Introduction

What is business ethics?

Business Ethics is a relatively new, but increasingly important, part of Business Studies. The question, or problem, is this:

A business is expected to achieve its objectives, usually to make a decent profit for the owners/shareholders. In doing so, it may need to overlook the wishes of others.

For example, it could lie about the benefits of its products in order to get more revenue. It could skip important safety checks to save costs. What should the business do?

To some extent, this is an area already covered by Business Law. When society largely agrees, a law can be passed to stop behaviour the society disapproves of. For example, discrimination against women is illegal (it wasn’t always so).

What Business Ethics Covers

Business Ethics looks at areas that are too new, or too controversial, for society to agree on. For example, the medical business is increasingly controversial. The pharmaceutical businesses concentrate their (very expensive) research on illnesses that afflict rich people, because rich people (or the government of a rich country) can afford to buy these new treatments when they are launched on the market. This means too little research is done into illnesses (like malaria) that primarily affect poor people and poor governments. Is this right?

So, we can have profit-maximising businesses that don’t worry too much about who gets in their way; or we can have ethical businesses that are very careful with people get in their way, but which don’t make very much profit. This is the contrast, the trade-off that we are faced with.

Or is it? Increasingly, there is thought about a middle way. Consumers in developed countries are increasingly aware of ethical issues, and some are prepared to pay for it.

For example, BodyShop was one of the first businesses to build on this trend, and made their market niche largely out of the fact that their products are kinder to the world than are competing products. Why buy from BodyShop? Because their products aren’t tested on animals. So, the ethical nature of the product becomes part of the unique

selling point ("USP") of the product and central to the Marketing of that product. In other words, there is no conflict between ethics and profit, because an ethical stance is part of the profit-making process.

Since then, many businesses in all sorts of markets have followed this line. Washing powders, for example. BP is trying to portray the oil business as environmentally friendly. Other businesses have been pushed in this direction by adverse publicity. Triumph, a Swiss makers of bras, was forced to abandon an investment in Myanmar (Burma ) because of widespread opposition to a dictatorial and unpleasant government. And Nike (and others) have been widely criticised for using cheap labour in developing countries, which is what you would expect from a profit-maximising business.

One difficult question is ‘what sort of things count as ethical question?’ There is no agreement on this, hence the difficulty. Take the example above. Some people might say well-done to Nike for creating jobs in a very poor part of the world where jobs are desperately needed. But other people have said that it is unethical to exploit very poor people, and to make them work in poor conditions for low wages, especially when the business could afford to pay them more.

CODE OF ETHICS

It is believed that the best way of promoting high standards of business practices is through self-regulation.

Business should be conducted in a manner that it earns the goodwill of all concerned through quality, efficiency, transparency and good values. This Code has been designed as a voluntary guideline to achieve these objectives.

Be truthful and realistic in stating claims.

Be responsive to customer needs and concerns.

Treat all stakeholders fairly and with respect.

Protect and promote the environment, conserve water and power and community interests.

Be law abiding and do not suppress the truth howsoever unpleasant it may be in the short run.

SEVEN STEPS FOR IMPLEMENTING THE CODE

Integration and Endorsement

Evolve a strategy for integrating the Code into the running of business at the time that it is issued. Make sure it is endorsed by the CEO.

Distribution

Send the Code to all employees in a readable form and give it to all employees joining the company.

Breaches

Include a short section on how an employee can react if he or she is faced with a potential breach of the Code or is in doubt about a course of action involving an ethical choice.

Affirmation

Have a procedure for managers and supervisors regularly to confirm that they and their staff understand and apply the provisions of the

Code and raise matters not covered by it. They should suggest its updating.

Contracts

Consider making adherence to the Code obligatory by including reference to it in all the contracts of employment and linking it with disciplinary procedures.

Training

Ask those responsible for company training programmes at all levels to include issues raised by the Code in their programmes.

Nurture

Nurture the talent of employees to get the optimum performance, treat them fairly and with respect.

