Project Report:

Business Unethical Case Analysis

Case: McDonald’s, “Unhealthy Ingredients”

Instructor: Ms. Sokkea Hoy

Course: Business Ethic – BUS 330

Members: Sovanna Suos < ssuos@zamanu.edu.kh>

Vannapha Huy <vhuy@zamanu.edu.kh>

Techly Seng <tseng@zamanu.edu.kh>

Ty Chea <tchea@zamanu.edu.kh>

Report Content:

I. Introduction Define ethics, ethics in business and the important of ethics in business context

II. Background of the business Introduce to McDonald’s

III. Case Outline The case of unhealthy ingredients

IV. Stakeholder (Direct and

indirect)

The people affected by the issue directly and indirectly

V. Key Ethical Issue Consequences from this issue

VI. Ethical Analysis Ethical analysis on alternative reasons behind the occurrence of the issue

VII. Recommendation Our comments and suggestions to McDonald’s , the US government and consumers

I. Introduction:

Ethics is generally known as a system of moral principle that affects how people make decisions.

Ethics is also concerned what is good for individuals and society, like as, how people live a good

life, what are people’s rights and responsibilities, who define the language of right and wrong,

and what is thought to be good or bad. Ethics in business refers to an application of a moral

principle of conduct to the strategic and operational management of a business. For the today

business, ethics is prioritized as one among the main factor during the decision-making process.

Businesses that can maintain a high ethical point usually can benefit from its own acts and

creates satisfaction to both internal and external stakeholders. Ethical viewpoints continue to

change over time as people interact with different society contexts such as people, time and

rules. For business, ethics is important for sustain growth because it maintains profits in the long-

term.

II. Background of the business:

Originally, this restaurant served only hot dogs, hamburgers, cheeseburgers, milkshakes, and the

pre-1960s type of French fries. Today's menu includes numerous other items that have been

added through the years such as chicken, fish, salads, snack, coffee and desserts. Now this

restaurant is the world's leading global foodservice retailer with over 36,000 locations serving

approximately 69 million customers in over 100 countries each day. More than 80% of

restaurants worldwide are owned and operated by independent local business men and women.

The true vision of this company is to offer best experience to the customer, this company is

focusing on creating a better tasting, high-quality food to their customer and providing the

world-class experience that makes the customer feel warmly welcome and comfortable. This

company is McDonald’s.

III. Case Outline:

The corporation food is unhealthy for consumers. They use many harmful ingredients and

chemical such as acrylamide, azodicarbonamide, sodium acid pyrophosphate and

dimethylpolysiloxane which are banned by many nations. They also use genetics modified

ingredients which are hard to trace (Gibison). For instances, in Japan, McDonald’s apple pies

were found contain food coloring agent which is banned in Japan. There are also controversy

issues happened to motherland of McDonald in the United States, a woman went McDonald’s

with her child found out that there was a rat in her salad.

IV. Stakeholders (Direct and indirect)

Stakeholders are the people who got directly and indirectly effected by the outcome of a

decision.

1. McDonald’s Company

2. Consumers

3. Consumer’s family

4. Communities

5. U.S Government

6. Competitors

7. Companies in the same industry

8. Other companies (companies which McDonald’s consumers work for)

V. Key ethical issues

The unethical case is concerned with unethical ingredients. McDonald’s foods contain too many

calories and not enough nutrition such as large amounts of added sugar, unhealthy fats and is

highly processed; which directly effects on consumers’ overall health. When these foods become

the diet for people the possibility consequence includes poor health, overweight and obesity. The

issues do not stop here; being overweight can lead to heart disease, diabetes, and stroke. He will

have to quit work. His family will have less income and saving. However, their spending is

higher. They will have to make time to look after him and spend money to provide him a good

treatment. His children may also have to enter labor force early to support the family. Thus, he

becomes a burden.

