McDonald’s and Chipotle: Corporate Social Responsibility

Abstract

Ethics can be applied in any profession. Basically, ethics denote a set of laws or moral systems that provide a basis for discerning whether an action is correct or erroneous. Corporate social responsibility and ethical managements cannot operate independently. Rather, they work simultaneously and are incorporated into company values and goals within a specified period of time. In the business environment, these two variables operate as a single system that interacts and overlaps within flexible limits. Therefore, activities aimed at promoting either of them must incorporate the other. McDonalds Fast Food Company and Chipotle have managed to maintain innovativeness and commitment to quality in products delivered to clients. Besides, the companies have participated in a series of corporate social responsibility activities through ethical managerial commitments. In the two organizations, ethics and corporate social responsibility have become instrumental in business sustainability initiatives. These organizations have endeavoured to activate this aspect by designing management strategies that incorporate corporate social responsibility and ethical management depending on the community of operations. These strategies are expected to merge company goals and issues such as social responsibility, sustainability, and ethics to balance financial growth and needs of the community.

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Introduction

Chipotle Restaurant

Chipotle restaurant outlets serve fast food in an attractive eating environment. The burrito brand is a household name that defines a lifestyle among loyal customers. Instead of just serving fast food, the Chipotle’s burrito is not junk food. Rather, this meal is prepared from healthy ingredients in line with the health needs of the customers. The restaurant has a series of corporate social responsibility initiatives aimed at affirming its corporate governance ethics.

McDonalds Fast Food Company

McDonalds Fast Food Company has been in operations for more than two decades. The company is known for fast food products such as burgers, hamburger, fries, and soft drinks, among others. McDonald Corporation is incorporated in the United States. It is a world leader in the fast-food industry (McDonalds Corporation, 2014). The McDonalds Company has more than 500 restaurants across the world. These restaurants are either corporations or partners. Key success factors that propel the growth of the company are quality, and affordable products served quickly. The company has stable corporate governance ethics through a comprehensive organizational ethics framework.

Theoretical models

Ethical values and human engagement

Ethical values have a positive impact on performance since they include confidentiality, rationality, good communication, high morals, respect, and promotion of equality. Basically, these elements form the strength of successful organizational culture. According to D’Amato, Henderson, and Florence (2009), positive ethical aspirations are achievable through action-oriented respect, mutual coexistence, and deeply entrenched social values, which are vital in the peaceful coexistence of all the employees. These values are readiness and inclination to jump into actions which consider the morality of the decisions in consultation with the senior personnel (D’Amato, Henderson, & Florence 2009).

For an organization to be successful, Bazerman and Moore (2009) opine that should have strong ethical principles that guide employees when carrying out their duties. The ethical code consists of laid down structures to keep staff in healthy and stable mind in their duty of serving the interests of the restaurant through regulatory, ethical communication models. These models are the motivation to acquire, bond, comprehend, and defend. Therefore, a proactive behaviour control system in an organization functions within a structured reward system (Bazerman & Moore 2009).

The levels of moral responsibility within an organization have three building blocks of learning consisting of a supportive learning environment, concrete learning processes, and practices leadership that reinforce innovation. Therefore, Porter and Mark (2006) note that an organization has to be focused on the most elevated moral models in all business exchanges to guarantee stable corporate governance ethics. Each employee must follow all pertinent laws, guidelines and regulations when performing his or her obligations. Since the system functions within accepted parameters, employees are expected to develop a self-consciousness to deliver quality services and defend the organization as part of a family unit.

Ethics and organization culture

According to Carroll and Buchholtz (2011), an ideal ethical culture in any organization should spell the rules of engagement, expected behaviour, and repercussions for misconduct. These rules appreciate diversity and uphold integrity in judgment as enshrined in the company’s vision and mission statement. In the process, cases of prejudice are minimized as diversity develops into a positive aspect of the organization. The positive relationship between favourable, effective job performance, and work environment are attributed by motivating and congenital conditions, encouraging security, comfort and safety, and prevailing physical convenience.