Why are ethics important?

Recent events in corporate America have demonstrated the destructive effects that occur when the leadership of a company does not behave ethically. One might wonder why highly educated, successful, and business savvy corporate professionals at Enron, Tyco, WorldCom, and Adelphia got themselves into such a big mess. The answer lies in a profound lack of ethics.

Running a business ethically is good for business. However, "business ethics" if properly interpreted means the standards of conduct of individual business people, not necessarily the standards of business as a whole.

Business leader are expected to run their business as profitably as they can. A successful and profitable business in itself can be a tremendous contributor toward the common good of society. But if business leaders or department managers spend their time worrying about “doing good” for society, they will divert attention from their real objective which is profitability and running an efficient and effective organization.

Applying ethics in business makes good sense. A business that behaves ethically induces other business associates to behave ethically as well. If a company (or a manager) exercises particular care

in meeting all responsibilities to employees, customers and suppliers it usually is awarded with a high degree of loyalty, honesty, quality and productivity. For examples, employees who are treated ethically will more likely behave ethically themselves in dealing with customers and business associates. A supplier who refuses to exploit its advantage during a seller's market retains the loyalty and continued business of its customers when conditions change to those of a buyer's market. A company that refuses to discriminate against older or handicapped employees often discovers that they are fiercely loyal, hard working and productive.

It is my firm belief that a “good man or woman” who steadfastly tries to be ethical (i.e. to do the “right thing", to make appropriate ethical decisions, etc.) somehow always overtakes his immoral or amoral counterpart in the long run. A plausible explanation of this view on ethical behavior is that when individuals operate with a sense of confidence regarding the ethical soundness of their position, their mind and energies are freed for maximum productivity and creativity. On the other hand, when practicing unethical behavior, the individual finds it necessary to engage in exhausting subterfuge, resulting in diminished effectiveness and reduced success.

The best way to promote ethical behavior is by setting a good personal example. Teaching an employee ethics is not always effective. One can explain and define ethics to an adult, but understanding ethics does not necessarily result in behaving ethically. Personal values and ethical behavior is taught at an early age by parents and educators.

I am quite certain that well-educated business professional like Kenneth Lay, Martha Stewart, Dennis Kozlowski or the former CEO of General Motors who received a multi-million dollar salary and bonus package in 1987 at a time when the company was closing plants and was laying off thousands of people know and understand ethics. They either were too far removed from the “nitty gritty” that ethical standards did not resonate with them or they simply did not care.

People at the top of an organization are expected to share the burden of cost reductions and belt-tightening during difficult times. Senior executives of companies who freeze their salaries or take a personal pay cut in a problematic year rather than lay off employees to cut costs deserve our utmost respect. However, this does not mean that a company should lose flexibility in adjusting its cost structure during bad economical times, replace old factories by new ones, or change technology in ways that would require fewer people to do the work. Decisions like that should be made with empathy and support (financially) to those who will be affected by it.

The Critical Importance of Business Ethics For Effective Leadership

How important are business ethics to being an effective leader? According to the American Management Association, it is an important characteristic of effective leaders today. In a survey of 462 executives who were asked, “What characteristics are needed to be an effective leader today?” 56% ranked ethical behavior as an important characteristic, followed by sound judgment (51%) and being adaptable/flexible (47%).

However, with all due respect to the AMA survey, I strongly believe it is much more than “important,” it is a “critical, essential and non-negotiable” characteristic of an effective leader. Strong business ethics is a pillar of my strategic planning and strategic thinking business coaching efforts each and every day. Clients are encouraged to develop a set of core values and guiding principles and publish them for their clients and stakeholders to know that this is the way they do business. And furthermore, the clients are continually reminded to make sure the core values are demonstrated in all that they do. Examples of unethical behavior abound in business stories around the world. And individuals witness some form of unethical behavior in their workplace every day. Unethical behavior where people deliberately intend to harm themselves or others, develops from and is reinforced by, destructive states of mind, including fear, greed, anger and jealously. In contract, ethical behavior enhances the well-being of everyone because it ids developed from and reinforced by strong motives and emotions such as love, joy, generosity and compassion.

