McDonalds Corp as a Best Corporate Citizen - Case Study Example

? McDonald’s Corp as a Best Corporate Citizen of (08.11.11) Introduction CR’s 100 Best Corporate Citizens List makes ranking of companies on thebasis of public information relative to seven very important categories that relate to parameters such as governance, environmental impact, financial performance, employee relations, philanthropy, human rights and climate change. Amongst these, maximum importance is given to employee relations and environmental impact because these are the aspects that employees, stake holders and consumers are most concerned about. This paper researches the activities of McDonald Corporation, which appears in the CR’s 100 Best Corporate Citizens List for 2010. The idea is to ascertain the strategies of the company that allowed it to earn this status and to write about its socially responsible business activities. The paper will outline how McDonald’s activities improved its sustainability in contributing towards making the world a better place. A discussion will be made of the company’s specific business values that motivate its activities relative to accountability, transparency, and employee engagement for improving sustainability. The paper will also focus on what further innovations the company might make to continue to improve sustainability. McDonald’s Corporate Social Responsibility For the last several years, McDonald’s Corporation has been setting examples of corporate social responsibility (CSR), which primarily includes the creation of a sustainable supply chain system and engagement in community based developmental projects. CSR basically relates to a company’s behavior whereby it behaves in a social and responsible manner and deals with other businesses that adopt the same policies. With the increase of public awareness, recent years have seen increasing demand for socially responsible businesses, which is why contemporary companies give importance to CSR while making plans for socially responsible business processes. It cannot be doubted that McDonald’s Corporation has excelled in the implementation CSR practices in most of its functions across its offices throughout the world (McDonald's, 2011). In being the world’s biggest chain of fast food restaurants, McDonald’s considers that CSR is about taking concrete action, accomplishing results and sustaining openness in communicating with consumers and other major stake holders. The company closely collaborates with its suppliers in promoting socially responsible systems within the supply chain in keeping with its supply chain policy and complying with its larger strategy based Framework for Corporate Social Responsibility. McDonald’s has clearly stated on its CSR website that it abides by its code of conduct prescribed for suppliers, which explains how the company requires its suppliers to deal with their workers. In keeping with its supply chain strategy, McDonald’s will carry forward its policy of social accountability across all its supply chains. It has already been successful in improving conditions of farm workers in several locations who in turn promote positive environmental systems in land based agriculture supply chains, thus creating sustainability in agricultural activities. For instance, by inroducing industry leading growing standards for tomato farmers in Florida, McDonald’s made improvements in the working environment of tomato growing establishments and transformed them into sustainable businesses. Community Involvement through Community Based Projects One of the approaches to engage in CSR is by adopting community based developmental projects. Community driven and community based developmental projects are considered important forms of providing development support by international socially responsible organizations. Economic relationships in this regard mean the adoption of strategies involving the larger community in the main business activities of the organization. This allows communities to become effectively involved in corporate supply chain strategies thus creating sustainable businesses. Examples of these practices are McDonald’s initiatives in Europe’s progressive farms that employ innovative farming strategies in many regions of the continent. McDonald’s also conducts research activities relative to the ways in which ethically sound farming processes can be adopted in commercially viable farming practices. In Europe, McDonald’s has also introduced sustainable fishing programs that focus on high standards of sustainability. Additionally, McDonald’s has been donating a part of its pre tax profits towards corporate philanthropic activities in keeping with its objectives of being more socially responsible. The company makes charitable donations through its subsidiary Ronald McDonald House Charities that aims at creating, finding and supporting agendas that directly focus on improving children’s health and welfare. The subsidiary aims at ensuring that children living in susceptible communities get the best possible dental and medical treatments in order to build up their health and make the entire family stronger. This initiative has gone a long way in improving the lives of children in vulnerable communities while also improving the status of the entire community. Governance and Ethics McDonald’s is committed to sound ethics and good governance in maintaining its