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Rewrapping the Big Mac

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Introduction:

¬†¬†¬†¬†¬†¬† McDonald’s Corporation has a clear code of ethics that governs its businesses. They are committed to it fully and have staff that follow up on its implementation and conformance. This code of ethics spells out many issues that the respective restaurant heads are audited against periodically by the internal and external mechanism. The code is a promise to abide by the standards of business conduct. They also promise to uphold integrity and and keep off ¬†potential conflicts that may be either private of public in nature. The McDonald’s code of ethics also pledges to resolve any private or public conflict that may take the position of economic, political, social, financial and environmental stance. (McDonald’s Corporation, 2006, Online)

¬†¬†¬†¬†¬† McDonalds will also be transparent on the course of action that they use to resolve such conflict. In this case, they will be seeking to foster good relationship with all the stake holders. On the economic gains, McDonalds have the ethical responsibility of declaring the returns to the shareholders in accuracy, punctual, transparent and required depth. The promise to uphold the US and non US businesses regulations. The promise to act without malice, with reasonable care, and with transparent facts that will not be affected by any second or third party pressure. The corporation cherishes business independence that they would like to demonstrate to any independent second party auditors. (McDonald’s Corporation, 2006, Online)

¬†¬†¬†¬†¬†¬† McDonalds promises to make the right decisions and interpretations that are devoid of subordination. The code of ethics also binds the employees to maintain vital corporation confidentiality unless duly authorized. They have a promise that all employees will have good flow of communication. The will be regularly updating the shareholders of any financial matter that impact on the business. They encourage the employees to work ethically and be accountable at all times in terms of assets and resources management.(McDonald’s Corporation, 2006, Online)

The Case Study: Rewrapping the Big Mac.

         McDonalds was prompted to make the abrupt decision of switching from the clamshell polystyrene hamburger boxes wrap to paper wrap due to environmental concerns. There were consumer concerns that the polystyrene wraps were polluting the environment even if the company had been able to recycle them in the past. They were now holding the opinion that the paper wrap were more environmentally sound. (Shaw and Barry, 2007, p. 597).

            McDonalds was forced to reverse this long time policy so quickly due to several reasons. First, there were aware of the developments that had occurred at their competition, the Minute Maid, who were caught up in an environmental campaign fiasco. The McDonalds learned that the Minute Maid were trying to drive a campaign for cleaner environment yet their packaging was in fact not conforming  at all. McDonalds knew that they were in the same shoes and sooner or later they were going to face the same fate. (Shaw and Barry, 2007, p. 597).

      Second, McDonalds corporation claimed, through the McDonalds US president that they were responding to the customer concern. They were insinuating that the customer is king and their wishes must be granted lest they start engaging in smear campaigns that would impact on their business negatively. McDonalds were scared that the children products market share was at risk in case they were convinced not to buy over the environmental issues. To this end they did not want to appear as if  they were more concerned about profits than the environment. McDonalds held that the customers demands were dynamic and for that matter, they made an abrupt change within 72 hours. Even hot on the McDonalds heels were the environmental campaigners who advocated for cleaner and safer environment that protects the ecological systems. (Shaw and Barry, 2007, p. 597).

          McDonalds packaging change efforts were a mix of both genuine concern and self interest.

The genuine interests were in regard to conserve the environment and the ecological system. There is evidence that McDonalds, until recently, was not offering the recycling services to all of its 8,500 restaurants. This shows that quite a number of their polystyrene packaging were ending up in the wrong disposal points, most likely in the environment. They only did this after pressure mounted from environmental activists and the consumers. (Shaw and Barry, 2007, p. 597).

        Second McDonald was acting on grounds of self interest since they were merely responding to the public pressure. They wanted to maintain and increase their customer base and business relationship. There is evidence that when McDonalds switched to paper packaging from the polystyrene packaging, there were well aware that the paper packaging would also pollute the environment. Thus, they could have been playing some public relations in this effort. McDonalds must have been very aware that the environmental lobbyist are wrong in their allegations that the paper wrappings were better and safer than the polystyrene wrappings. In fact, McDonalds was just experimenting and giving the topic some time to disprove itself and then revert back to the facts of the polystyrene wrapping technology and its environmental effects. (Shaw and Barry, 2007, p. 597).