We need to ask these questions: “How ethically vulnerable is our company or organization?” “What are the core values and guiding principles of our company or organization?” “Are we committed to living and exhibiting our core values in everything we do?” The answers to these questions will define the state of ethics in our business.

Leadership in business must set the standard and “walk the talk” when it comes time to ethical behavior. There can be no compromise of ethics. There can be no “waiver of ethics.” A leader must constantly keep his or her actions above reproach. If leaders are committed to that high standard, there will be no more Enron, WorldCom, Tyco, and Adelphia ethical meltdowns.

Knowing what is right is very important to personal and business

ethics. Doing what is right is absolutely critical to personal and business ethics. A strong unwavering commitment to your core values and guiding principles of your business or organization will lead to the right ethical decisions and actions. In the absence of these actions, all one has is good intentions and that simply is not enough for effective leadership.

ETHICAL ISSUE: McDonald’s

OVERVIEW: SUCCESS OF Mc Donald’s

McDonald’s celebrated its 50th anniversary on April 15th 2005, and over those 50 years it has become the world market leader in fast food, with an annual turnover today of ‘approximately $40 billion worldwide’ (Smith, 2003). It has maintained a high level of performance throughout those 50 years and today is as successful as ever. For example, 2004 was the first year in the past 17 in which McDonalds tailed positive same store sales every month…while January 2005, total sales increased by 8.5%. Its trademark Golden Arches and Big Mac burger are today recognized in ‘30,000 outlets,

found in 119 countries, serving 47 million customers a day’ (McDonald’s Corporate Responsibility Report, 2004). Over the 50 years, ‘the McDonald’s Corporation has traveled from pioneer of a new and uniquely American eating experience, to icon of the global appeal of American capitalism, to perhaps one of the most despised corporate symbols in the history of private enterprise’ (Baker, 2005). The first McDonald’s restaurant opened on April 15th 1955, in Des Plaines, Illinois by an entrepreneur called Ray Kroc. Kroc had been attracted by a limited menu hamburger stand that turned out high-quality fast food at low prices, run by a pair of brothers, Dick and Mac McDonald. McDonald’s served more than 100 million hamburgers in the first three years and ‘the 100th McDonalds restaurant opened in 1959’ (Smith, 2003). Its success was unheralded, and the now famous marketing strategy was established by Kroc in 1963, with the Ronald McDonald clown character. McDonald’s television advertising was so successful that ‘by 1971 the Ronald McDonald clown character was familiar to 96% of American children’ (Baker, 2005). This exceptional marketing strategy has remained competitive today, as highlighted in Morgan Spurlock’s documentary ‘Super Size Me’ (2004), when more children recognize Ronald McDonald than a picture of Jesus or the American President George W. Bush. The success of McDonald’s was not just within the USA, but also globally, which became important when the US market became saturated. ‘The first British restaurant opened in 1974’ (Baker, 2005) and today there are more than 1200 restaurants in the UK, employing 73,000 people’ (Caterer-online.com, 2004). Success has also been found in a number of other countries, including Japan, Australia and Germany. In 2002, of McDonald’s annual worldwide sales of £25 billion, ‘35% came from Europe and 15% from Asia, Pacific and Middle East’.

ETHICAL CRITICSM FACED BY McDonald’s

Despite the obvious global success of McDonald’s, it reported a loss in 2002 for the first time since the 50s and experienced the rare phenomenon of some outlets closing. For example, in October, ‘pre tax profits slumped from £83.8 million to £23.6 million’ (Sweeney, 2004). Since its global expansion efforts in the 70s, McDonald’s has been shadowed by a wide variety of ethical issues, which ‘has spawned an entire industry of anti-McDonald’s protesters’ (Baker, 2005). These people have created events, such as ‘Anti-McDonald’s day’ every year on October 16th, and are the first to hit McDonald’s stores in London during the notorious anti-capitalist May Day riots. However, the incident which has done the most damage to McDonald’s ethical reputation was the ‘McLibel’ trial, where the company expected a quick conclusion to its action against activists who had distributed a pamphlet, What’s Wrong with McDonald’s?’. Instead it ran for two and

