The introduction of McDonald's 

1. What are business ethics?
'Ethics' define moral guidelines that govern good behavior. To behave ethically would be to behave morally correct. Within a business, this would involve making decisions based on the morality of the result.
Business ethics is a form of applied ethics or professional ethics that examine ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.

I have chosen McDonald’s as my business due to the fact that it is an extremely popular international franchise, therefore it is easy to study, in addition to the fact that there have been a vast number of issues with the company throughout their existence as a business.

2. What are the ethical issues McDonald's face on a day to day basis?

• Corporate Governance 
• Corporate social Responsibility 
• Environment
• Sustainability
• Human Rights
• Corruption
• Fair Trade
• Legal and Regulatory Compliance
• Business Practices
• Working Conditions 

Who are the McDonald's stakeholders? 

Stakeholders are people involved or concerned with a situation. In the McDonald's food industry, these would involve the following Stakeholders: 

• Employees and Staff
• Customers
• Suppliers 
• The Government 
• Communities 

The Customers are the external stakeholders, due to the fact that they aren’t employed amongst the franchise, but they still buy their products, and may involve themselves in company events. Even if McDonald’s isn’t a daily usage in their life, they are still a stakeholder. The Customers interests revolve around what McDonald’s has to offer them in terms of product (eg: food that caters to their needs). The Customers are what keep McDonald’s functioning, as they provide them with money to help the business operate and expand. 

The Suppliers are also internal stakeholders, as they will work alongside McDonald’s and supply various ingredients and essential products for the McDonald’s stores. If McDonald’s didn’t have a supplier, they wouldn’t have any products for their customers. Suppliers’ interests with the company revolve around the quantity of the orders and purchases the McDonald’s franchise requests from them. The larger and more frequent the request, the more money they earn.

Trade unions are external stakeholders as they work outside the business. Trade unions are people who are in charge of assuring that the working conditions, salary and working process’ are all suitable for the employee’s of the business. Trade Unions have an interest in McDonald's as some of their staff from each franchise will pay to be a part of their union; therefore, they earn lots of money.

The Government is involved with McDonald’s, as they are external stakeholders that hold an interest and influence on McDonald’s. This is because McDonald’s offer lots of opportunities for the unemployed to get a job, due to the vast number of global franchises. The Government also pass new laws that could affect the way McDonald’s functions. If McDonald’s were not in tact with the law, the business could suffer extreme consequences. The Government will be involved in any major decisions McDonald’s needs permission for, such as building another franchise.

Communities are external stakeholders, and are widely involved with the company, as they are interested when stores are planning to build near them, and what jobs they can offer within the company.

Impact on the stakeholders 

The Customers will both be positively and negatively affected. Physically and emotionally, they will be positively affected by these changes provided by the McDonald’s corporate. They will be consuming healthier, more sanitary McDonald products; therefore both increasing their heart rate, and lowering their blood pressure, and in general, improving their health by a significant amount. And emotionally, the amount of mood swings and other personality disorders will decrease, as their body will be generating healthy, natural ingredients. However, in spite of the fact that the price of McDonald’s products may rise; these decisions will significantly increase the overall health of their customers. Therefore, their products would be worth paying for, and it would be a wise company decision to change their product ingredients, in order for this to happen.

In a negative aspect, McDonald’s will be purchasing their ingredients from a different supplying company; which will most likely be a more expensive than the previous, as a supplying company that specializes in offering more natural and healthy products, will mean that it will be more expensive in comparison to a less healthy, and less natural supplying company. The higher the market the meat,the higher the price, in comparison to cheap meat, which has a less of a demand in the food market.

This will lead to the next negatively affected Stakeholder; the Suppliers. The original Suppliers of McDonald’s will lose a large amount of company investment, due to the fact that McDonald’s will be forced to drop their supplies, in order to gain a more healthy recognition, and provide better food for their consumers. This means that these Suppliers will lose a vast amount of their income, and will have to seek another company that are in need of their supplies. It is possible the supplying company will go bankrupt, as McDonald’s is an incredibly large international corporation, and a majority of the company income will come directly from McDonald’s. Although this would be a massive disadvantage for McDonald’s original supplying company, it would be a necessary change, otherwise McDonald’s will carry their negative and unhealthy reputation, and their customer demographic will decrease.