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Punishment policy is used to control misbehaviour and improve work performance. Individual performance of workers is a contribution to the organizational performance. Therefore, the organization should encourage understanding individual characteristics such as perceptions, personality, values, and attitude in order to help and support employees to become competent in the professions (Carroll & Buchholtz 2011).

Ethical tendencies and organizational sustainability

There are three aspects associated with the nature of organizational, professional ethical expectations. First, an organization should be made up of a proactive social system. Under this system, workers have social status, roles, and psychological behaviour expectations. Employees’ behaviours are normally influenced by the individual drive and their group pressure. There are two types of the social system, which are informal and formal. These social systems influence one another.

The second aspect is the mutual interests that exist between an organization and its workers. An organization should require its workers to achieve the objectives within the conduct of secrecy and proactive engagement. The third aspect is a discipline that adopts moral values and principles to improve and affect the operation of an organization and workers’ behaviours regarding the choices that are appropriate and inappropriate. An ethical company should have well developed moral principles that are significant for each employee to attain higher work productivity and ethical performance. According to Porter and Mark (2006), such organizations should have established internal procedures that are meant to address misconduct cases. Since most organizations endeavour to ensure that their actions and objective are ethical, it is upon each employee to remain professional, in a positive attitude, responsible, and in a healthy state of mind.

Policies and initiatives: McDonald and Chipotle

Internal ethical initiatives

The employees of the two organizations are expected to be disciplines, avoid substance abuse, observe the company ethical values, and remain proactive in inter and interpersonal communication to ensure that the objectivity of a positive moral environment is sustainable. Operating under the US ethical business codes, the employees should be aware of the consequences of unethical behaviours such as fraud, absconding duty, and irresponsible duty execution which may attract stringent penalties as stipulated in the organizations’ ethical and moral code of conduct. Each employee at the two organizations is expected to play a significant role in setting up the learning environment that observes ethical business practices. This culture is meant to create an ideal climate for innovation and communication among the employees. The team work ethics spell the rules of engagement, expected behaviour, and repercussions for misconduct. These rules appreciate diversity and uphold integrity in judgment (.

McDonald and Chipotle have strict models in regards to substance ill-use and weapons. Each employee is not allowed to utilize or have hard refreshments on organization property. In order to avoid conflict with the organizations, employees have the responsibility of observing utmost discipline in social behaviour related to use of weapons and hard liquor. In addition, employee are expected to maintain a healthy personality by avoiding illicit medications or controlled substances within the McDonald and Chipotle property or while occupied with any employment related action on behalf of the company.

It is unacceptable for the employees to report to work while high on liquor or other hard stuffs that may impair their performance and ability to reason. It is the responsibility of each employee to remain proactive in relating with other employees by avoiding physical, psychological, or social conflicts that might taint the image of the company. To help guarantee that all work performed for McDonald and Chipotle are adjusted effectively, employees are remunerated on the premise of hours worked. It is therefore the responsibility of each employee to report and record time precisely as per created employment contract. The dressing code of each employee must remain acceptable to avoid conflict and possible disciplinary action since indecency is considered by the company as an act of negligence and indiscipline.

The McDonald and Chipotle offer several self improvement courses and training to employees to ensure that personal behaviour matches with the ethical codes of the company in duty execution. Lastly, each employee should observe the tenets of ethical leadership in execution of duties at the McDonald and Chipotle. There is more to ethical leadership than the method of leading. Ethical leadership also involves the process of decision making which is dependent on heuristic since it provides assumptions, integration of options, and ethical control. Decision environment often experience dynamics and swings which create short and long term effect on chances of survival for two alternatives to solve a problem.

