McDonald’s Corporation’s Business Ethics

Abstract

Business ethics is a significant field that has been studied for several decades. It features questionable topics, including the role of ethics in the decision-making process of organisations. This paper aims at addressing some of the issues related to business ethics on the example of McDonald’s, a large provider of food services. The report presents the theoretical framework for the research, discusses the selected methodology and the rationale for it, and outlines the company’s values and regulations related to business ethics. Moreover, the paper features the analysis and discussion sections that provide insight into the significance of findings and the ways they can be used to improve the field. The goal of the report is to discuss the principles of business ethics using the example of McDonald’s and evaluating how the firm’s business ethics relate to its values and aims. Moreover, the paper is designed to explain how the selected firm’s example can be significant for other organisations.

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Introduction

Business ethics is a highly significant issue, as it may guide the choices, values, and strategies of a company and its employees. In today’s world, this issue is a significant one, as many of organisations’ decisions are related to the question of ethics. Every day, firms’ authorities decide how they want to manage competition on the market, support diversity in the workplace, and interact with their partners and stakeholders. The goal of the presented paper is to assess how the principles of business ethics can be incorporated into a company’s operations on the example of McDonald’s. Moreover, the report aims at investigating whether the firm’s business ethics comply with its values and goals, and how its example is significant for other organisations. The research project is designed to provide insight into the theoretical framework related to the studied concept and address it from the perspective of a single company. The paper concludes by discussing the link between the values McDonald’s has and the business ethics it displays.

Theoretical Framework and Topic Statement

Before starting to analyse the issue this paper studies, it is crucial to describe the context of the research and define the meaning of business ethics, presenting valuable information about this field. In general, one can understand it as the study of practices and policies associated with the corporate social responsibility, insider training, governance within an organisation, and bribery. Horton (2019) notes that business ethics compose a system of ethical and moral beliefs associated with the values a company may have, along with its choices, work strategies, and its employees’ behaviours. Chell, Spence, Perrini, and Harris (2016) report that, in simple terms, business ethics can be defined as the moral rules organisations utilise daily. It means that the field focuses on the ethical problems and issues that may arise in the business environment.

There are questions that can be considered highly important for the field of business ethics. The first one of them is: How significant is ethics in business? This question may not have a particular answer due to the following issues. On the one hand, companies are always in a state of competition, which means that they are focused on designing the most effective strategies, not the most ethical ones. This perspective implies that organisations working under this perspective do not intend to act ethically, as their goal is to gain profit; thus, business ethics should not be the primary concern of the firms. On the other hand, one may say that appropriate business ethics allow for healthy competition and can possibly improve the relationships between companies, their stakeholders, and potential clients.

An alternative answer to the question is that business ethics are not significant because companies should comply with the law and are not obliged to behave ethically. However, firms cannot act illegally under any circumstances, which means that even if they do not intend to make ethical decisions, they should avoid making unethical choices prohibited by law. Some of the ethical requirements are codified into law; they include the minimum wage, possible regulations associated with the environment, and issues associated with collusion and trade (Horton, 2019). Thus, organisations cannot ignore some of the ethical necessities, such as paying wages to the employees.

Another question significant for the field of business ethics is: How can the ethical decision-making process within a company be characterised? It is crucial to answer this question because organisations’ business ethics depend on the criteria of ethical principles (Lindebaum, Geddes, & Gabriel, 2017). For instance, a company may make their decision-making processes ethical by aiming at acting morally and universalising their strategies (Small & Lew, 2019). The third question significant for business ethics is: Can business ethics be different depending on the industry, or should they be the same for all organisations? This question should be answered because companies’ decisions and strategies may be considered ethical or unethical depending on the field they work in, their clients, and goals.

Finally, another question pertinent to business ethics is: How significant it is for companies to contribute to the communities they serve? Crane and Matten (2010) report that organisations, depending on the level of their responsibility and the sector they work in, may be responsible to their stakeholders or to their followers or donors. For instance, government agencies’ business ethics may include mitigating the questions of corruption, conflicts of interest, and unfair deployment of resources. However, it may be unclear whether all companies, including the public ones, are obliged to contribute to the local communities and to what extent they should dedicate their efforts to serve others. This question can be considered a rhetoric one, as, especially for privately-owned organisations, there is no single answer to it.

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The presented questions are among the many issues the field of business ethics studies. They reveal that the concept of ethics, in general, is a complex one, as it can be viewed from several perspectives. As mentioned above, this research project aims at providing an insight into how business ethics can be incorporated into the operations of a single company. The organisation selected for the analysis is McDonald’s, one of the leading food service brands (McDonald’s, 2020). Currently, the company operates in more than 100 countries with more than 35,000 restaurants worldwide. It may be suggested that such a large organisation may have many competitors working in the same field, as well as a significant number of staff. Thus, studying the business ethics McDonald’s incorporates in its operations and relationships with customers, employees, and stakeholders is crucial because it can offer an understanding of the significance and aspects of ethical issues in business.