¬†¬†¬†¬†¬†¬†¬†¬† McDonalds acted on egoism theory to protect their self interest and motives. Particularly, they were acting from the universal ethical egoisms that will allow them to pursue their interests uniquely. It did not matter if they knew what was in their best interest or even the meaning of self interest. So in this decision, their universal ethical theory allowed their actions to be interpreted as both right or wrong. They knew that polystyrene packaging was polluting the environment. They knew that the right thing to do was to switch which they did. But in the adoption of the paper packaging, they gave room for the consumers and interest group to be find out the ‘wrong’ that paper packaging does not pollute the environment.

Therefore the ethical egoism was used inconsistently at the McDonalds convenience. Also if McDonalds thought that by adopting universal policy that touch on packaging and environmental pollution they were also promoting self interest, they could have been wrong. This was because this decision goes beyond self organizational interests. But if they were truly acting on self interest, then they were going to help many more people in the end. The prevailing events were calling for them to make changes for their own good and for others even if their freedom to choose is limited. (Moseley, 2006, Online)

¬†¬†¬†¬†¬†¬†¬†¬† The McDonalds’ decision to switch was also basis of libertarian ethical theory. They were aware that the government had the capability of enforcing social and environmental order in the free market economy. (Episten, 2003, Online).This implies that they do not have so much freedom to if such regulation were to take effect. With this theory, McDonalds was also seeking to define their own class of social responsibility. They wanted to be seen as different from the rest. They wanted to cut an image between the socialist views about the environmental pollution and the capitalist views about McDonalds making more McDonald did not want the socialist to interfere with the capitalistic goals. Even more, McDonalds could have been making a populist move as is consistent with the third example of libertarian views. (Shaw & Barry, 2007, p. 509-533);

      Ethical theory supports and also disproves the decision that McDonalds made. This is in regard to the utilitarianism which, as a normative theory of ethics, demands that McDonalds, under the packaging techniques and environmental concerns, must do what will bring more total good than those of the alternatives course of action. This normative theory of ethics, therefore, will support what McDonalds did and hold it as the right one. (Shaw & Barry, 2007, p. 57);

          In the case study, McDonalds had moral obligations. First, on deciding to continue or discontinue the polystyrene packaging for  the paper packaging. They needed to decide which one will give the greatest happiness to all the stake holders. The stake holders in this case are the polystyrene packaging companies who, on a policy shift to paper packaging would have loss of jobs and income. The others are the customers, whose ecology would be polluted and eventually lead to harm to many biodiversities that they depend on mutually. The other stake holder was McDonalds itself. By use of the polystyrene packaging, they had managed to achieve better product and quality consistency.(Shaw & Barry, 2007, p. 57)

             This packaging also made their food handling process easier considering the millions they serve everyday and more presentable to boost their sale and marketing skills. Therefore a decision to stop using the polystyrene packaging would harm a few thousand of jobs and the quality and food handling skills of McDonalds. But the majority, who are the customers and their related biodiversities would gain. This was the first moral obligation following the utilitarianism theories.  (Shaw & Barry, 2007, p. 57).

         The second moral obligation that faced McDonalds, was the effects of the polystyrene packaging to the environment. It is noted that the majority of the people consisting of customers and activists were generally happier with the switch to paper packaging even though McDonalds had the capacity of recycling the polystyrene packaging efficiently. Of the two decisions, the switch to paper packaging made them happier and McDonalds had to adapt to this urgent change. (Shaw & Barry, 2007, p. 57) .