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External corporate social responsibility initiatives

McDonald and Chipotle have realized the need to create ideal corporate ethical governance. Therefore, the organizations have been in the forefront of sponsoring community projects. McDonald and Chipotle have also developed a joint venture with other organizations such as the health clubs and partner with them in sponsoring healthy living programs in the surrounding community. Lastly, the McDonald and Chipotle have rolled out annual campaigns on giving back to the community through sponsoring mobile health camps where free medical services are offered to the community. These campaigns are in the form of programs on education trust, health clubs, environmental conservation, and provision of social amenities (Bazerman & Moore 2009).

Circumstances that triggered the need for CSR initiatives

Addressing social based concerns through creation of shared responsibilities was the main reason for establishment of the different CSR initiatives. The companies were interested in eliminating their customers’ dependence on incentives of government and other private organizations. For instance, the ‘Get Schooled’ initiative by McDonald was informed by the need to provide a long term solution for education crisis in the US and other parts of the globe. It is a private sponsorship program which supports schools in developing infrastructure, training teachers, offering financial support to students, and leadership training.

The aim of this initiative is to guide and support youth in their career life. This initiative is run by employees of the organization. Through partnership with the Bill and Melinda Gates Foundation, the company has been in a position to provide education to disadvantages students across the globe. The initiative is supported by the ‘roadblock’ commercial that shows the power of educating the community (Heath & Palacher 2008).

Besides, the need to raise HIV/Aids awareness resulted in the creation of the Rap-It-Up Emmy Award by the Chipotle restaurant. Through this initiative, the company was able to address the social concerns in different societies as a result of the effects of HIV/Aids. The ‘Thin Line’ program aired on local channels by the company is an initiative meant to protect the youths from drug abuse. Moreover, the ‘Comedy Central’ program by the company has been active in raising environmental awareness across the globe (Porter & Mark 2006). Another CSR initiative aimed at addressing educational concerns across the globe is the ‘Kindergarten to Cap & Gown’. This initiative involves the McDonald’s employees who act as mentors to students through the formal education stages and career development (Chipotle Mexican Grill 2013; McDonalds 2012).

The Chipotle Company came up with a Fight Malaria Initiative to engage community in combating malaria. Further, it came up with an initiative to combat malnutrition and ensure safe delivery for women. It also came up with a recycling initiative for women to recycle materials to produce environmentally friendly bags. McDonald introduced ‘save water save life’ initiative in Alabama. This initiative provides clean water to the communities. Finally, McDonald organized various sporting initiatives such as cricket besides scholarship schemes in the year 2014 alone. In summary, the CSR initiatives by these companies were started to promote social cohesion and provision of support services to customers across the globe as part of their ethical corporate governance strategies.

Targeted outcome from these initiatives

The McDonald and Chipotle aim at immensely benefiting from these CSR initiatives. First, the initiatives are expected to increase the presence of the companies in various regions. Secondly, CSR initiatives are expected to enable the McDonald and Chipotle to grow their customer base rapidly and enhance customer loyalty. For instance, in regions where McDonald and Chipotle carried out several CSR initiatives, the companies expect to expand their large market share as a result of customer loyalty (Porter and Mark, 2006).

Corporate Social Responsibility gives customers confidence in the companies’ products because customers often want to be identified with products of a company which cares about their other needs. Further, the CSR initiatives are expected to improve the relationship between the companies and customers (Heath & Palacher 2008). For instance, the ‘Get Schooled’ initiative is expected to earn the trust of customers who will feel appreciated and valued by the education initiative (Chipotle Mexican Grill 2013; McDonalds 2012).

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The CSR initiatives are expected to show the strength of the companies in being able to learn and execute changes according to the needs of the markets. From this conceptualisation, the companies expect to command a competitive position by being flexible to change within the milieu of technological developments and customer trends addressed by the initiatives (Porter and Mark 2006). This is informed by the fact that success and market position falls on the paradigm of long term organizational culture. Heavy involvement in CSR activities has been always a major concern for shareholders because they view it as a conflict of interest.