a half years and became the longest ever English trial, upon its completion in June 1997 (McSpotlight.org: The McLibel Trial, 2005). One of the main ethical criticisms consistently faced by McDonald’s over the last 30 years relates to the food offered in its stores. Critics claim that McDonald’s is a major contributing factor to the ever-increasing levels of obesity in the U.S. and other developed countries. Medical studies show that ‘waistlines are expanding faster in the UK than in any other European country…with 1 in 5 adults dangerously overweight’ (Walsh, 2003), while in 2001 it was reported that 300,000 deaths a year in the U.S. are related to obesity compared to 400,000 through cigarette smoking’ (McMans Depression and Bipolar Weekly, 2004). McDonald’s contribution is a result of the unhealthy nature of fast food. For example, a meal of a Big Mac and medium fries would provide you with ‘910 calories, as well as 46g of fat, 13g of which are saturated’ (McDonald’s.com, 2005). Considering the fact that this is half the Recommended Daily Allowance for a female adult, it is clear that McDonald’s does not meet U.S. dietary requirements. Apart from obesity, ‘diabetes, high blood pressure, heart disease and some forms of cancer are related to a diet high in fat, saturated fat, salt and sugar’ (Inside the McLibel trial, 1995). The impacts of a McDonald’s diet were clearly shown in Morgan Spurlock’s controversial film ‘Super Size Me’, where he ate nothing but McDonald’s for one month. Although this was an extreme example, the impacts on Spurlock were dramatic. ‘Spurlock gained 25 pounds, raised his cholesterol by 60 points, dropped his libido and turned his liver into pate’ (McMans Depression and Bipolar Weekly, 2004). He also experienced headaches and depression, and actually became addicted to the products. The impact of a McDonald’s diet on children is also a major ethical concern, as an increasing number of children are faced with obesity problems. ‘Every month, 90 percent of the children between 3 and 9 in America visit a McDonald's’ (Schlosser, 2001). McDonald’s has been criticised for exploiting children with advertising. They have traditionally aimed themselves towards children with collectable toys in ‘Happy Meals’, as well as colorful advertising campaigns and promotions in schools. Most criticized is the use of the Ronald McDonald clown character, which has been seen as a ‘cynical exploitation of children to use a clown to drum up business’ (Inside the McLibel trial, 1995). These marketing tactics contribute to the increasing unhealthy diet of many children. Stakeholders in a corporation may not only be human because animals are also seen as an important part of society and deserve the same treatment as humans. McDonald’s has been criticized for the way it treats animals before they are killed and turned into fast food. ‘The corporation is the world's largest promoter of meat-based products, the largest user of beef and the second largest user of chicken’ (McSpotlight.org: McDonald’s and Animals, 2005), and thus is faced