Trade Unions will be another Stakeholder who will be negatively affected, as the staff will most likely stop paying the Trade Union’s to provide them assistance, due to the fact that McDonald’s will be having an income of healthier ingredients, and will raise the employees’ salaries with their large income from their customers. Therefore, the Trade Union’s will be losing their customers and losing a lot of their income.

The Government’s position as a Stakeholder will be unlikely to be impacted significantly.  They will remain an influence on McDonald’s, and most likely earn an even larger income from their franchises due to their customer increase with their new corporate changes. This will also give them an opportunity to help employ people without jobs, who are satisfied with McDonald’s (possibly) new employee wages. This also links into Community Stakeholders, who are seeking jobs and would like to work in McDonald’s, or will be satisfied with their franchise in their community; particularly with these new changes.

Corporate Governance 

Corporate Governance defines the people and the procedure that occurs when a company has to make a major decision. The major decisions within McDonald's would be made by the owners, and the higher ranked positions within the business.

McDonald’s Corporate Governance is written on their official company website that their ‘success is built on a foundation of personal and professional integrity. Hundreds of millions of people around the world trust McDonald’s. We earn that trust everyday by serving safe food, respecting our customers and employees and delivering outstanding Quality, Service, Cleanliness and Value (QSC&V). We build on this trust by being ethical, truthful and dependable.’

The McDonald’s corporate Governance lacks validity, due to the vast number of negative issues founded in the past revolving around their industry. In one of the most recent scandal’s the industry had in 2014, McDonald’s global sales dropped 2.5 percent. The decline included a 3.2 percent drop in the US, and a 7.3 percent drop in the unit encompassing asia, the middle east and africa. These mass drops followed in July 2014, when a TV report showed workers at a McDonald’s supplier repacking expired meat. McDonald’s is now unable to serve much from its menu, including Big macs and Chicken McNuggets- two of the most famous McDonald specialities.

A CNBC report was released about the fast-food joint, claiming that the results ‘were the worst worldwide month in the last 10 years, once trading-day adjustments are taken into account.’ These reports demonstrate that McDonald's Corporate Governance is indeed conflicted with McDonald's latest food catastrophe, and their actions are extremely unethical towards their customers, and they are now losing their customers because of this.

In order to gain their customers back after these significant drops, they would need to change their supplier in order to have more substantial and healthy food, and they would need to insure that they have constant health checkups in order to ensure that this does not repeat. 

Environmental Ethics 

McDonald's has been accused of having a negative impact on the environment in more than one way; revolving around the fact that they have built hundreds of factories around the world to produce their products; therefore leading to pollution. McDonald's is distributed amongst 119 countries; therefore the amount of factories and work involved to make their products, will significantly impact the air and the environment around them.
 McDonald's also continue to use paper and plastic based cutlery and eating utensils, such as paper plates and plastic forks, which means they are continuing to abuse the environment by tearing down their trees to help make their eating utensils, as well as throwing out their plastic wastes, which is also very damaging, as plastic is difficult to break down. 

Legal and Regulatory Compliance

The McDonald's food industry has been criticized throughout their business career in terms of the ingredients within their products. In Mid-July, 2014, there was a scandal in Hong Kong, involving the McDonald's industry, which resulted in Hong Kong having to remove their famous 'Chicken McNuggets' and 'Chicken McBurger's from their food menu. This was done after a chinese food supplier was found to be taking poultry that had expired, then re-processing the meat and serving it up for customer consumption. The operation 'Shanghai Hsui' is where McDonalds is known to have their ingredients flown in from, and it has now closed down due to health and safety violations.

McDonald’s said: “We reiterate that until today, all the food sold at McDonald’s restaurants conform to the food safety standard under Hong Kong legal regulations.”

In 2009, an experiment was done on some of the McDonald's products, in order to give viewers an idea of the chemicals and toxins that went into their food. Morgan Spurlock, who is an American entertainer, reporter and documentarist, recorded his experiment of McDonald's french fries and burgers, alongside a regular burger and french fries, in order to gain an understanding of which food would expire the fastest. After a ten week period, the McDonald's french fries appeared to still be edible; suggesting that the ingredients were not natural nor real potato. This caused questioning amongst viewers and customers, and caused McDonald's an extremely unsanitary, unhealthy, and very unethical reputation.