The Business ethic of KFC and McDonald

TABLE OF CONTENTS

The Business ethic of KFC and McDonald 1 Executive Summary 3 1 Introduction 3 2 Comparation of KFC and McDonald’s practices 4 3 Application of 4 relevant ethical theories 6 3.1 The utilitarian approach 6 3.2 The rights ethical approach 7 3.3 The Justice ethical approach 7 3.4 The virtue approach 8 Conclusion 8 References 9

Executive Summary

A company has its responsibilities to its consumers, its suppliers, its employees , its shareholders as well as the local community and society in general .This article I choose KFC and McDonald’s which both are Food and Beverage industry to analyse the business ethics base on ethical theories . Business ethics means the application of ethical standards to the business behaviors . Business ethics has become an increasingly important part of this global conscience .(Freyne, 2009 ;Gilmartin, 2008)

1 Introduction

Kentucky Fried Chicken ,as know as KFC, is the famous American chain fast food restaurant which was founded in 1952 by Colonel Harland Sanders .And He is also the logo of KFC . KFC is affiliated with Yum brands now and formed a strategic alliance with Pepsi , (some exceptions, such as South Korea, Japan sales Coca-Cola.) There were about 17000 stores by the end of 2012 . Like KFC ,McDonald’s Plaza is also the world famous chain fast food Corporation which founded in Oakbrook,Illinois 1954.It has thirty thousand stores approximately around the world .Its main products are humburgs, fried chicken, aerated water, salad and so on. It stand for a kind of American life style in many counties .

2 Comparation of KFC and McDonald’s practices

These two companies are the world's most influential brand of fast food . Because they are competitors to each other ,they formed different strategies and concepts . As one of Marketing mix strategy , McDonald’s pricing according to the consumer perception of consumer perceived value ;KFC pricing refers to competitors’ price , the purpose lies in the market competition .The operation principle of KFC is launch new products constantly or redesign old products for consumer’s new taste .To McDonald’s ,only 4 words: clean, fast, quality, service ,every word has its detailed explanation and rules. In terms of these two aspects , I'm more inclined to McDonald’s . But they also got some events violate consumer rights and interests which happened in recent years . For example:On July 4, 2010, US media reported that McDonald's chicken McNuggets, containing mud glue and chemical composition of oil or namely polydimethylsiloxane and TBHQ . In July 2011, the event of Kentucky Fried chicken used soybean milk powder to make soya-bean milk caused many dissatisfaction .

Table 1: [pic] Table 2 [pic]

Source:“2013 world most ethical companies” http://ethisphere.com/worlds-most-ethical/wme-honorees/

From the table 1 and 2 , We get know that KFC and McDonald’s did’t Included in the 2013 world most ethical companies .

3 Application of 4 relevant ethical theories

Analysis of these two corporations will use 4 relevant ethical theories , they are utilitarian approach , rights ethical approach, Justice ethical approach and virtue approach .

3.1 The utilitarian approach

Utilitarianism, namely the utilitarian is a theory of moral philosophy .Advocating the pursuit of "Maximum Happiness” .Main philosopher are John Stuart Mill (John Stuart Mill), Jeremy Bentham (Jeremy Bentham) and so on . The utilitarian approach means that promoting the most value of the whole while reducing the harm to fewest individual by using ethical actions .It is almost the oldest ethical theory . Different from general ethics, utilitarian don't consider the personal behavior motive and means, only consider a behavior of results on the influence of the maximum Happiness. It consider that happiness and pain can be conversion ,pain is the minus happiness. Organization can use it to ensure the maximum profit of stakeholders. In China ，McDonald’s has two times rise in price in recent years .The first time was in early 2012, McDonald's has announced that there will be a adjustment of McDonald's restaurants all over the country of the some food prices, the range of the price adjustment is in the 0.5 to 2 yuan , involving the staple food, beverage and sweets and so on since January 12, 2012. McDonald's said, "rise in price is because of the cost of the food and other structural continues to grow." The second time is On May 13, 2012 , It rised the price of Cheese and egg McMuffin package from 6 yuan to 7 yuan ,but over the past half a month,it can't find any statement in the price rising of McDonald's in open channel . The behavior of price rising can help McDonald’s get more profit ,maybe most of consumers even didn’t know about the price rising or what ever 6 yuan and 7yuan do not have any differences to them . But in my opinion , A company must have the corporation society responsibility , announce to customs is the significant thing which could stand for a rigorous and responsible to the enterprise.