with the usual claims aimed at slaughterhouses. It is claimed that ‘chickens were crammed into sheds with less than one square foot of space per bird and no daylight’ (Inside the McLibel trial, 1995). As a result, ‘44% had leg abnormalities and other health problems’ (Inside the McLibel trial, 1995). This treatment was not just reserved for chicken but also other animals involved in McDonald’s fast food products. 40% of piglets were held in indoor breeding units, and half had tails docked for no apparent reason’ (Inside the McLibel trial, 1995). Ethical criticism is also aimed at the methods for killing the animals. ‘14% of chickens received pre-stun shocks, which caused undue stress, while 1% (1,350 per day) were decapitated before being stunned’ (Inside the McLibel trial, 1995). As well as social ethical issues, corporations must also consider environmental ethics, which means treating natural resources not just as commodities, but as part of the ecological whole. It is important because it affects the image of the company and consumer’s perceptions. For example, ‘a Wall Street Journal poll in 1991 claimed that 53% of people avoided purchasing a product because of environmental concerns about a product or manufacturer’ (Hawken, 2002). The most famous environmental issue is the suggestion that McDonald’s has destroyed hundreds of acres of Brazilian rainforest to make way for large-scale cattle ranching. This not only removes a valuable natural resource, but also has an impact on global warming, as the rainforest is an essential mechanism for the absorption of Carbon Dioxide in the atmosphere. McDonald’s also ‘annually produces over a million tons of packaging used for just a few minutes before being discarded’ (McSpotlight.org: Environment, 2005). Traditionally a number of ozone depleting gasses were used in polystyrene foam packaging. In the 21st century, McDonald’s uses almost all recycled packaging. However, the company still faces criticism due to the amount of waste it produces. ‘Each of McDonald’s US restaurants produces 238 pounds of waste per day and each of its U.S. regional distribution centres disposes of another 900 pounds of waste per day’ (Svoboda and Hart, 1995). This is not only expensive to dispose of, but also difficult when considering that similar quantities of waste are being produced around the world. McDonald’s also experiences internal ethical issues related to the working conditions and treatment of employees. ‘McDonald’s employs over 1 and a half million people worldwide, over half of them under 21 years old’ (McSpotlight.org: McDonald’s and Employment). McDonald’s has adopted ‘age differentials between adult and younger workers, meaning that they pay most of their employees less than the normal adult minimum wage’ (Transport and General Workers Union, 2004). For example, McDonald’s pays some 16-year olds as little as $6.80 an hour. McDonald’s employees also experience poor working conditions with discrimination, illegal working hours, and poor safety conditions.

There is little that can be done about this due to the absence of trade unions, within McDonald’s, to represent staff. If Milton Freeman’s theory of stakeholders is adopted, the needs and expectations of staff are just as important as those of customers.

“SUPERFICIAL” ACTION TAKEN AGAINST CRITICISMS

The range of ethical criticisms leveled at McDonald’s throughout the world has been well-publicized. However, many of these issues were first raised in the 1970’s before tighter regulation was imposed and unethical behavior became a hot topic. After 30 years of criticism, it is important to look at what measures McDonald’s has taken to improve its ethical conduct and how far this has been successful. McDonald’s claims that ‘being a good citizen has been inherent in the company since its inception’ (Schlosser, 2001). Ray Kroc believed McDonald’s had an ‘obligation to give back to the community that gives so much to us’. This was rooted in his founding principles of Quality, Service, Cleanliness and Value. Since 1955, McDonald’s has continually made statements about its conduct to try and reassure shareholders and stakeholders. However, nothing was said or published about what attempts were actually being made to ‘do the right thing’. This finally changed in 2002 with the release of McDonald’s first Social Responsibility Report. The report was composed of 46 pages, which began with McDonald’s core values and then looked at the impact of McDonald’s in different areas, such as community and the environment. It showed that McDonald’s has invested in the Ronald McDonald housing program to

