McDonald’s: Using Unsafe Meat(2014)

A McDonald's fast food restaurant, located in China

Controversy
In 2014, McDonald’s were exposed by a reporter on Dragon Tv in China that secretly filmed employees inside of a processing plant located in Shanghai called Husi Food. The employees were caught picking the meat off the ground that had been dropped and continuing to process it along with the rest of the meat using their bare hands. It had also been discovered that these employees removed the date from the packaging of expired meat and assigned a new date. The expired meat was then supplied with the new meat. This plant is run by OSI Group which is a company that supplied meat to McDonald’s since their beginning. “Amongst the tainted products, they were able to trace forged production dates on more than 4,300 cases of smoked beef patties, with more than 3,000 cases already sold”(Li). As a result of this report and investigations that followed, a ban was issued on some chicken and beef products of the McDonald’s menu in China. Some large fast food chains like Burger King and KFC decided to cut their ties with OSI Group while McDonald’s continued to support them.

Stakeholders
The stakeholders of this McDonald’s scandal are OSI Group, the employees in the plant, customers of McDonald’s, and the executives of both OSI Group and McDonald’s. OSI Group is one of the big stakeholders because this situation gives a very bad image to everyone. They also lost several of their clients due to the controversy while also fighting to keep McDonald’s with them. Some of the employees at the plant lost their jobs and faced jail time. Most of the customers that are affected are the ones in China because the meat that was supplied from this plant only was distributed throughout China. The other customers around the world are still affected even though they haven’t consumed these foods. This scandal could change their minds on whether they want to continue purchasing McDonald’s products. The executives had to make big decisions on how to resolve the situation and how they were going to move on in the future.

Photos of unsanitary treatment of McDonald's meat

Individualism
The theory of individualism is to maximize profits for the owner within the law (Salazar 17). In this case, laws were broken. Those employees might have had profits for the owner on their mind when they were performing those actions but it was unlawful, which goes against individualism. They were being careless and not thinking about the impact that food would have on consumers. This scandal hurt their stock price. They started off the month of July 2014 at a quote over 100 and they didn’t reach the 100 mark again until May 20th of 2015(NASDAQ) Their net income went from $5.55B in 2013 to 4.82B in 2014(Annual Report). McDonald’s have the right to continue to support the OSI Group but they are equally liable for the actions of the employees at the plant. “Local plant documents and rules weren’t translated from Chinese into English, and even if they had been, OSI’s American managers didn’t often visit” (Cendrowski). McDonald’s negligence of verifying that everything was running smoothly is as big as the actions of the plant employees. There was nothing in place that would have stopped this if the reporter didn’t find out. This idea of using meat that shouldn’t have been used did not increase profits for the owner and it did everything opposite of the theory of individualism.

Utilitarianism
Utilitarianism deals with the idea of maximizing the overall good for stakeholders. It has changed the idea of just focusing on the owner and profit of the company. The company said it pursues "strict compliance" with consumer safety laws and regulations and has "zero tolerance for illegal behavior" (AP). They have proven that they do care about food safety by working with authorities to make arrests. Why were they not supervising these plants often if they have zero tolerance for illegal behavior? It’s one thing to say that you have zero tolerance for this type of behavior but it is different to have a system and a setup where actions like these happen at an almost impossible rate. “Chicken, pork, and other companies have grappled with a spate of food-safety scandals in China in the past decade” (Jargon and Bunge). If these situations are not a random occurrence in the last couple of years then McDonald’s should have been more prepared to prevent this issue.

McDonald's headquarters in Oak Brook, Illinois

Kantianism
Kantianism has the idea of being honest, truthful, and respectful. In this case, McDonald’s didn’t hide that there was a problem. They acknowledged it and started dealing with it right away. There have been many situations where most companies will go into a defensive mode when a scandal comes out but McDonald’s did act in a Kantian way in terms of acknowledging the issue. Kantians believe that "our fundamental ethical duty is to treat people with respect, to treat them as equally capable of living an autonomous life" (Desjardins 38). The employees in the plant, on the other hand, did not act in a Kantian way. No one ever spoke up about these acts. The only reason this was discovered was because of someone secretly filming it. The employees were not honest and they were deceiving consumers that this meat is produced at the highest quality.

Virtue TheoryVirtue theory is about fulfilling your purpose and potential to the max.“Any character trait that aids flourishing is a virtue and any character that inhibits flourishing is a vice” (Salazar 23) The employees of this plant run by the OSI Group were taking actions that weren’t helping anyone. It might have helped them finish their work faster or helped decrease waste but it could have harmed someone. “Ethics requires us, at least at times to act for the well-being of others” (Desjardins). They were not thinking of the consequences of their actions. The employees were using these unsanitary techniques in order to benefit themselves. One of the biggest problems is that this could have been going on for months and no one noticed until a reporter secretly filmed it all. Somewhere within the hierarchy of the plant, there was a collapse in morals which caused these employees to supply meat that is not up to standard.