             Third, McDonalds had the moral obligation of deciding whether breaking the promise or keeping the promise would make the customers happier. Since they had been promising to champion the course of environmental conservation for decades, they had the duty of keeping this promise if they wanted to make people in the USA market happier. But it is curious to note that McDonald did not keep a similar promise in the rest of the world. This cannot be considered unethical since the citizens and customers in the rest of the world were not unhappy with their continued use of the polystyrene packaging. Thus in the rest of the world, this utilitarian rule was looked at from the circumstantial point of view rather than the environmental point of view. It appears both regions were happy with the policies on the ground. (Shaw & Barry, 2007, p. 57);

       The fourth point on moral obligations that McDonalds was implementing was the maximization of happiness now and in the long run. They needed to ensure that a shift from the polystyrene packaging would even out the current negative effect and give the customers happiness that would eventually build their brand name.  In this case they had the obligation of telling the customers the truth. However, it appear that McDonalds did not put this in mind, There were in essence sitting on a reputation time bomb. Sooner or later the customer were going to establish that the paper packaging was even worse that the polystyrene options as the latter can be recycled while the former cannot. When this leaks out, McDonalds will have to invest on a scheme of business public relations building. In the end the customers will be much unhappier. (Shaw & Barry, 2007, p. 57) ;

           Fifth, McDonalds needed to adopt a policy that would ensure that this majority stake holder practice would be in place for a very longtime, bearing in mind that business relations are always uncertain in the long run. Thus, they should have considered that an adoption of a policy in the short run just to keep the sale hot and revenues streaming in to make the company richer was not moral. If the customer found out in the long run, the relationship and the business bonds will be broken. In the end what make customers happy is the truth on policies even if it does not go well with their opinions. This is the way to build long lasting trust and business relations.(Shaw & Barry, 2007, p. 57) ;

         Last, McDonalds had the moral obligation of factoring their inconvenience on the shift from polystyrene packaging to paper packaging rather than giving it more consideration at the expense of the majority stake holders. McDonalds were aware that when they switched the packaging as described, they would loose out on quality such as temperature abuse, physical handling, customer service efficiencies. This convenience is a pleasure that they had to fore go to satisfy the bigger customer and environmental aspirations. Granted, the paper packaging was going to be cheaper, so in the end the revenue calculations were going to even out. (Shaw & Barry, 2007, p. 57)

¬†¬†¬†¬†¬†¬†¬†¬†¬† By Kant’s Ethical Theory, McDonalds had got both the hypothetical and categorical reasons to change from packaging policy as they did.(Shaw & Barry, 2007, p. 517) Hypothetically, they had to switch to the paper packaging so that they could achieve the market goal that satisfy the consumers. The consumers and other environmental pressure groups were as asking for this change on genuine concerns of environmental pollution. (Stair, 1997, Online)

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Kant’s Ethical Theory can also be used as a categorical imperative to justify McDonalds’ swift action. On categorical grounds, McDonalds acted as a management that has rational human beings. Therefore, they were allowing rationality to govern their actions even if they did not seem to be acting rationally. This categorical imperative was taken by McDonald’s because they were aware that the environmental policies had the potential of becoming universal laws at their maxim. They are aware that other industry player have the potential of bowing to the packaging and environmental concerns and would not like to be seen as isolated. But the bigger duty was to handle humanity as a means rather than as an end. (Stair, 1997, Online)

¬†¬†¬†¬†¬†¬†¬†¬†¬† McDonald’s applied Kant’s theory as they have a duty to themselves as an organization and a duty to others. The duty to themselves is the self interest that they have to ensure that business prospers ethically and economically. The duty to other is in the participation in the conservation of the environment by minimizing pollution by use of appropriate packaging. (Stair, 1997, Online)

¬†¬†¬†¬† ¬†McDonalds also acted along perfect and imperfect guidance as postulated by Kant’s Ethical Theory. They made the packaging switch as a perfect duty that implied they were had no alternative choices and were following systems of nature. The greatest perfect duty that made McDonalds to switch to the packaging was their previous promise not to lie to the consumers. These promises are in the McDonalds corporation ethical and moral policy documents. Conservation of the environment is key in this draft and McDonalds would not like to come out as false givers for selfish reasons. They are aware that they can avoid lying to the customers.(Stair, 1997, Online)