house families with seriously ill children, and documented the efforts made to reduce McDonald’s impact on the environment. For example, there was ‘a commitment to spend $100 million annually on the use of recycled materials, especially in the building and renovation of its restaurants’ (Svoboda and Hart, 1995). Overall, the report was ‘a clear statement of intent about its future works in this area’ (Wood, 2002). Although it was an attempt at social reporting, the 2002 report was ‘a low-water mark for the concept of sustainability and the promise of corporate social responsibility’ (Hawken, 2002), and its generality, as well as its vague nature meant it was simply a ‘walk around the issues’ (Wood, 2002). It was seen by many as a PR stunt, which was created to appear like McDonald’s was meeting the requirements of an increasingly demanding society. The content of the report was criticized because it focused on issues and areas where McDonald’s had been successful, but did not mention well-publicized issues, such as obesity. Similarly, it neglected to mention a number of the company’s major environmental impacts. For example, the report ‘talked about water use at the outlets, but failed to note that every quarter-pounder requires 600 gallons of water’ (Schlosser, 2001). This distinct lack of transparency enabled McDonald’s to cover up any bad issues and only show what they wanted the public to see. The key problem with the 2002 Responsibility Report was that ‘due to its decentralized nature, McDonald’s was unable to provide any of the data that is looked for as core information in their report’ (Wood, 2002). In its report, McDonald’s stated how much money it had provided for social improvements, but no figures on what impact these improvements had. Similarly, there was very little information related to the measurement of environmental impacts and improvements. This meant that the report was written as a narrative, rather than a social report. The effectiveness of the report was also reduced by the fact that there was ‘no comparative data on past and present performance’ (Strategic Direction, 2002). The final nail in the coffin for the report was the fact that ‘there was no independent verification’ (Strategic Direction, 2002), which meant that stakeholders could not even have a guarantee of the accuracy of the report. These negative factors meant that the first McDonalds Social Responsibility Report was ‘was an impressive statement of intent, but it recognised that the company was not yet ready to report progress’ (Wood, 2002). Despite the criticisms of the report, McDonald’s was satisfied with the result, believing it portrayed the company in a good light and showed stakeholders that McDonald’s met societies needs. However, in the 2 years following the reports release, McDonald’s experienced its worst financial results in almost 20 years. This was a result of increasing criticism from publications and documentary’s, such as Super Size Me, as well as an increase in lawsuits from over weight teenagers in America, who blamed McDonald’s for health problems. The result was

the second McDonald’s Social Responsibility Report in 2004, McDonald’s current source of ethical information for stakeholders, which ‘introduces a new accountability structure’ (Cochran, 1994). The colorful report is double the size of the 2002 edition, with 88 pages, and is a significant improvement, addressing many of the ethical issues which have shadowed McDonald’s for the last 30 years. The report says that ‘being responsible is one of our greatest competitive advantages’, even though the issues it tackles are growing ever more complex’ (Allen, 2004). The 2002 report made little mention of McDonald’s food, and failed to recognize the ethical concerns associated with it. However, in the current report, ‘food takes top billing’ (Allen, 2004), with the first 12 pages of the main analysis allocated to ‘Food’. The company highlighted efforts to offer healthier options, including salads on its menu, and revealed how they had brought in a full time nutritionist to alter the menu. Possibly the most poignant move was to phase out the ‘Super Size option’ in all restaurants. McDonald’s have also ‘added new options to Happy Meals for children, so fries can be substituted for healthy alternatives like apple slices’ (Allen, 2004), and offers milk, fresh orange and water instead of soda. McDonald’s new stance also involved ‘promoting the importance of exercise’ (Allen, 2004). On page 8 of the report there is a picture and statement by a professor of exercise at Leeds Metropolitan University, who reinforces McDonald’s stance, aimed at helping children lead healthier lives. The section on the environment is also more substantial, with a variety of figures on packaging and waste. For example, ‘McDonald’s achieved a 3.2% reduction in packaging during 2003’ (McDonalds Corporate Responsibility Report, 2004). This is combined with a section, which shows McDonald’s commitment to improving the environmental performance of suppliers. This includes a statement that ‘McDonald’s will not purchase beef from rainforests or recently deforested rainforest land’ (McDonalds Corporate Responsibility Report, 2004), acknowledging one of the specific ethical criticisms aimed at McDonald’s. McDonald’s also shows its commitment to reducing animal cruelty from suppliers by increasing supplier accountability and ‘conducting nearly 500 audits at beef, pork and chicken processing facilities around the world’ (McDonalds Corporate Responsibility Report, 2004). The content of this report shows that the company is beginning to acknowledge and account for the unethical stories recounted by critics. A key example of this is the website ‘Super Size Me: The Debate’, which was set up by McDonald’s to show how they have made improvements in their menu and give advice to customers on products. The Corporate Responsibility Report is written by McDonald’s Corporate Responsibility Committee, who ensure that all the political and social requirements are met by the corporation. This is supported

