Burger King's Position on Ethics - Case Study Example

? Burger King’s Position on Ethics Burger King’s Position on Ethics Burger King is a successful firm, the second largest fast food hamburger chain at the global level operating in over 12,300 locations, in 76 countries, and serving more than 11 million customers on a daily basis (Burger King, 2011). The large size of the Burger King brand - involving a broad customer and supplier chain - makes the firm vulnerable to pitfalls arising from ethical considerations. This study will detail the company’s position on ethics, discussing both internal and external aspects of the position. Guiding Documents First, Burger King has ethics policy documents guiding aspects of the firm’s operations. One of the four documents is the Code of Business Ethics and Conduct which guides the overall firm operations. Through this policy, Burger King commits to “…taking no ethical shortcuts of any kind. Integrity and honesty are simply not optional” (Burger King Corporation, 2009). The other one is the Code of Business Ethics and Conduct for Vendors that guides vendors on internal and customer relations to ensure ethical practices. The Code of Conduct for Directors is Burger Kings third ethical policy document. This document details the ethical execution of the directors’ roles in the firm. The last document the Code of Ethics for Executive Officers (Appendix 1) also explains how the senior management at Burger King ought to execute their functions in an ethical manner. The document acknowledge the special challenges posed by occupying leadership positions and the ethical dilemmas faced, and then details the steps that ensure ethical carriage of duties. Together, these four policy documents exhaustively establish Burger King’s position on ethics in all the firm’s operations (Investor Relations, 2009). Ethical Public Position Surprisingly, Burger King does not expressly adopt a public position on ethics in an age where public positions on ethics are an integral part of firms’ CSR initiatives and marketing campaigns. Scrutiny reveals that Burger King’s Vice President, who heads ethical operations of the firm, is also a public lobbyist for the company (SoundWatch, 2011). This would mean that the ethical inclinations of the firm reach the public through the lobbying. Burger King’s budget on Lobbying is considerably high- $135,289 in 2010- from which we can discern maintenance of a public position on ethics through the connection of the Vice President heading ethics and being a lobbyist. However, Burger King concentrates on internal mechanisms to ensure ethical operations and does little on a public ethics position. This is a major fail on the part of the firm as issues on ethics are largely swayed by the public’s perception. Internal Guidelines The internal guidelines on ethics revolve around guiding matters of inclusion and diversity, conflicting interests, data privacy, financial reporting, food and drink safety and quality, hiring practices, communicating with the outside world and protecting the environment among other important aspects. The internal guidelines aim at ensuring ethics forms an important part of Burger King’s company culture and hence are exhaustive, covering all possible aspects at which ethical considerations and dilemmas may arise. These Codes of Ethics policy documents for the different levels of workforce- employees, vendors, directors and executive officers- effectively cover aspects of employee-employee and employee-public interactions. Defined Process The Burger King Corporation (2009) details the internal process to follow in case of a breach of ethics; first, each employee has to understand the firm’s ethical policies. In cases where an employee discerns a breach of the firm’s ethical policy, he/she should report to the chief of ethics, compliance officer, human resource representative or attorney from the law department. Such information will only be disclosed to the relevant parties, with the reports taken seriously and promptly investigated. However, the firm’s policy does not provide a process for the public to report or make inquiries about ethical issues since a public ethics position remains largely absent. Training and Retraining Burger King has an integral training approach that, among other things, ensures the employees are aware of the company’s ethics policies to guide their operations. Along with other professional training, the firm ensures that the culture of bold, accountable, empowered and fun instill into the employees through training and development programs and weaving it in the code of ethics (Burger King Holdings Inc., 2007). However, the firm does not mention training that specifically concerns ethics, instead making ethics an integral part of all training activities. The report does not mention any form of retraining. This, in my opinion, should be expressly stated to ensure that Burger King’s employees are aware of emerging ethical issues and dilemmas especially in the heightened informed consumerism of the contemporary world. Global Approach As a global economical player, Burger King seeks to send a consistent global message about the ethical inclination of the company. First, the company respects the cultural backgrounds of the countries in which the firm operates. The firm has also established a global data privacy