Justified Ethics Evaluation

McDonald's meat in China

McDonald’s actions in this controversy were unethical. They did not take safety seriously and it ended up hurting them. They didn’t do their dishonesty inside these processing plants if there were unethical actions happening. The way they dealt with the situation after the report came out was correct. They acknowledged the issue, started investigating and had a plan to fix it right away. Their decision to defend and stay with OSI Group is understandable since they began their business with each other. The support of McDonald’s throughout this situation will definitely help OSI Group sort out the problems they had in the region.
each on food safety in China which caused negligence of supervision inside these plants. They should have known there were problems in China with food safety and they should have increased the surveillance of the plants. They are lucky that they didn’t face a huge lawsuit and that no deaths have come out from this. It’s not acceptable for a company of this magnitude to not be prepared for these situations. This could have all been solved with more visits to the plants by either McDonald’s or OSI Group. There should have been more

Don Thompson, former CEO
and President of McDonald's

Action Plan

The negligence of safety is the biggest issue which caused this situation to occur. There were not enough visits to the processing plants. The corporate executives were not paying attention to the safety procedures that were going on in China. “OSI was clueless because the private company gave managers a lot of autonomy” (Cendrowski). Giving managers a lot of space in any kind of plant where everything has to be done the same way is never a good idea. You are giving the employees the ability to be creative in their methods which are not useful in these situations. You want your employees to be creative but not when products are supposed to be made the same way. Even though these plants are owned by OSI Group, McDonald’s should have been more involved because the operations inside the plant are directly affecting their customers. Our mission statement should be “Providing satisfaction to our customers by serving reliable products using a dependable forward-thinking approach.” This stresses that we will act with purpose and not just with words. It’s one thing to say you are going to do something but it is different to actually do it. The company needs to take more actions that show they actually care by preparing instead of just stating that they have zero tolerance for illegal behavior. The core values that McDonald’s should have are honesty, dependability, integrity, and to exceed expectations. There needs to be a safety director of China which focuses only on the protocols taking place in the Chinese processing plants. It would also be a good idea to promote the manager that had the highest safety scores in the last two years of a processing plant in order for that manager to help the safety director in organizing these plants to be successful in the future. A good way to market the company and refocus the attention into something more positive is to think of a new meal that is going to be the healthiest item on the menu. The new meal is going to increase profit as well as bring customers into the doors that were looking for healthier choices. It conforms to the mission statement and core values by looking to provide a healthier option for the customer. We should market this new product with advertisements like commercials.

References

Trefis. "McDonald's Faces Declining Sales In Asia After China Food Scandal." Forbes. Forbes

Magazine, 11 Sept. 2014. Web. 16 Sept. 2016.

Cendrowski, Scott. "Why McDonalds’ Supplier Failed in China." Fortune Why McDonalds

Supplier Failed in China Comments. Fortune, 01 Sept. 2014. Web. 16 Sept. 2016.

Wong, Venessa. "McDonald's Says China Expired Meat Scandal Will Dent Global

Sales." Bloomberg.com. Bloomberg, 4 Aug. 2014. Web. 16 Sept. 2016.

AP. "China Supplier Sold McDonald's, KFC Expired Meat." USA Today. Gannett, 21 July 2014.

Web. 16 Sept. 2016.

Jargon, Julie. "McDonald's Stands By Meat Supplier in Crisis." WSJ. Wsj.com, 24 July 2014. Web.

16 Sept. 2016.

Li, Zoe. "China's Tainted Meat Scandal Explained." CNN. Cable News Network, 30 July 2014.

Web. 16 Sept. 2016.

Channick, Robert. "China Arrests 6 in McDonald's Meat Safety Scandal."Chicagotribune.com.

N.p., 30 Aug. 2014. Web. 16 Sept. 2016.

"McDonald's Corporation Common Stock Historical Stock Prices." NASDAQ. N.p., 16 Nov. 2016.

Web. 16 Nov. 2016.

McDonalds, 2014 Annual Report,March 2015.PDF. 16 Nov. 2016.

Salazar, Heather. The Business Ethics Case Manual ,Web. 16 Nov. 2016.

DesJardins, Joseph R. An Introduction to Business Ethics. New York, NY: McGraw-Hill Higher

Education, 2009. Print.