...Management BRIEF CONTENTS Abstract 3 1. Introduction and issue identification of the case 4 2. Analysis 7 2.1. Stakeholder analysis 7 2.1.1. Consumers 8 2.1.2. Owners, executives, employee 8 2.1.3. Other groups of stakeholders 9 2.2. CSR Analysis 9 3. Evaluations 10 3.1. Who is to blame? 10 3.2. Root cause analysis 11 3.3. Recommendations 11 4. Implication of the case for future product related complaints 12 Conclusion 15 References 16 Appendix (Case: “The coffee spill heard round the world”) 17 Abstract The Stella Awards were inspired by the Stella Liebeck case in 1992. Stella purchases McDonald’s coffee from a drive through and later received US $ 640,000 for burning herself with this coffee. The lawsuit between Stella Liebeck and McDonald’s – a huge cooperation, was one of the most controversial court cases of its time. In this paper we defined the major ethical issues, analyzed who are the stakeholders and how the stakeholders influenced this case. Furthermore, we also mentioned other complain and lawsuits which McDonald’s had to face with before 2007, which means before and after Stella’s case. Finally, we have some references and comments form McDonalds in particularly. As well as general comments about how organizations and how they make final decisions in the future when they have business ethic problem, and how they protect themselves yet keep their customers happy. 1. Introduction and issue identification of the case Let’s imagine that...
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...customers. Though the savvy manager cannot stop people from having the intention and grievances to sue the organization, they can reduce the motive of prospective plaintiffs and in event of a lawsuit happens; effective product liability management mitigates the negative effects on the organization. Management has the duty of making sure the product liability policies and programs of the organization is clear, concise and precise so that the interpretation thereof cannot be turned to work against the organization. Most lawsuits that are directed at organizations arise in the area of torts. The case of Liebeck vs. McDonalds: Relentlessly controversial in nature, this case continued to be the answer to the journalists’ prayer until it was settled. Liebeck vs. McDonalds aroused the interest of both the media and legal community and held public attention for its lifetime. Initially, the case took off like most frivolous lawsuits in which the...
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...McDonald’s Coffee Lawsuit This isn’t really a “current event” but an incident recently in my life brought this can back to mind. Last week I was attending a work paid for seminar on best practice for contracts. During this two day course we discussed contract law, regulator law and civil law, the latter brought Liebeck v. McDonald's Restaurants to mind. During the lecture the instructor brought up a case argued, Farmers Construction v. Washington State and pointed out how the ruling seemed crazy at face value. A member of the audience made a comment, “liberal Judges”. This statement started my rant that went like this. First of all a Judges political views neither are relevant in this case nor are our opinions. People at large seem to think they can, without knowing the facts decide if a lawsuit is frivolous or unfounded never mind the fact that they don’t even know what the Judge was asked by the petitioner to rule on. Take the case of Liebeck v. McDonald's Restaurants. A few years ago it was all over social media sites as a joke, “how crazy is this country when someone can sue over being burned by HOT coffee”? What they did not know was that the coffee was so hot, between 190 and 205 degrees, so hot that it was proven that the cup was weakened. And that this 81 year old lady was so severely burnt within 3 to 6 seconds of exposure that she had to undergo several skin grafts and 2 years of rehabilitation. So without facts you shouldn’t pass judgment on cases you have no...
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...The Case of Liebeck V. McDonalds Business Law & Ethics University of the People Term 4, 2017 The Case of the Really, Really Hot Coffee In 1994, 79 year old Ms. Stella Liebeck purchased some coffee from the drive through window at the local McDonalds restaurant. The coffee was heated to the usual high temperature of 88c. When Ms. Liebeck subsequently spilled her coffee on her lap and received burns on her legs and groin area. She was hospitalized for 8 days and underwent skin grafts to repair the 3rd degree burns she received. Third degree burns are significant injuries where permanent damage is done to the skin, underlying muscles and nerves. It often causes life long chronic pain in the area due to the nerve damage. Ms. Liebeck...
