Task: Evaluate the Corporate Social Responsibility principles implemented by McDonalds in order to achieve the objective of sustainable production.
Introduction: It was in the 19th century that the notion of business self-regulation was introduced in the society. There was always being a debate and argument among the factions supporting the business groups and the society. In the field of CSR i.e., Corporate Social Responsibility there are two main schools of thoughts. A large faction of people believe that the heads of the business holds the accountability of making profit by keeping in mind the laws and regulations promulgated by the government along with considering in mind the ethical problems so that the friction between the society and the company can be avoided. There is an ideology put forward by the Archie Caroll of the Corporation Social Responsibility abridging the gap between the two facets of the ideology. As per the definition provided by the Archie, the factors CSR includes the incessant expectations in the sections of ethical, economic, legal, and discretionary by the society in which the company is operating (Carroll, 1977). As per one of the major works of the Caroll in CSR, the CSR can be divided into four sections. The below section discusses about the sustainability plan and the CSR plans adopted by the McDonalds. Below is brief description of McDonalds CSR.
The forth-runner in the field of CSR in a global perspective is McDonalds Company. The multinational company has a reputation and record of providing the values and contribution to the society by augmenting its own operations and systems. It is the prime objective and motive of the management and the company heads to drive the company towards the path of high profit. If taken the case of Australian economy, the contribution done by the McDonalds in economy of the country is humungous. According to the results and data of 2012 McDonalds has contributed 0.2% in the GDP. As per the data of AECOM i.e., Architecture, Engineering, Consulting, Operations and Maintenance, the operation of McDonalds in Australia contributes a lot to various Industries. As per the economic data of 2011 the company has expended around $1.1 billion in the Australian economy. The lion share of the expenditure was regarding the purchase of utilities, update of the manufacturing process. In the case of employee wages the company had committed the expenditure over 1 billion. It has been estimated that for each dollar the company spends in the economy 79 cent is being added and contributed to other companies. For each branch or shop of the McDonalds over 100 employments are being generated in the economy (McDonald, 2012).
For any global company like McDonalds, it is very important that it should contribute in enhancing the sustainability rather than just focussing on the consequences made by t in the natural eco system (Schwartz and Carroll, 2003). McDonalds should be an inspiration and guide for other companies and should encourage the practice among its business partners and other companies. The McDonalds follows a strict policy in controlling the waste management, thus it operates with only those companies which operates in an economically sustainable manner. To support this course the company also installed some of the most modern technologies in waste management and recycling (EDF, 2016). In the field of packaging the company has devised a method in which only a limited amount of sources are utilized. This is done while keeping in mind the company’s providing fresh product to the consumer in a comfortable and affluent mode of consumption. In order to minimize its fuel consumption and pollution emission company is using cooking oils as a fuel in transporting vehicles. The company is now renewing and reconditioning the shops and buildings in which they are operating to optimize the consumption of water and electricity. If taken an instance, the production units are selected from native places only, since they utilize less water and the expenditure for its maintenance and preservation is minor. The company has adopted the strategy to build its constructions with high ceilings to avoid air conditioning and windows to expend less on the lights.
Big economic players like McDonalds, not only focus on just contributing to the economic value to the society by limiting their pollution emission in the atmosphere, but also on contribute to the society by revealing the hidden challenges and risks. McDonalds have contributed much more in the field of social welfare they are working in. In many parts of the country the company has provided recreational facilities and amenities for children (Combs, 2002: Mcdonalds.ca, 2016). McDonalds have spread awareness about healthy living and encouraged the children to take parts in physical activities like sports. As a part of it company introduced some healthy foods in their menu which will suffice the palate of health conscious people and also spread awareness about health among the younger generation. In this course is trying to achieve a new standard in animal welfare simultaneously satisfying the needs of the customers (Deng, 2009). The McDonalds has tremendous record providing high quality poultry and meat products.
Sustainability Plan adopted by the McDonald’s
The main policy adopted by McDonalds in its sustainability plan as described in this McDonalds CSR is providing stability in the elements of the environment by limiting their pollution emission in the environment. The company is not only focussing on controlling its own emission but also compelling other companies to adopt a policy of less emission and consumption. The company select only those supplier companies who have adopted these policies. By using the fund from World Wildlife Fund the company has devised a better sustainable plan in order to reduce the impact on the environment and enhances the engagement of customers, employees and suppliers with due course of the company (Ingenbleek and Reinders, 2012). The major milestone covered by the company in this pan is laying the stone for Global Roundtable for Sustainable Beef i.e., GRSB. The main role of the GSRB is to make aware the significant players in the field to trail the path of economic and environmental ways of processing and producing the beef. Since the production of the beef fluctuates at various places according to the geographical condition, the company has decided to start the program in Canada which is primary hub of beef production and hence is aiming at spreading sustainable principles all over the world by 2020.