            The imperfect duties were the good actions of switching to paper packaging which in consideration of details also have negative impact on the environment. However, this was adopted on the scale of better choice to polystyrene packaging. McDonalds are aware at heart that they will not like to be associated with this move other dimension of imperfect duty that McDonalds owed was the duty to benevolence whereby the will expect other to help them out of the prevailing situation because of the circumstance rather that what they have powers to do internally. (Stair, 1997, Online)

       The problems of fast food packaging, waste and recycling should be addressed from a combination of business and environmental convenience point of view. These two need to be well balanced. (EJBO,  2008, p. 1-8)The food packaging needs to be environmentally friendly to dispose, but this needs to be balanced with the cost of the technology so that the profit margins do not suffer. The waste need to be biodegradable in the environmental circumstances or cause least pollution, but this need to be made of material that are strong enough to support the integrity of the food content.(Shaw & Barry, 2007, p. 57)

             They recycling needs to be feasible to safeguard the environmental biodiversities but this should not take so much of the business activities since the McDonalds as an example in this case study, were in the core business of fast food restaurants. Thats how they make their profits. However this is not to say that McDonalds need to put profit issues above the environmental concerns. The two must coexist harmoniously. (Shaw & Barry, 2007, p. 57)

        All these are supported by the normative ethical theories of utilitarianism as well as the ethics of environmental protection. The ethics of environmental protection rotate on the principles of waste reduction, elimination and reduction of pollution. It also calls for conservations of the scarce resources. The moral obligation call for avoiding the the free rider effect. Stake holders must take specific stance and responsibility. The environmental protection theories hold that every little bit of effort that stakeholders like McDonalds put in will be summed up to give a greater positive value. Thus they must contribute equally.  (Shaw & Barry, 2007, p. 57)

       The concept of environmental protection are calling for firms to apply the environmental policies both inside and outside their immediate set up on a fair approach. This needs to be done from the point of corporate social responsibility. The concept would like companies to feel bound by the direct effect as well as the spill over effects. (Shaw & Barry, 2007, p. 57)

           The cause for moral obligation is also supported by the concepts of cost of pollution. The whole business sector such as fast food restaurant must always consider the quality of the environment and how much it would cost if its equilibrium was tilted to the negative sides.(EJBO,  2008, p. 1-8). Therefore the stake holders like McDonalds will need to come up with appropriate technologies that will promote sustainable and safer environments. The cost benefit analysis are derived to establish if some policies are worthy the cause. This means that if McDonalds adopts a method of controlling environmental pollution, the net result must show that the costs of implementing the process. They have to consider if the cost of implementing an environmental policy will be greater than the cost of closing down the business which will cause economic harm. (Shaw & Barry, 2007, p. 57)

¬†¬†¬†¬†¬†¬†¬†¬† Other environmental concepts that must be considered are the life expectancy and how much it would cost on medical terms. If McDonalds’ packaging will cut down on the pollutions, it is expected that more money will be saved. However the challenge has been to estimate these costs so that they can be factored on the labeled price tags for taxation purposes. Worst still, it is very hard to predict the future environmental ramifications. (Shaw & Barry, 2007, p. 57)

         The pressure that was applied by Environmental Defense Fund and other environmentalists was a good thing, as opposed to what Johnson and Bow intimate, as an illegitimate intrusion into a business decision. (EJBO,  2008, p. 1-8).The duo felt that the shift of packaging was more of sentimental than factual and that their economic prosperity was under great threat. They would like the packaging to be used based on the benefits rather than mere lobbyist pressure. This in the contrary, is wrong as the duo did not consider the greater good and potential negative effects arising from the use of these technologies. (Shaw & Barry, 2007, p. 57);

            Ethical theory does not support both Johnson and Bow. Based on the utilitarian views and ethical egoism, the duo did not consider the packaging aspects that would make most people happy because they did not do a proper summation of the number of stakeholder who will gain and those who stand to loose. Second, the duo did not seemed to have taken these views because they support their comforts in the packaging industry and recycling business. (Moseley, 2006, Online)