program to appropriately protect personal information about employees, suppliers, franchises, business partners and customers. All employees ought to uphold accountability when committing or acting on behalf of Burger King. The need for a consistent message is underpinned by the requirement to have the global communications department approve all public engagements made by Burger King (Burger King Corporation, 2009). Again, failure to adopt a public position on the global stage, instead concentrating on internal ethical mechanisms is clearly evident. Interviews The requirement on engaging the public extends to the issue of interviews. All statements on the record or off the record in interviews have to be approved in advance by the global communications department. In case of questions about the company’s position on a public issue, the employees should explain that company policy restricts them from commenting on behalf of Burger King (Burger King Corporation, 2009). While these conditions may appear quite top-down in approach and restrictive, the importance of such an approach is of no doubt. Burger King is a big global player interacting with different stakeholders from different backgrounds and thus different dispositions and situations. The firm would need such strict and standard policy to avoid slip ups. Examples of the process at work...supplied by whom? A number of scenarios depict the carriage of ethics functions in Burger King’s operations. For example, the Burger King Corporation (2009) depicts a situation where a promotion delay occurs as toys to be used are stuck at the customs office. The question is whether an employee that provides a small gratuity to the Customs Inspector to speed the process is ethical. The firm’s policy on such a situation strongly advises that this is indeed unethical. The firm does not permit provision of gratuities to state officers to execute their duties. Impressively, the firm advises any employees in doubt to contact the law department for legally acceptable and ethical ways to speed up a stalled process. This exemplification is clearly supplied by the company’s Code of Business Ethics and Conduct. Updating and Formation Burger King does not expressly state how the firm arrived at the codes of ethics and how they update such codes. However, one discerns that the firm does not rely on outdated ethics policies as they all fall within the last five years as shown; the Code of Business Ethics and Conduct dates 2009; the Code of Business Ethics and Conduct for Vendors dates 2008 while the Code of Business Ethics and Conduct for Executive Officers dates 2007. Personally, I would advise that the process of formation and updating be included in the policies to embody the spirit of commitment to ethics. Other Items of Interest There are a number of items of interest in Burger King’s position on ethics. First, the firm clearly seeks to make ethics a core component of the True North company culture and company philosophy (Bold, Accountable, Empowered and Fun). As the Code of Ethics and Conduct strongly states, there is no compromise to issue of ethics and each employee has to be ethical. Further, the company exhausts all aspects of its operations in which ethical issues and dilemmas may arise; thus, policies are generated for all levels of staff including the overall workforce (Code of Ethics and Conduct), the vendors (Code of Business Ethics and Conduct for Vendors), the executives (Code of Ethics for Executive Officers) and the directors (Code of Conduct for Directors). This is impressive and provides a template that both large and small firms can follow to get it right when it comes to ethics. Another interesting note on Burger King’s ethical inclination can be discerned from Source Watch, an independent organization acting as a watchdog for global corporations. According to Source Watch, Burger King has had problems with farm workers on raises to the prices of supplies. In the process, accusations of smearing farm workers on online platforms have been attributed to the company’s Vice President, who ironically serves as the head of ethics at the firm. There exist accusations of espionage on farm workers and farm worker platforms. Interestingly, at no point does the firm appear to handle this ethical issues, for instance through the formation of an investigative taskforce. References Burger King (2011). Company information. Retrieved from http://www.bk.com/en/us/company-info/index.html. Burger King (2009). Corporate responsibility report: People. Retrieved from http://www.bk.com/cms/en/us/cms_out/digital_assets/files/pages/BK_CR_Report_People.pdf Burger King Corporation (2009). Code of business ethics and conduct. USA: FSC. Burger King Holdings Inc. (2009). Code of ethics for executive officers. Retrieved from http://media.corporate-ir.net/media_files/irol/87/87140/CodeEthics_5.2007.pdf Investor Relations (2009). Corporate governance: Overview. Retrieved from http://investor.bk.com/phoenix.zhtml?c=87140&p=irol-govhighlights SourceWatch (2011). Burger King. Retrieved from http://www.sourcewatch.org/index.php?title=Burger_King Appendix 1: Burger King’s Code of Ethics for Executive Directors Source: Burger King Holdings Inc. (2009). Code of ethics for executive officers. Retrieved from http://media.corporate-ir.net/media_files/irol/87/87140/CodeEthics_5.2007.pdf Read More