The company has also implemented its sustainable particles in the department in the field of packaging. The company has a diverse policy of delivering the products to the consumer in an easy to handle way. The major products of the company like sandwiches, coffee and other food products. Normally the materials used to pack the products are natural fibres like papers and cardboards. Among the major companies all around the world, McDonalds is the first company which was the part of Global Forest and Trade Network. This step by the company was an initiative at a global level which eradicated the illegal categorization and logging. This step was taken because of the goal set in 2014 to avoid the products which are circulated through the illegal logging within the supply chain. The objective was set not only to avoid the illegal logging from the market but also endorsing the natural products which are generally manufactured by the local communities. This step is a subsidiary goal to the major objective of attaining sustainability in the supply chain of the company by the year 2020. The McDonalds’ lion share of the income comes from coffee. The company is following the policy of providing its coffee products from the sources which are sustainable. The products provided in the Brazil are approved and certified by a body called Rainforest Alliance Certification. The same body certifies around the 22% of the coffee which is served in the United States of America. In order to attain sustainability in the product the company is cooperates and engages with the farms and plantations that follows the rules and are being certified by Rainforest Alliance Certification. The company is also trading directly with the farmers in order to avoid any intermediate.
Apart from coffee, chicken is also a major source of revenue for the company which is now being considered under the program of sustainable production. In the global market there are no any specific norms for chicken production which are accepted widely. Because of this the company is involving with the poultry farmers and are instructing them of a certain standard and clear guidelines by which sustainability in the chicken production can be maintained. A new augmented way of lodging system is being devised by the company to reduce its pollution emission by the use of natural and innate sources of energy. The additional steps by the company are also taken by the company to make aware the farmers about inconsiderate use of the drugs in poultry farming. As a part of it the use of soy is encouraged among the farmers which are a sustainable way of poultry production. Soy is the major source of protein which can be used for poultry nutrition. As a part of increasing the sustainability in the company production the company is using palm oil in cooking food for the consumers. Only the palm oil produced by the means of sustainable sources and which are authorized by the Green Palm Book are used in the company shops (Earthisland.org, 2016).
When area of animal welfare is considered, McDonalds has a major role to play since the majority of its products are synthesized from animal meat and poultry according to this McDonalds CSR. The 99.7% of the farmers who are supplying the company with beef, pork and poultry is being examined and certified by an independent audit company. In the field of meat and poultry production the inconsiderate use of drugs is a topic to ponder over (Honkanen and Ottar Olsen, 2009. Farmers are increasing the antibiotic intake of the live stocks to enhance the immunity from diseases. This is reducing the quality of meat provided and therefore the level of toxins in the meat is being observed at a very alarming rate. The company is indulging directly with the farmers in order to make them aware of the consequences of careless use of antibiotics. As observed in this McDonalds CSR the company is accepting the meat products from the farmland which are not using the antibiotics which are prohibited by the World Health Organization. According to WHO some of the antibiotics which are safe for the human body can create dangerous impact in animals. Thus WHO has declared many of such antibiotics as illegal. Apart from this the company is also taking the aid of vetenary doctors to found out whether the animal was given proper care or not. In order enhance the production of meat farmers relying on growth promoting hormones. Before buying meat, company makes sure that the hormone only used under an acceptable limit. If the use of the hormones were not in a controlled method the meat will cause a hazardous impact on the health of the customers. Keeping in mind all these risks the company has devised a strategy to encourage the sustainable way animal husbandry and poultry farming with controlled use of antibiotics and hormones.
In the case of energy consumption McDonalds is cooperating with the suppliers and its business partners to devise a way to decrease the resource depletion by reduced energy consumption. In order to reduce the consumption of electricity the company is using the LED bulbs for illumination. When relatively to the number of customers, the expenditure on electricity has reduced to the year 6% in 2014. By the use of the LED bulbs in its shops and branches the company had saved around 11 million dollars expenditure from the bill of energy consumption. The new stores and buildings are being upgraded accordingly to allow the sufficient passage of air and electricity so that the energy consumption on the illuminations and air conditioning can be reduced. McDonalds is also a role model for other companies in the field of recycling. In order to reduce its contribution to the pollution and reduce its waste to the maximum way possible, the company has installed most modern technologies to recycle the cardboards, cooking oil and paper (McDonald, 2014).