3.2 The rights ethical approach

The rights ethical approach is based on the concept that everyone have the right in their life and should be teated with dignity and respect . Morals is the main part of this because treat people good or not mostly depend on the ethical behavior. Business ethics theories often use this approach by not imposing their products, missions, or systems on consumers. In this area , KFC and McDonald’s all doing good , they all have a gold standard named “customer first” or as a proverb in China :“The customer is god”. Their employees are also respected and paid attention. Employee can get formal approval because of good performance, extra effort, teamwork and customer service . These two companies are all allow citizens to enjoy the summer air conditioning in their stores, allow temporary homeless in the store for the night and also allow outsiders to use their toilet . Respect the customers and employees , protect their right are the conscience of a corporation , in my heart ,these simple behaviors are more noble than some corporation do the donations just for show. Especially in China, so many organizations did not know what is corporation society responsibility, moreover, they directly damage the interests of the individual and society like Sanlu milk powder. The challenge could not be more urgent. A substantial majority of people in China are dissatisfied with the social behavior of our corporations, say several recent news reports. Poor treatment of workers at home and abroad, products that don't perform as advertised, fake commodities, poor customer service, environmental pollution, to mention a few.

3.3 The Justice ethical approach

Justice is one of ethical approach which also known as the fairness ethics theories in business .It is where all humans are treated equally through society, regardless of position , creed, rank, class, or race base on liberalism.If people are not treated fairly , for example , one employee receiving higher compensation than another, there must have a justifiable reason ,such as he has the exclusiveness of a job position or higher technical skills . As I know, McDonald's has the most quantities of minorities and women's franchise in the service industry. McDonald's committed to eliminate the discrimination of ethnic minorities and women, sexual , promote the diversity and inclusiveness, make the openness and diversity education actively, promote diversity in the organization. McDonald's and the national economic association for the advancement of colored people, the organization of the chinese-american, people with disabilities and other organization formed a partnership . This kind of management mode is a way to show the justice ethics and it is easier to win people's favor.

3.4 The virtue approach

The virtue approach is a bit more difficult for businesses to implement, as its approach focuses on following ethical principles that should be evident in society. These principles or virtues seek to replace the current values if they do not bring about the most good or best development of humanity. Businesses can implement this approach, although it may run against the grain of society until the values take hold among the general public. According to the working experience in McDonald’s of me , I know that all the food have its resting period, for example, if fried chips put under the hot light over about 7mins , it will not suitable for sale .And both in McDonald’s and KFC ,They discarded the rest humburgs , fried chickens and so on every day if they were not sale out in the day. In fact ,these food were not expired ,but they want keep their best taste so just throw them .Absolutely, this kind of behavior is waste and not good for the corporation’s interest .In the other hand ,it has another advantage that is build a good impact in the consumers .

Conclusion

Probably the past experience of working in McDonald’s that make me prefer to McDonald’s ,but it is no doubt that no matter Food safety or public welfare undertakings (especially for kids by McDonald’s), McDonald’s doing better than KFC, I think that is why McDonald’s is the world biggest fast food corporation. All these behaviors will influence the brand image around the customers and society . The keys to running an ethical company are honesty, information transparency and accountability . At the same time we also noticed that they all did not be chosen as the world most ethical companies in 2013, and some scandals were reported by the media in very few stores, they still have a long way to go and learn .Maybe some organization legal but they are unethical, they will never win the respect of the consumers so far as to go into liquidation.

References

[1] http://www.doc88.com/p-790227987315.html
[2]Held,V.(2006).The Ethics of care. Oxford Scholarship Online
[3]http://doc.mbalib.com/view/cebe76aac671305277c67823e7c0c97c.html
[4]http://en.wikipedia.org/wiki/Utilitarianism
[5]Derek Cho-Kwan Law, Leo Liu He,Business Ethics , 2011
[6]http://www.businessdictionary.com/definition/reactive-strategy.html

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