Methodology

The methodology utilised for the paper has been selected according to the primary objective of the report, which is answering the posed questions about the business ethics used in McDonald’s. The qualitative approach has been chosen to achieve this goal. The rationale for it is that it is crucial to collect and summarise the information about the company’s policies, values, and business strategies to identify how it incorporates the principles of business ethics. Moreover, such an approach is crucial for analysing whether the organisation’s ethics comply with its values. The report does not present an empirical project, as its objectives focus on addressing the available data about the company, not the real-life experiences its employees have. Thus, the primary method utilised for the project is the literature review that includes both academic sources and the official documents of McDonald’s available online.

Results

To answer the questions this research poses, the data from academic and online sources were used. The company’s official documents presented the greatest part of the information, while the academic sources were used for the interpretation of the findings. The analysis of the results is presented in the following section. However, before evaluating the organisation’s business ethics, it is crucial to address the claims McDonald’s presents in its official documents.

Company’s Values

The values McDonald’s’ has include operating the business ethically, providing sustainable profitable growth for the company’s stakeholders, and improving the firm’s communities (McDonald’s Creative Services, 2019). Moreover, the organisation focuses on improving customers’ experience by providing high-quality products and services and a welcoming environment for an appropriate value. Finally, one of the values McDonald’s has is being committed to its employees, building a diverse team of well-trained workers, fostering respect, and ensuring a high level of employee engagement (McDonald’s Creative Services, 2019). The authorities of the organisation believe that it is crucial to comply with laws and regulations while considering ethical responsibilities, too.

Organisation’s Standards of Business Conduct and Code of Conduct

The company has the Standards of Business Conduct that feature its ethical and legal obligations. McDonald’s Creative Services (2019) report that these standards do not address all of the possible ethical issues that may arise; they are designed to provide guidance to the firm’s employees. The rules of business conduct apply to all the company’s employees worldwide, along with its subsidiaries. Moreover, McDonald’s has the Code of Conduct for its authorities and suppliers; the document aims at protecting the brand’s values and ensuring the compliance with ethical workplace standards among all stakeholders of the firm. The Code of Conduct addresses the values McDonald’s has and states that the organisation strives to build partnerships based on collaboration, transparency, and mutual respect (McDonald’s, 2012).

Working with Suppliers

There are several ethical principles McDonald’s utilises in its operations and expects its suppliers to do so, too. For instance, the company adheres to the UN Declaration of Human Rights, stating that its employees and suppliers are expected to follow some of the significant labour practices. They include supporting the freedom of association, employing individuals that are authorised to work legally, not using any form of forced or involuntary labour, and maintaining a discrimination-free environment (McDonald’s, 2012). Moreover, the company’s suppliers should treat their workers with dignity and respect, provide them with appropriate working schedule, avoid utilising underage labour, and provide lawful wages to their employees.

Supporting Inclusion and Diversity

The organisation is committed to supporting diversity, inclusion, and equal opportunities for all of its workers, which is also a part of its business ethics. McDonald’s (2012) reports that it respects the unique traits each of its employees has and believes that its diverse working environment can build trust-based relationships with its partners and customers. The company’s Standards of Business Conduct states that the firm should offer equal employment opportunities for all current and future workers regardless of their sex, gender, origin, race, age, and military or veteran statuses. McDonald’s (2012) states that it applies such a policy to all of its decisions related to employment, including hiring and promotion, development and training, and benefits and termination. Along with diversity and inclusion, the company strives to offer a safe working environment by requiring its employees to report possible unsafe practices, conditions, and accidents. Moreover, the organisation aims at eliminating possible cases of harassment, physical or verbal abuse and violence, and intimidation (McDonald’s Creative Services, 2019). The firm’s Standards of Business Conduct are designed to protect workers from offensive, hostile or intimidating actions.

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Valuing Positive Employee Experiences

As mentioned above, one of the company’s values includes focusing on positive employee experiences. Therefore, the business ethics of McDonald’s include protection against retaliation for its employees. The organisation states that filling knowingly false reports, submitting the ones intended to threaten a worker’s reputation, and taking actions against other team members may result in disciplinary actions (McDonald’s Creative Services, 2019). The company adds that one of the presented actions may also lead to the termination of the contract.