The company has installed a plant for recycling the cooking oil into bio diesel which can be used for the purpose of transportation. In the field of water recycling and its conservation McDonalds play a very crucial role. The company has built some rain harvesting plants in the premises of its outlet as an initiative to conserve water for a long term. In its entire outlets and shops water efficient taps are used to reduce the wastage of water. To trace down the water challenged are the company is taking help from Water Resource Institute (WRI) and thus develop strategies to solve the problem. On the way to strengthen this campaign company had spread awareness among its workers about the significance of the conservation of water. The employees are given special training and classes on how to reduce the consumption of water and energy in a tactical way (Jones, Hillier and Comfort, 2014). The employees are also given training and instructions in order to effectively make decisions. The company is making advances in the region of water conservation by total redesigning of its system processes and the technologies. At the earlier stage of the company the exotic and costly methods were used for decorating the outlets. But the company is now using the natural vegetation and products in order to make its shops and restaurants beautiful. This was both eco-friendly and cost effective since the natural vegetation is very cheap and require very less maintenance (McDonald, 2014).
Benefits and Perils of adopting sustainable plan
The below section of this McDonalds CSR discuss about the positive and negative aspects of implementing the sustainable plan. The sustainability plan adopted by the McDonalds has benefited it a lot since the plan has helped the company to reduce the cost of system operations and business process. As per the plan, the company has reduced the consumption of water electricity and other sources by the use of LED, increased ventilation water recycling and installing other most modern technologies. The newly adopted civil engineering plans for the company buildings reduced the need of air conditioning and lightning in the restaurants and thereby reduced the electricity bill. The installations of the water efficient taps in the restaurants of McDonalds have significantly reduced the water consumption and the expenditure on it. The company has succeeded in involving in the sustainable of production which not only ensured the supply of quality products but also sustainability in the supply of products. This plan discussed in above McDonalds CSR included the strict monitoring and scrutiny of the production which ensured that the farmers are not using the drugs and hormones in an inconsiderate way. In order to reduce the carbon emission and contribute more in the reduction Global warming the company is now using the used cooking oil as biodiesels in the transportation vehicles. This step has significantly reduced the emission of carbon but also reduced the company’s expenditure on the fuel (Conservation International, 2016).
Although to make sure that the suppliers are engaging in the sustainability plan of the company, additional expenditure has to be incurred to determine the company standards. The series of certifications and other inspections the company has to go through will make a delay in the process and costs additional charges. In most of the countries no specific standard is being decided for the production and delivery of meat and poultry. The company has to enforce its own standards on the farmers and the suppliers. The company follows a strict policy to not buy the products from the farmers who are using the antibiotics and the hormones in a less controlled manner. This action will deny the company to select other suppliers who are selling their products at a very competitive and inexpensive way. The company denies the service from the suppliers who are using the abolished medicines by WHO. It is a very cumbersome and expensive task to follow this sustainable plan as the suppliers have to maintain a specific standard and their product goes through a series of tests.
This challenge time lag and additional expenditure can be eliminated by the company via adopting an efficient vertical integration. In this Vertical integration the business processes will be combined and integrated as discussed above in McDonalds CSR. Although the activities will be done by different terms the activities will be under the strict supervision of McDonalds. For instance, the poultry and the animal husbandry farms can be acquired by the McDonalds. The company can also open its own firm for production of meat and poultry. This will be a very effective method since the company have total power over the quality and production of the meat and poultry. Company can inspect the intake of the live stocks and check the quality of the meat produced directly and hence more time and effort can be saved in the process. By doing this the company can indulge and cooperate with the quality checking and meat auditing companies and demand for a more strict scrutiny of the product which will ultimately result in the augmentation of the quality of company products.
After all the main purpose of conducting a business is to make profit, but it should be done a way which minimally exploits the ecology and its sources. As discussed above in this McDonalds CSR heavy exploitation of the environment has resulted in the extinction of many species and is further posing a lot of danger to others. The new generation are extremely cautious of the environment they are living in and dedicated in improving the condition by active volunteering. McDonalds is a very good example for many of the multinational companies as they concentrate more on to implement CSR activities without bothering of the reduction in profit. The company’s sustainable plans ie, the McDonalds CSR have enabled it to bring down the electricity and water charges. The surplus amount obtained by the company can be utilized in further campaigns. Although the sustainable plans adopted by the company have offered it many benefits, there are also some challenges which the company had to face and it needs to devise a better way to overcome this. McDonalds CSR assignments are being prepared by our online management assignment help experts from top universities which let us to provide you a reliable assignment help online service.