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...Operations, besides marketing and finance, are one basic function that every organisation performs (Heizer and Render, 2011, p.36). Thus, operations management plays a very important role in an organisation’s success or failure. Many enterprises all over the world including McDonalds are often mentioned with their case study in operations management. In spite of the fact that McDonalds provides a bank of successful studies in business, there exist several deficiencies in this giant fast-food company’s operations management strategy. This paper will discuss some deficiencies in the decisions of operations management i.e. product design and managing quality as detailed in McDonalds’ Hot Coffee Case. Products design: Among thousands of competitors on the increasingly saturate fast-food market, it is product strategy that mainly contributes to the competitive ability of a company like McDonalds. The core of product strategy is product development system. Therefore, it is reasonable to say: “The product development system may well determine not only product success but also the firm’s failure” (Heizer and Render, 2011, p.190). Going through product development stages figured as follows will help evaluate product options of McDonalds in developing the hot coffee product. Figure 1: Product development stages According to Figure 1 (adapted from Heizer and Render, 2011, Figure 5.3), initially ideas from many sources had been gathered and the ability of the company to carry...
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...McDonalds coffee and the Liebeck lawsuit •Osmond-Riba home •Elisabeth Riba home •Elisabeth Riba's Journal Writing > I've read recently that the McDonald's coffee lawsuit is back in the news again, being used as an example of frivolous lawsuits, irresponsible juries, excessive verdicts, a generally out-of-control legal system, and thus a justification for tort reform. However, after doing some research, I discovered that the case was hardly as unreasonable as people often make it out to be. I originally wrote this for Usenet several years ago; the links at the bottom of the essay may have expired. -------------------------------------------------------------------------------- McDonalds coffee and the Liebeck lawsuit Lis Riba, 2000 Here are some facts about what really happened: At the trial, it was revealed: •McDonalds required their coffee kept at 185 degrees Fahrenheit, plus or minus 5 degrees, significantly higher than other establishments. [Coffee is usually served at 135 to 140 degrees] •An expert testified that 180 degree liquids will cause full thickness burns in 2 to 7 seconds. •McDonalds knew before this accident that burn hazards exist with any foods served above 140 degrees. •McDonalds knew that its coffee would burn drinkers at the temperature they served it. •McDonalds research showed that customers consumed coffee immediately while driving. •McDonalds knew of over 700 people burned by its...
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...Risk Management 2301 Stella Liebeck VS McDonalds This case involves two parties; McDonalds and Stella Liebeck, a 79-year-old female, was sitting in the passenger seat of her grandson’s car having just purchased a cup of McDonald’s coffee. After her grandson stopped the car, she tried to hold the cup securely between her knees while removing the lid. However, the cup tipped over, spilling boiling hot coffee onto her legs. She received third-degree burns on over 16 percent of her body, this required eight days of hospital care, whirlpool treatment for debridement of her wounds, skin grafting, scarring, and disability for more than two years. Despite these horrifically extensive injuries, she asked McDonald’s to settle her hospital bills of $20,000. However, McDonald’s refused to settle, they offered her a mere fraction of the required $20,000. McDonalds offered $800. The jury awarded Liebeck $200,000 in compensatory damages, which was reduced to $160,000 because the jury found Liebeck to be twenty percent at fault and $2.7 million in punitive damages for McDonald’s callous conduct. (The judge was referring to the fact that; McDonald's revenue from coffee sales is in excess of $1.3 million a day.) The trial judge reduced the punitive damages to $480,000. Subsequently, the parties entered a post-verdict settlement. The case went on to be considered a frivolous lawsuit, which means the practice of starting or carrying on lawsuits that, due to their lack of legal merit,...
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...Individual Assignment 2: Case Study Wardell Johnson AMBA 610 Professor M. Frank Introduction It takes constant work to ensure that any given system maintains order. The universe has a natural tendency to lead to entropy “a process of degradation or running down or a trend to disorder” (Merrim-webster.com). What guides Humanity to function in a society in concert with their fellow man? It’s the ability to set up laws to govern the actions of the members of said society. According to researchers Kubasek, Brennan, & Browne (2011) great minds have always debated the purpose of laws. For instance, Plato expressed that law is a form of social control, and Aristotle posited that law is a rule conduct, an ideal of reason (Kubasek et al., 2011). No matter what ones philosophical views are in regards to legal systems whether good or bad, laws help societies maintain a sense of order, setting and maintaining a sense of normalcy, in efforts to prevent societal entropy. In America the foundation of our legal system is based on the U.S. Constitution created the nation’s founding fathers to ensure every citizen equal access to justice. Liebeck v. McDonalds and Pearson v. Chung are two highly publicize cases of Tort law. “The primary goal of tort law is to compensate the innocent persons who are injured or whose property as result of another conduct (Kubasel et al 2011, p.309). Both of these cases involve people who wanted to turn to the American legal system to obtain justice...