    Third, the duo seemed to have considered what is convenient in their circumstances. They wished the business would continue in USA so that they could continue to get the returns at their convenience. They did not care whether McDonald was breaking or keeping the promise of environmental conservation. (Shaw & Barry, 2007, p. 57)

          Fourth, the duo simply wanted to maximize their business happiness and have advantage over other stake holders. They cared less on the effects. Fifth, the duo did not seem to have the future interest at heart. Thus they wanted to maximize their returns at the expense of others. They are ware that if McDonalds relationship and trust with the  customers is broken, they will move on to the next firm and continue their business. Sixth, the duo seemed to give their view more weight than the rest of the stake holders so that they derive most pleasure. Following this observation, Johnson and Bow are out of context as far as the normative utilitarian ethical view  are concerned and advocate.  (Shaw & Barry, 2007, p. 578-592);

¬†¬†¬†¬†¬†¬†¬† It may not be right to claim that the environmentalists focused on the McDonalds because the company symbolizes a throw away fast food culture that they don’t like, rather than because the polystyrene packaging are damaging the environment. This is because all businesses and McDonalds being an example, need to operate in an ecosystems that is harmoniously set. The regular equilibrium shifts call for businesses like McDonalds to show some level of sensitivity to the sustainability of the environment. (Shaw & Barry, 2007, p. 578-592);

        Second, if businesses like McDonalds continue to operate under the existing false belief that resources are unlimited, they will not engage in conservation and pollutions reductions practices. This means they need to stop weighing much of their decisions on self interest. They must start considering the economic costs and balance these with possible social and environmental costs. (Shaw & Barry, 2007, p. 578-592);

         Third, McDonalds are aware that pollutions has a cost. This must also be traded off as someone must bear the costs. Thus their choice of packaging must put this in mind. The fact that the actual cost of the environmental pollution is not quite quantifiable at the moment does not mean that the corporations like McDonalds can not be held responsible. They must accept to take their role of equitable environmental cost together with the rest of the society. (Shaw & Barry, 2007, p.578- 592);

            Fourth, McDonalds as an example must be stopped in good time from participating in the  free rider effects as far as the environment is concerned. This means that they must learn to balance the internal needs and the external costs so that the association is balanced fairly. This kind of strategy will be a sign that McDonalds is allowing the society to enjoy their environment. (Shaw & Barry, 2007, p.578- 592);

           Fifth, McDonalds, rightly so, have been included in the protection of the environment by use of environmental regulations, incentives and other levies and taxes. These are for the purposes of protecting the environment. Even if these methods have not been very successful in the past, they need to be aware that their participation on the environment matter will give better results. (Shaw & Barry, 2007, p.578- 592);

          Sixth, McDonald needs to be aware that nature has intrinsic value.  This means that they must also value the environment not because man lives in it but due to its values. The environment must be conserved beyond the human interest. (Shaw & Barry, 2007, p. 578-592)

           Seventh, McDonalds, as a leading fast food restaurant in the word, must ensure that they protect the environment for the future generations. Even the unborn have the rights of living in future safe and healthy environment just like the current generation. (Shaw & Barry, 2007, p. 578-  592).

         Lastly,  McDonalds need to pay very close attention to the results that are being released from the test of biodiversities extinctions to be able to believe that the impacts of environmental pollutions are real and not imagined. This also means that their raw material also need a policy shift to, say, organic products. (Shaw & Barry, 2007, p. 578-592);

Conclusion:

     McDonalds was prompted to make the abrupt decision of switching from the clamshell polystyrene hamburger boxes wrap to paper wrap due to environmental concern. McDonalds packaging change efforts were a mix of both genuine concern and self interest. The genuine interests were in regard to conserve the environment and the ecological system. McDonald was acting on grounds of self interest since they were merely responding to the public pressure. They wanted to maintain and increase their customer base. (McDonalds Corporation, 2006, Online)