When more and more consumers have heart disease, stroke or diabetes, indirectly, the companies

in same the industry are losing their customers because more people might start to feel insure

toward fast foods consumption and thus switch from fast foods. As a result, the industry will

become less dynamic, and companies within the industry will make less profit so they may start

to consider eliminating their staff’s numbers. This will increase the unemployment rate for the

nation.

Additionally, when the individual citizens cannot work, the communities, companies and US

society as a whole also get hit. Let imagine, if a citizen gets diabetes and can no longer work.

Then, his company is losing good employees. Thereby, for the communities and the US society,

the nation’s GDP, Income, welfare, happiness and healthiness rate will be all lowering. As

identified by the Centers for Disease Control and Prevention, the expense on obesity-related

medical costs was $147 billion and $69 billion was responsible for losing productivity caused

from this disease, in the year 2008.

VI. Ethical analysis

To decide if the actions were moral, we need to think about the purposes of McDonald’s. If the

purpose is to make more money by making people well-being at risk for profit, it is immoral. If

the corporation’s purpose is to make food affordable for everyone by selling cheap food, then the

company may not be immoral. That would be more about having a bad solution decision than

greedy purpose towards the customers. In an official way, we do not know the real purpose of

the corporation, we think it would be hard to make a conclusion in either way. Subjecting to this,

the moral concern would also be changed.

In addition, people perceive situations differently and thus, there are many discussions about the

definition of ethic and ethical issues. All practitioners do not have one common definition of the

topic. Thereby, It would be useful to base our analysis on the well recognize ethical framework.

According to Business Ethics Book by Laura, Joseph and Chris, there are three models that can

be used to explain if the acts involve in morality: deontology, utilitarianism and virtue ethics.

Utilitarian people make decisions that produce better consequences than alternatives. Examples

of better consequences that promotes human well-being: the happiness, health, dignity and more.

A decision that supports greatest good for a maximum number of people is the best decision. The

utilitarian perspective would find this unethical whether McDonald’s had the good purpose or

not. This is due to the negative consequence, the public health issues. The corporation does not

provide safety food to customers, society and increase public health issues. It is immoral for any

business to serve a product or service that may cause harm. Their food is at the expense of the

society’s health and welfare. The corporation is clearly at fault for the responsibility of

producing and maintaining a safe product to their customers.

However, the deontological perspective might not agree. Deontology begins with the insight that

as a matter of principle, we should make some ethical decisions rather than consequences even if

it results in some bad consequences. If the means was really to help customers can afford by

selling the cheap food, then the act of serving the food would be moral. If the means was to serve

no quality food to make people ill, than it would be unethical.

On the other hand, virtue ethics depends more on integrity and character of a person who is

making the decision. It shifts the focus from questions who the person is about, not what a

person should do to. It gives us a different view of ethics. The managements and the marketing

and sale department create a new advertisement to capture children as a new segment. Of course,

employees are responsible for maximizing profit for their company, yet, according to virtue

ethics, they are not moral of doing so. They did not act of what should have to be done, integrity,

to protect children from being fooled by cool lies and a risk of getting overweight.

VII. Recommendations

The following recommendations are offered for McDonald’s Company:

Give that the cooperation operating in food industry, food safety should be integrated

into the company credo, value statement and code of conduct. It never be ethical

enough to make profits at the expense of consumers’ health.

While the current products causes health issues, the cooperation should reevaluate

their ingredients’ quality. Further, they should take actions to contribute in solving

this problem by practicing CSR social web model. Introducing more healthy safe

foods and calories count in menus and sponsoring medical researches related to heart

disease, stroke and diabetes would be highly recommended.

Recommendations for governments:

The government should encourage and enforce on a legislation and quality

control of ingredients used in food products.

Limit advertisements that target children under 12 years old

Recommendations for consumers:

Consumers should be health conscious, manage their diets by balancing

healthy food and do more exercises, for example, buying fresh vegetable and

meat from the fresh-markets and self-cooking at home.

-END-

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