Attig, N. and Cleary, S. (2014). Managerial Practices and Corporate Social Responsibility. J Bus Ethics, 131(1), pp.121-136.
Bunge, J., Gasparro, A. and Kesmodel, D. (2015). McDonald’s to Curb Antibiotics in Chicken. [online] WSJ. Available at: https://www.wsj.com/articles/mcdonalds-to-curb-purchases-of-chicken-raised-with-antibiotics-1425482366 [Accessed 27 Sep. 2016].
Carroll, A. (1977). Managing corporate social responsibility. Boston: Little, Brown.
Combs, C. (2002). Experience in Collaboration McDenver at McDonald's. Journal of Physical Education, Recreation & Dance, 73(4), pp.33-35.
Conservation International. (2016). McDonald's - Conservation International. [online] Available at: https://www.conservation.org/partners/Pages/mcdonalds.aspx [Accessed 27 Sep. 2016].
Deng, T. (2009). McDonald’s New Communication Strategy on Changing Attitudes and Lifestyle.IJMS, 1(1).
Earthisland.org. (2016). Major Companies Using Palm Oil Commit to Addressing Worst Industry Abuses. But is It Enough?. [online] Available at: https://www.earthisland.org/journal/index.php/elist/eListRead/major_companies_using_palm_oil_commit_to_addressing_worst_industry_abuses._/ [Accessed 27 Sep. 2016].
EDF, (2016). McDonald's: Better Packaging. [online] Business.edf.org. Available at: https://business.edf.org/projects/featured/past-projects/better-packaging-with-mcdonalds/ [Accessed 27 Sep. 2016].
Hernández-Murillo, R. and Martinek, C. (2009). Corporate Social Responsibility Can Be Profitable. [online] Federal Reserve Bank of ST. Louis. Available at: https://www.stlouisfed.org/publications/regional-economist/april-2009/corporate-social-responsibility-can-be-profitable [Accessed 28 Sep. 2016].
Honkanen, P. and Ottar Olsen, S. (2009). Environmental and animal welfare issues in food choice.British Food Journal, 111(3), pp.293-309.
Ingenbleek, P. and Reinders, M. (2012). The Development of a Market for Sustainable Coffee in The Netherlands: Rethinking the Contribution of Fair Trade. J Bus Ethics, 113(3), pp.461-474.
Jones, B., Bowd, R. and Tench, R. (2009). Corporate irresponsibility and corporate social responsibility: competing realities. Social Responsibility Journal, 5(3), pp.300-310.
Jones, P., Hillier, D. and Comfort, D. (2014). Water stewardship and corporate sustainability: a case study of reputation management in the food and drinks industry. Journal of Public Affairs, 15(1), pp.116-126.
McDonald, (2012). CORPORATE RESPONSIBILITY and sustainability REPORT. McDonald: Thornleigh.
McDonald, (2014). The Good Business Report: 2014 McDonald’s Sustainability Update. Oak Brook: McDonald's Corporation.
Mcdonalds.ca. (2016). Sports & Sponsorships | McDonalds.ca. [online] Available at: https://www.mcdonalds.ca/ca/en/communities/sports_sponsorships.html [Accessed 27 Sep. 2016].
Merchant, H. (2014). Configurations of Governance Structure, Generic Strategy, and Firm Size: Opening the Black Box of Value Creation In International Joint Ventures. Global Strategy Journal, 4(4), pp.292-309.
Rainforest-alliance.org. (2016). Certified Sustainable Coffee Grows Rapidly as More Companies Commit to Sourcing | Rainforest Alliance. [online] Available at: https://www.rainforest-alliance.org/newsroom/press-releases/sustainable-coffee-grows [Accessed 27 Sep. 2016].
Saiplatform.org. (2016). SAI Platform - SAI Platform launches new Principles for Sustainable Beef Farming. [online] Available at: https://www.saiplatform.org/pressroom/101/33/SAI-Platform-launches-new-Principles-for-Sustainable-Beef-Farming/ [Accessed 27 Sep. 2016].
Schwartz, M. and Carroll, A. (2003). Corporate Social Responsibility: A Three-Domain Approach. Bus. Ethics Q., 13(04), pp.503-530.