       Ethical theory such as Kant, Egoism, Libertarian and environmental,  support and also disproves the decision that McDonalds made. This is in regard to the utilitarianism which, as a normative theory of ethics, demands that McDonalds, under the packaging techniques and environmental concerns, must do what will bring more total good than those of the alternatives course of action. (Shaw & Barry, 2007, p. 57);

           The problems of fast food packaging, waste and recycling should be addressed from a combination of business and environmental convenience point of view.(EJBO,  2008, p. 1-8). These two need to be well balanced. The ethics of environmental protection rotate on the principles of waste reduction, elimination and reduction of pollution. It also calls for conservations of the scarce resources. The moral obligation call for avoiding the the free rider effect.(Shaw & Barry, 2007, p. 57)

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† The whole business sector such as fast food restaurant must always consider the quality of the environment and how much it would cost if its equilibrium was tilted to the negative sides. Other environmental concepts that must be considered are the life expectancy and how much it would cost on medical terms. If McDonalds’ packaging will cut down on the pollutions, it is expected that more money will be saved. However, it is very hard to predict the future environmental ramifications. (Shaw & Barry, 2007, p. 57)

¬†¬†¬†¬†¬†¬†¬†¬† The pressure that was applied by Environmental Defense Fund and other environmentalists was a good thing, as opposed to what Johnson and Bow intimate, as an illegitimate intrusion into a business decision. Ethical theory does not support both Johnson and Bow by arguments of the utilitarian view. It may not be right to claim that the environmentalists focused on the McDonalds because the company symbolizes a throw away fast food culture that they don’t like, rather than because the polystyrene packaging are damaging the environment.(Shaw & Barry, 2007, p. 592);

¬†¬†¬† ¬†¬†¬†¬†¬†¬†¬†McDonald’s corporations has also got moral legal liabilities as a manufactures, to ensure that all their operations and activities are safe and sound. They are obliged to conform to government safety rules and regulations at every business operation point. Their business ethics responsibilities go further than just product safety and they have an elaborate training scheme to ensure that all the employees are aware of the ethics of operation. They have an ethical responsibility of ensuring the customers get the best quality products. Finally in their advertisement and public relations, they have the ethical responsibility of allowing other competitors to participate in the market. (Shaw¬† and Barry,2007, p. 560-598).

 

List of references:

EJBO (2008). ‚ÄúUnderstanding McDonalds amongst the World’s Most Ethical Companies.‚ÄĚ

             Electronic Journal of Business Ethics and Organization Studies. Vol. 13. Issues 1. p. 1-8.            Available at <http://ejbo.jyu.fi/pdf/ejbo_vol13_no1_pages_5-12.pdf>

            Accessed on April 27, 2008.

Epstein, R.  (2003). Skepticism and Freedom: A Modern Case for Classical Liberalism.   Chicago: University of Chicago Press.

Guha, R., 1989. ‚ÄúRadical American Environmentalism and Wilderness Preservation: A Third ¬†¬†¬†¬† World Critique‚ÄĚ, Environmental Ethics 11: 71-83.

McDonalds Corporation (2008). McDonalds issues first worldwide social responsibility report.

             CSRWire. Available at <http://www.csrwire.com/news/1042.html>

            Accessed on April 27, 2008.

McDonalds Corporation (2006). McDonald’s Corporation Financial Officer Code of Ethics.

             Available at <http://www.mcdonalds.com/corp/invest/gov/officer_ethics.html>

            Accessed on April 27, 2008.

Moseley, A. (2006). Ethical Egoism. Available at

             <http://philosophy.lander.edu/ethics/ethical_ego.html> Accessed on May 2, 2008.

Shaw, W. H., and Barry V. (2007). Moral Issues in Business (10th Ed). CA: Wadsworth

             Publishing Co.

Stair, A. (1997). Kant’s Ethical Theory.¬† Available at <http://stairs.umd.edu/140/kant.html> ¬†¬†¬†¬†¬†¬† Accessed on May 2, 2008.

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