position as a company that can be trusted by people. There is a close intersection of interests amongst the company’s Board of Directors, its management team and its share holders by way of values that have been the basis of McDonald’s Corporation for over fifty years: Integrity Fairness Ethical Behavior The starting point of McDonald’s good governance is exemplified by the company’s Board; it is provided with total independence in being able to remain open and constructively engaged with management functions relative to all facets of the business. McDonald’s Corporate Responsibility Committee is an advisory body that advises the management about strategies that influence the company’s functioning in terms of social responsibility. It also looks into issues relating to consumers, diversity, employee growth, the environment, health and safety and the communities that McDonald’s does business with. McDonald’s Worldwide Corporate Relations Council gives guidance and coordinates on matters relating to the company’s communication, strategies and positions in the context of social and environmental matters and the actions that have to be taken in this regard. The Corporate Responsibility Department is responsible for providing and facilitating corporate support, coordination and employee leadership for the company’s policies of corporate social responsibility. McDonald’s Quality Assurance Board is responsible to ensure through its food safety and supply chain specialists and QA Directors that are stationed in the main geographical sectors, to develop and organize execution of global food quality policies and food safety. The Sustainable Supply Steering Committee is responsible for guiding and developing strategies and systems of achieving the company’s mission of maintaining a sustainable supply chain. McDonald’s Global Environmental Council finalizes the international strategy of environmental priority and takes action for sharing best practices about locally viable environmental programs. Need for Improvement Success for any organization does not only mean good results because more innovative ideas are needed to be implemented by McDonald if it wants to increase its contribution in making the world a better place. The company’s standards of business conduct do provide a basis for making innovations in living up to the company’s responsibility levels (Hollender and Breen, 2010). The biggest challenge for McDonald is to move further towards its vision of sustainable supply practices because so far it is not directly doing business with many divisions of its huge supply chain. The need is to introduce proactive policies whereby a positive impact is made on consumers if NGOs, governments and industry representatives are more involved in the CSR programs. The supply system should be made more sustainable, efficient and safe. McDonald should further guide and communicate with suppliers to adopt sustainability and develop its own international forestry strategy that will be applicable to all products purchased by buyers. A proactive approach should be adopted in framing strategies to measure the effect of the environment on the company’s supply chain. The company should continue in finding better ways to increase energy efficiency in its restaurants and integrate better environmental factors in the design of packaging material. In fact, McDonald can use its international forestry models in its consumer packaging material as well as expand such practices in other areas of its operations such as Africa, Middle East and Asia. In regard to employee motivation, McDonald should enhance the number of restaurant managers holding requisite degrees and improve the company’s values into more people, which is possible only if its HRM takes more initiatives in the recruitment, training and career development stages. Although McDonald’s continues to grow as a business, it needs to find better ways in balancing operating hours and menu offerings in its different markets. The company still has a large number of business opportunities but there has to be a balance struck between cost efficiency, financial responsibility and environmental protection. Waste generation and energy use are the two most pertinent issues to be dealt with by the company in terms of its restaurant operations. McDonald’s must strive towards reducing these impacts, which will result in declining operating costs. Another challenge for McDonald’s is to keep up with its commitment towards its people who work day in and day out in its demanding and eventful restaurants. In this kind of environment it becomes very important to constantly make improvements in the working conditions and environment in which employees work. McDonald’s will stand to gain from several perspectives if it looks for better opportunities for supporting the community. It needs to encourage its franchisees across the world to get involved in community development. Independent franchisees have immense potential in carrying forward McDonald’s vision towards achieving its corporate governance and social responsibility objectives. Works Cited McDonald's.  2010 Corporate Social Responsibility Report, 2011 http://www.aboutmcdonalds.com/mcd/csr/report.html, Accessed on 08 November, 2011. Hollender, Jeffrey., and Breen Bill. The Responsibility Revolution: How the Next Generation of Businesses Will Win, Jossey-Bass, 2010. Read More