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...settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over burn from hot coffee. Information on the lawsuit and the settlement.. Reports on the out-of-court settlement of McDonald's Corporation with Stella Liebeck over...
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...There is a lot of hype about the McDonalds' scalding coffee case. No one is in favor of frivolous cases of outlandish results; however, it is important to understand some points that were not reported in most of the stories about the case. McDonalds coffee was not only hot, it was scalding -- capable of almost instantaneous destruction of skin, flesh and muscle. Here's the whole story. Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of her grandson's car when she was severely burned by McDonalds' coffee in February 1992. Liebeck, 79 at the time, ordered coffee that was served in a styrofoam cup at the drivethrough window of a local McDonalds. After receiving the order, the grandson pulled his car forward and stopped momentarily so that Liebeck could add cream and sugar to her coffee. (Critics of civil justice, who have pounced on this case, often charge that Liebeck was driving the car or that the vehicle was in motion when she spilled the coffee; neither is true.) Liebeck placed the cup between her knees and attempted to remove the plastic lid from the cup. As she removed the lid, the entire contents of the cup spilled into her lap. The sweatpants Liebeck was wearing absorbed the coffee and held it next to her skin. A vascular surgeon determined that Liebeck suffered full thickness burns (or third-degree burns) over 6 percent of her body, including her inner thighs, perineum, buttocks, and genital and groin areas. She was hospitalized for eight days...
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...Frivolous Lawsuits: A Comparison of the McDonalds Case and the Pearson Case Michelle DeWald University of Maryland University College Introduction “When there are too many policemen, there can be no liberty. When there are too many soldiers, there can be no peace. Where there are too many lawyers, there can be no justice.” - Lin Yu-Tang Chinese Writer and Inventor Suing companies in hopes of accumulating big money is popular in today’s society. However, many people get immensely creative with their claims, creating lawsuits over ludicrous motivations. Many cases endure for years or longer. Nevertheless, the costs involved in defending a claim can be exorbitant. Unfortunately, despite every precaution, we live in a society where anyone, any business can be sued for anything. Solely because a lawsuit has been filed, however, does not mean the case has merit. This paper discusses two legal cases related to frivolous lawsuits. The first lawsuit was filed against the McDonald’s Corporation by Stella Liebeck in 1994. The second lawsuit was filed against Custom Cleaners by Roy L. Pearson, an administrative judge, in 2007. Both cases are notable and played a major role in guiding small and large companies in their responsibilities to their customers, reducing the risk of litigation, and protecting their assets to avoid unnecessary liability. Both cases will be analyzed by comparing and contrasting the facts, law, and merit. In addition, this paper will examine ethical issues...
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...Jerome Fulton, Jr. BUL 4310 Liebeck v McDonald’s Restaurants July 7th, 2014 Introduction Corporate giants are known for their strong legal defense teams, their shrewd business practices, and their strong presence in politics. In the United States, its adversarial court system allows corporate giants to have the upper hand when faced with litigation. In an adversarial court system, the stronger the defense (lawyers) is, the stronger the case. One extreme case in the American court system that deflects corporate giants’ upper hand in the United States’ adversarial system, is a 1994 “frivolous lawsuit,” Liebeck v. McDonald’s Restaurant. McDonald’s is known for its fast-food and joy that it brings to children with its Happy Meals. However, in the Liebeck v. McDonald’s Restaurant case, McDonald’s was known as an inconsiderate corporate giant whose nonchalance cost McDonald’s nearly $3 million. Liebeck v. McDonald’s Restaurant is a case that was a media train in the 1990s and misconceptions about the case filled the airways. Case Overview Why should your favorite quick service restaurant be responsible for serving your favorite breakfast beverage, coffee, just how you like it? Liebeck v. McDonald’s Restaurant involved a then 79 year-old, Stella Liebeck, who purchased a cup of coffee from a McDonald’s located in Albuquerque, New Mexico, in 1992 (“McDonald’s,” 2002). “Liebeck tried to hold the cup of coffee between her knees while removing the lid; however, the cup tipped...
