequate information and facts are one of the contributing factors to consumer’s resistance to accepting the food products. Therefore, the social course is timely as a cautionary measure for the company’s economic performance trend. Ultimately, the initiative will culminate in increased demand for the products and retain the revenue trend.
Thompson, Don. "McDonald’s Corporate Social Responsibility &Sustainability Report 2012 – 2013." (2013): 1-116. Print.
Porter, Michael E., and Mark R. Kramer. "The link between competitive advantage and corporate social responsibility." Harvard business review 84.12 (2006): 78-92.
"About McDonalds." Home: McDonalds.com. McDonald’s corporation, Feb. 2015. Web. 9 Mar. 2015.
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