Shareholders’ goal is to get a lot of returns in the form of dividends and market price of the shares. Despite this conflict of interest, the shareholders of the McDonald and Chipotle have gained from CSR initiatives through increased returns. Moreover, due to positive publicity and reputation, the market value of shares of the McDonald and Chipotle are always stable. In summary, an organization gains immensely from the CSR initiatives as they improve the profitability of the organization and increase the customer base (Porter & Mark 2006).

Managing people and financial resources to accomplish CSR goals

The McDonald and Chipotle adopted several strategies to effectively manage their people and financial resources to accomplish its CSR goals. For instance, the companies adopted a proactive partnership strategy for implementing the strategies such as the ‘Get Schooled’, ‘Comedy Central’, and ‘Rap-It-Up’. Through partnership with the Bill and Melinda Gates Foundation, the McDonald was able to successful implement the ‘Get Schooled’ initiative since the implementation process was equally shared, as the financing of the whole project (Heath & Palacher 2008).

The companies were also in a position to recruit volunteers within their human resource to further cut on the cost of implementing some of the initiatives. The engagement of employees in the CSR initiatives enabled the McDonald and Chipotle to attract and retain experienced and qualified personnel, because the staff members would naturally feel that they are a part of the organization and the community where they come from (Porter and Mark 2006). Notwithstanding, the companies have made it a policy to allocate a substantial amount of revenues for charity purposes. Since the initiatives are operated within a pre-determined budget, the companies have been able to create systematic and dynamics systems for running the initiatives concurrently.

Recommendations

At the McDonald and Chipotle, the process of making the decision should not operate independently. Rather, it should be dependent on the framework identified for the result to be easy to verify and align to the expected behaviour and actions. After the decision has been made and implemented, it should be monitored and evaluated to confirm if the choices made are right or not. Thus, if it was not the right choice then it needs to go through the ethical framework again. For instance, application of the first and the second categorical imperative would weigh the merits and demerits against a standard system of tracking the outcome. The reason why this recommendation has been made is because of the violation of some of the ethical rules, such as well-being and greatest good of the majority of people and it also violates the rights and categorical imperative in the role execution.

Human process based intervention strategies are presented as directed at making an improvement to the general state of relationships between individuals and within and among groups in an organizational set up. To attain this, a sensitive form of social responsibility testing should be done at McDonald and Chipotle to ensure that both management and employee teams remain accommodative to the basic needs of their counterparts. Therefore, the elements of moral responsibility should be dynamic to accommodate the aspect of free will in exercising moral responsibility (Bazerman & Moore 2009).

Besides, the restaurants should implement continuous ethical education. The main aim of ethic education is to create a sagacity of moral responsibility of the staff at the earliest time possible before they join the management ranks. Thus, in order to control any possible ethical dilemma, the restaurants’ culture and moral goals should be used to enforce disciple among the employees (Bazerman & Moore, 2009).

Conclusion

The two organisations have been proactive in creating an ideal corporate governance ethics through setting of ethical code of conduct and corporate social responsibly initiatives. At present, the two organizations have managed to create good relationships with the stakeholders such as employees, customer, and communities living around these establishments. The internal and external ethical initiatives have remained instrumental in sustaining operations at the restaurants.

Reference List

Bazerman, M, & Moore, D 2009, Judgment in managerial decision making, Wiley Publications: Hoboken, NJ. Web.

Carroll, A, & Buchholtz, A 2011, Business and society: ethics and stakeholder management, Cengage South-Western: Mason, Ohio. Web.

Chipotle Mexican Grill 2013, Code of conduct. Web.

D’Amato, A, Henderson, S, & Florence, S 2009, Corporate social responsibility and sustainable business: guide to leadership, task and functions. Web.

Heath, R, & Palacher, M 2008, Strategic Management in fast Food Organizations: A Public Challenge Policy, Sage Books, New York. Web.

McDonalds 2012, Code of Conduct. Web.

Porter, M, & Mark, K 2006, Strategy and society: The link between competitive advantage and corporate social responsibility. Web.

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