by a code of business conduct, which has been in place and updated regularly over the last 35 years. This is the main framework for employee ethics and it is used to ensure that the internal ethical requirements are met, such as a safe working environment, equal opportunities and employee rights. There is also a code of conduct for the board of directors, which shows ‘their commitment to ethical practices’ (McDonalds Corporate Responsibility Report, 2004). The 2004 Corporate Responsibility Report, and codes of business conduct are all written in a similar style, with emphasis throughout on ‘Responsibility’. This word is used numerous times to show that McDonald’s doesn’t feel it is an obligation, but that it is their responsibility given to them by virtue of being in a powerful position. This word can be applied not only to show external shareholders that the company appreciates it is responsible for their well being, but also to reinforce the notion to staff internally that they must be responsible for ethical conduct in all aspects of their work.] Despite the marked improvements in ethical conduct, there are still criticisms that can be leveled at McDonald’s. The 2004 Corporate Responsibility Report is still limited by the fact that it is qualitative, rather than quantitative. It does have some statistics, but there is a need for more, particularly when looking at improved performance. The employee section is dominated by claims of diversity, but little is said about how conditions have been improved or pay structure and age breakdown of staff. ‘As noted in the Lampe-Finn model, it is little more than a means to maintain the status quo while creating images of ethical behaviour’ (Lampe and Finn, 1992). The report uses bright colors and external partners to emphasize its importance, but really it is merely another piece of corporate propaganda designed to satisfy the majority of stakeholders with minor concerns. It attempts to portray itself as being a corporate citizen, but without the transparency that is necessary to achieve this view. The only parts of the company which society gets to see are those chosen by executives to support their opinion of how the company should be portrayed. There is still an absence of evidence to prove to strong opposition that change is really occurring. This is probably a result of the fact that McDonald’s does not have an ethics department or ethics officer. It simply has codes of conduct, which are produced at the top level by directors. The result of this is that because the directors are not experts in ethical conduct, many of the ethical issues are simply covered over by well-publicized, but unsuccessful schemes, and many of the needs of stakeholders are not met. Over the last 10 years, McDonald’s appears to have successfully met its social responsibilities. Its vibrant 2004 Corporate Responsibility Report shows that the menu has been enhanced with healthy options, which reinforce McDonald’s public aim to increase the healthiness of its customers. The company has increased recycling and reduced

waste in stores across the world, while attempts have been made to improve the standards of its suppliers. This has led to McDonald’s taking top position in marketing firm GolinHarris’s second annual citizenship survey. The most amazing fact is that this has been done in a way that also meets Friedman’s requirement of meeting needs of shareholders by increasing profits.

CONCLUSION

However, when looking deeper into McDonald’s attempts to improve its ethical conduct, it becomes clear that McDonald’s has ‘offered progressive rhetoric but not changed its internal practices or impact on society and the environment’ (Hawken, 2002). Much of its attempts are descriptive and based around meeting future goals. This has a lot of potential, but very little is said about what has been achieved at the moment. The absence of statistical figures means that most of McDonald’s attempts at ethical behavior can and will be questioned by numerous books, documentaries and websites. It is important to remember that ‘McDonald's publicly embraces "sustainability" as long as it can make money’ and many of its ethical attempts are aimed at persuading the public that the business is ethical, rather than ensuring that it is. McDonald’s success looks set to continue into the future. This has been achieved despite facing constant pressure from critics about its operating practices. As a result, it seems very unlikely that McDonald’s methods of publicizing ethical attempts will change, especially considering the money which would be required. If there was a shift towards full corporate social responsibility, there is a need for an ethical officer and ethics department, comprised of experts who can subjectively analyze the performance of the company and set accurate objectives. There is also a need for full transparency so that the public can be assured that the company is ethical. It would need to reveal ‘the externalities born by other people, places and generations’. Until any radical internal changes are made, the poet Henry Thoreau best describes McDonald’s corporate initiative: “Improved means to an unimproved end”.