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...INTRODUCTION Law or rules can be defined and assessed in a variety of ways, but is more commonly known to us, the judiciary, “as the rules that society is bound to obey.”[1] These so-called “rules” or laws include government-made rules called “legislation” and judge-made rules called “Common Law” that are respected and enforced by our governments and our courts. Whether we speak in terms of Civil or Common Law traditions, certain characteristics can generally be said to apply to each in a common manner. These characteristics describe laws as being general and impersonal, obligatory, coercive and non retroactive.[2] We may attempt to summarize this notion by stating that law, no matter its origin, applies equally to each and every individual or citizen in a given society at a given time. Seemingly easy to understand, we must not fool ourselves to think that law is simple by nature. It is filled with nuances, definitions, interpretations, jurisdictions that often warrant separate applications to different people, thus challenging the very foundation of the above mentioned guiding principles. One legal principle that seems to fall within this general predicament is that of retribution and compensation. The idea is that when an individual or entity causes harm or damage to another, the former is obliged to restitute and compensate the latter for the damages that were caused. For example, in civil law, article 1457 of the Quebec Civil Code[3] states clearly that “where...
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...Sandra Carlson Business Law 3321 421 U.S. 809 Bigelow v. Virginia Facts: Jeffrey C. Bigelow was the managing editor for The Virginia Weekly, a newspaper which was published in Charlottesville, Virginia. He was charged with violating Virginia law on May 13, 1971, after printing an advertisement for a New York City agency that helped women arrange for, finance and obtain abortions. The ad print was as follows: UNWANTED PREGNANCY LET US HELP YOU Abortions are now legal in New York. There are no residency requirements. FOR IMMEDIATE PLACEMENT IN ACCREDITED HOSPITALS AND CLINICS AT LOW COST Contact WOMEN's PAVILION 515 Madison Avenue New York, N.Y. 10022 or call any time (212) 371-6670 or (212) 371-6650 AVAILABLE 7 DAYS A WEEK STRICTLY CONFIDENTIAL. We will make all arrangements for you and help you with information and counseling. 1 Specifically, Mr. Bigelow was charged with violating Va. Code Ann. § 18.1-63 (1960). The statute made it a misdemeanor to encourage or prompt the processing of an abortion "by publication, lecture, advertisement, or by the sale or circulation of any publication, or in any other manner, encourage or prompt the procuring of abortion or miscarriage". Mr. Bigelow was tried and convicted in Albemarle County Court. He appealed to the Albemarle County Circuit Court, where he was granted a de novo trial. De Novo is Latin for ‘new beginning’, so a de novo trial is a completely new trial. Typically, a trial de novo is ordered by...
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...INTRODUCTION The reason how McDonalds Restaurant became a well-established brand around the world began with the series of strategies they used throughout the years in building its success. From the beginning there was only a local food stand more like the food trucks on the streets now to becoming the multi-billion corporation with over a billion employees. The way McDonalds is able to penetrate through different markets around the world is very amazing because they may be the only fast food brand that could be found around the world with the possibility of finding one just at a corner near you. The brand is well known around the world yet they may only know the name and that it is a fast food restaurant. Yet different countries or cities may have discrepancies in menu engineering where the company accommodates to the food preferences of the people or the culture of the regions. As many may know, operating a hospitality establishment requires much effort to maintain and operate while the failure rate of restaurants are statistically calculated to be quite high. As discussed by the “RestaurantOwners” website, “Within a 90 percent confidence interval, CRG found that the first year failure rate for startups averaged 23 percent over four years in that market. Based on the study, you could say that there is a one in four chance a new startup will fail.” Nonetheless all company may have there ups and downs while the McDonalds Restaurants brand reign in the fast food market for...
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