Supporting Business Integrity

The business ethics of McDonald’s also include supporting business integrity and environmental management. The organisation aims at minimising the environmental impact of its operations, focusing on appropriate water disposal and use, air emissions, and greenhouse gas emissions (McDonald’s, 2012). From the perspective of business integrity, the firm ensures its employees, stakeholders, and suppliers’ compliance with the existing laws and regulations, including the local ones. It also strives to maintain the confidentiality of its workers and partners’ data and offers whistleblower protection measures (McDonald’s, 2012).

The latter point is highly significant for McDonald’s, based on the company’s Standards of Business Conduct. For instance, the organisation has strict regulations regarding the utilisation and collection of customer information, along with franchisee personal data. McDonald’s prohibits its employees from using sensitive information if they are not authorised to do so, as well as in cases when their actions do not have legitimate reasons (McDonald’s Creative Services, 2019). The company states that there are legal penalties for employees or stakeholders for the unauthorised utilisation of personal data.

Addressing Conflicts of Interest

The company’s business ethics also includes focusing on conflicts of interest, which may arise when an employee has a financial or personal interest interfering with the interests of McDonald’s. The firm’s Standards of Business Conduct address the need to disclose possible business dealings between workers and their relatives or friends (McDonald’s Creative Services, 2019). Moreover, the company aims at eliminating possible nepotism, dating between employees, and fraternisation. Finally, it is crucial to mention that the company does not pay, seek, or accept bribes and improper payments (McDonald’s Creative Services, 2019). The organisation prohibits its employees from offering and accepting gifts that are excessive in value, inconsistent with customary business practices, violate laws or regulations, and can be considered as a bribe. The company’s strict rules about bribery are a significant part of its business ethics.

Competition and Trade

McDonald’s operate on the competitive market, which affects its decisions significantly. However, the company’s business ethics involve fair competition and ethical trade practices. The organization reports that it complies with international antitrust and fair competition laws intended to protect consumers and ensure that competitors act ethically (McDonald’s Creative Services, 2019). McDonald’s avoids engaging in formal or informal agreements with other firms that may set or control prices, market share, and distribution practices. The organisation’s authorities also refuse to collaborate with competitors to allocate products or services (McDonald’s Creative Services, 2019). Thus, the company supports fair competition and does not engage in practices that may put it at risk.

Notably, McDonald’s has a set of rules its employees or stakeholders should follow while working on its behalf. The organisation reports that it respects the rights of its suppliers and other firms operating in the same field (McDonald’s Creative Services, 2019). As a result, it chooses to gain competitive advantages through fair marketing strategies, a high quality of products and services, and superior research. McDonald’s’ Standards of Business Conduct state that the company does not engage in questionable or unethical business practices (McDonald’s Creative Services, 2019). Thus, the organisation prohibits the disclosure of sensitive information about workers, partners, or competitors, stealing of trade secret information, and the use of illegal or unethical methods to gain data about other firms.

Discussion

The findings of the study reveal that McDonald’s is a large corporation that is focused on acting ethically. All of its values are related to the field of business ethics, as the organisation is concerned about improving customer experiences, sustainable growth, building a diverse team, and fostering respect within its workforces. McDonald’s seems to be one of the companies that aim at making ethical decisions even if they can result in less profit than non-ethical ones. For instance, the company does not focus on hiring people of a particular age or professional experience specifically and provides equal opportunities for all individuals working in the company, as well as potential candidates. Thus, it is possible to say that the organisation’s values correspond with its business ethics.

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McDonald’s incorporates the principles of business ethics into its operations by outlining the fields in which its decisions can be morally-driven. The Standards of Business Conduct that guide the company’s actions address many situations to which the organisation can apply ethical decision making. Notably, the firm’s system of moral believes and values involves interact with competitors ethically, too. The company shows that communicating with all stakeholders in an appropriate and socially accepted manner is crucial for any business.

The findings of the analysis are significant because they provide the examples of the areas in which companies many apply the principles of business ethics. The results of the investigation reveal that the majority of actions and operations corporations manage daily may be either ethical or not; they are not neutral. The example of McDonald’s is vital because the company addresses all of these issues in its Standards of Business Conduct. It discusses the principles it uses to hire individuals, build diverse teams, collaborate with suppliers, improve customer experience, manage possible challenges, and establish a safe environment for employees and clients. The organisation shows that even the firms with thousands of staff members worldwide can choose to act ethically in all areas of their business decisions.

It is crucial to mention that the business ethics McDonald’s shows correspond to the ethical strategies presented in the literature on the topic. For instance, McMurrian and Matulich (2016) report that, like in the case of McDonald’s, appropriate business ethics can lead to increased competitive advantages of a firm. As a result, organisations may enjoy a higher level of commitment among employees, quality of products, and customer loyalty. Winston (2018) shows that supporting diversity and integrity, like the analysed firm does, is crucial both for the development of the business and for improvement in business ethics. Thus, it is evident that the ethical decisions and principles McDonald’s uses are crucial and can serve as a positive example for other organisations.

Recommendations

Based on the findings of the paper and the analysis of the obtained data, the following recommendations can be made to improve the field of business ethics. First, the research reveals that it is necessary to address the questions pertinent to ethics presented above. To enhance the field of business ethics and make it more available and understandable for the public, researchers should discuss the significance of ethics in business and connect this topic with the broader ones. Ethical issues arise not only in companies like McDonald’s, but in other ones, too, including healthcare facilities and educational institutions. By linking the questions of ethics arising in different field, researchers can improve the understanding of the significance of business ethics. As a result, with time, firms’ authorities will be able to decide whether ethical and moral decision making are significant parts of their business strategies and, consequently, develop related policies they can incorporate.

Second, another recommendation improving the field of business ethics is that it is crucial to outline universal concepts pertinent to the topic and contrast them with the ones unique for different areas of business. For example, companies operating in the retail sector may have particular codes of ethics, while organisations providing other types of services can focus on other business ethics. If the differences between concepts are defined, it may be easier for firms to develop universal strategies related to cooperation, interaction with employees and partners, and fostering diversity. As a result, more companies will be able to engage in a fair competition, make their actions and operations sustainable, and improve their public image, in general.

Finally, it is crucial to add that it may be important to answer the questions related to companies’ responsibilities to contribute to the communities, which was discussed above. Currently, the organisations are not obliged to interact with the population and provide sources to it, unless they work in the public sector. Although this action may not change the field of business ethics altogether, it can enhance the perspectives of ethics among companies. The reason for it is that if more enterprises start understanding the level of responsibility they may have, more individuals can receive benefits from them. As a result, companies can start improving the life of society by acting morally and ethically. However, it is possible to say that such a strategy may not be applied in today’s world because, as mentioned above, organisations are limited by laws but there are no other regulations that can force them to change their decision-making processes and operations, in general.

Conclusion

The analysis reveals that the field of business ethics is a complex one, as it is related to moral and ethical issues, which companies encounter in their operations daily. The paper presents the analysis of McDonald’s, one of the largest organisations providing food services. The company is exemplary from the perspectives of business ethics, as it has a well-develop set of rules and regulations related to ethical questions. McDonald’s had clearly defined values, including the focus on improving customer experiences, providing employees with a safe and welcoming environment, fostering diversity and integrity, and improving the firm’s communities.

The organisation’s values correspond to the strategies related to business ethics it utilises. In its Standards of Business Conduct and Code of Conduct, the company presents the way it communicates and collaborates with suppliers and partners, as well as supports inclusion and business integrity. Moreover, the organisation has a set of rules and recommendations regarding addressing conflicts of interest, competition, and trade. It is evident that McDonald’s values ethical decision-making processes and strives to operate sustainably.

The recommendations that can be drawn from the findings include the need to addressing the significance of ethical questions in business and connecting this issue with related ones. It means that, to understand the role of business ethics, one should study the importance of ethics in other fields. Moreover, it is vital to distinguish between universal and unique characteristics of ethics in business. This way, companies may improve their strategies to make moral decisions, cooperate with each other, and interact with their customers and partners.

References

Chell, E., Spence, L. J., Perrini, F., & Harris, J. D. (2016). Social entrepreneurship and business ethics: Does social equal ethical? Journal of Business Ethics, 133(4), 619-625.

Crane, A., & Matten, D. (2010). Business ethics: Managing corporate citizenship and sustainability in the age of globalization (3rd ed.). Oxford, England: Oxford University Press.

Horton, M. (2019). The importance of business ethics. Retrieved from www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp

Lindebaum, D., Geddes, D., & Gabriel, Y. (2017). Moral emotions and ethics in organisations: Introduction to the special issue. Journal of Business Ethics, 141(4), 645-656.

McDonald’s Creative Services. (2019). Standards of Business Conduct. Web.

McDonald’s. (2012). McDonald’s Supplier Code of Conduct. Web.

McDonald’s. (2020). About us. Web.

McMurrian, R. C., & Matulich, E. (2016). Building customer value and profitability with business ethics. Journal of Business & Economics Research (JBER), 14(3), 83-90.

Small, C., & Lew, C. (2019). Mindfulness, moral reasoning and responsibility: Towards virtue in ethical decision-making. Journal of Business Ethics, 2019. Web.

Winston, M. (2018). The integrity of information: Diversity and ethical decision making. Journal of Information Ethics, 27(1), 43-58.

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