In modern times, ethic management and governance are extremely important to achieve sustainable development and long-lasting success of a corporation in the globalized market. Most of McDonald’s restaurants provide the services of counter and drive-through. Due to the services, customers could choose to have burgers in restaurant or to take the food away without going off their cars. Besides the advanced operation, McDonald’s also pays attention to ethics.
The present paper is intended to analyze the ethics and governance of McDonald’s in Australia through focusing on a recent issue. Firstly, it will give a brief introduction to McDonald’s background in Australia. Then it will present the issue on McDonald’s recently happened in Australia. Furthermore, it will have an analysis of ethics and governance for Australian McDonald’s through the mode of literature review under the issue condition. Finally, the importance of ethics and governance in the corporation will be discussed.
2.0 Background of McDonald’s in Australia麥當勞在澳大利亞的背景
McDonald’s is the largest fast food restaurant in the world. It was founded by Ray Kroc in America in 1954. It owns over 32,000 fast food chains in 121 countries. Besides, it has a corporation with other catering brands like Aroma Café, Boston Market, Chipotle, Donatos Pizza and Pret a Manager. By the end of 2001, the turnover of McDonald’s reached around 14.8 billion dollars and its net profit was around 1.64 billion dollars (Stephen, 2004). The following bar chart shows the number of McDonald’s restaurants distributed in the top ten countries.
In December of 1971, the first chain of McDonald’s was established at Yagoona, Sydney, Australia. In early time, the expansion of McDonald’s Australia was slow due to the inefficient chosen products aiming at opening up the Australian market such as fish and chips. After the mistake was aware of, McDonald’s changed the menu to beef burgers and fries. After the improvement, McDonald’s Australia expanded into other markets quickly, and then within 6 years, there were stores in Queensland, Victoria, South Australia and the ACT. In 1978, the first Australian Drive-Thru of McDonald’s opened in Warrawons, New South Wales. In order to improve the service of drivers, McDonald’s Australia added some US items to the menu like McNuggets and Happy Meals.
In 1986, the 9,000th McDonalds restaurant was founded in Sydney. In 1987, McDonald’s Australia decided to add breakfast to the menu, which increased the operating profits of the company. In 1993, in Melbourne, The world’s first McCafe started its business, and after ten years, the number of Mccafe reached one hundred in Australia (Australian Franchise News, 2011). McDonald’s Australia kept on its success. In 2004, it focused on customers’ health with the introduction of Deli Choices. During the year between 2005 and 2006, McDonald’s Australia still paid attention to the diversity on the menu and nutritional value of its products (Meezion, 2007).
McDonald’s owned 455 fast food branches and outlets with over 45 thousand staffs in Australia (Steele, 2009). According to the most recent data, about 701 McDonald’s restaurants are distributed around Australia. The employees in McDonald’s could choose a relax work mode like working as a temporary worker, an hourly worker or a regular worker.
3.0 Organizational Structure of McDonald’s in Australia組織結構
The following structural table shows the main part of the organizational structure of McDonald’s in Australia.
4.0 Directors’ Structure of McDonald’s in Australia董事會結構
In regard to the board of director’s structure of McDonald’s Australia, it is composed of directors, who are mainly in charge of internal management and external decision-making. The following chart shows the structure of the directors of McDonald’s Australia.
The boards of directors are chosen by board of shareholders. One chairman and one vice president of board are elected in the board of directors. The chairman owns the three-year term of office. Once it is the expiration of the term of office, the director should be involved in another selection with other competitors. The remuneration of board of directors mainly depends on the operation profit of the company. Therefore, the board of directors attaches great importance to the smooth operation of the company. The AGM legal responsibility of board of directors mainly covers the following aspects: making a record of the proceedings, and keeping the company’s articles of association, reporting the actual operation to the shareholders, and applying relevant authority if the company gets trapped into the bankruptcy.
5.0 Ethical Principles Guiding McDonald’s Australia道德指導原則
The ethical principles are extremely important for one organization to make decisions and perform actions, and they can be used for assessing the current standards of the organization. The ethical principles are composed of fairness, law abiding, trustworthiness, responsibility, concerns for others, respect, transparency, environmental protection, honesty, supreme stakeholder involvement, etc. The principles should be applied within the organization by formulating policy, enforcing the policy, formulating punitive measures for ethical policy violations, etc.
5.1 Issue Case Study of McDonald’s Australia 問題案例分析
On March 29th, 2013, the shine of the fast food giant was influenced by an issue. The issue occurred in Tecoma which is a small Australian town in the lush foothills of the Dandenong Ranges east of Melbourne. The residents in Tecoma opposed to the establishment of the McDonald’s fast food restaurant in this area, because they thought it would bring bad impacts on its surroundings and leave negative influences on citizens’ health. However, in order to get an agreement from local community, McDonald’s had already take measures two year ago such as improving its image in residents’ mind and publicizing its CSR. However, it did not seem to work. On March 29th, the residents still fought against the McDonald’s. The citizens said that they resented the influx of an international restaurant chain and felt that the restaurant would spoil the outstanding natural beauty of the area (Sarah, 2013). There are more reasons explain why the local residents opposed the establishment of the restaurant. The location of the restaurant was chosen improperly because it would be built just opposite a school with a large number of pupils. Fast food has resulted in the overweight of many people in Australia, and people believed that the food from McDonald’s fast food restaurant can greatly influence the health of the teenagers. At the same time, the safety of the pupils can not be guaranteed due to the huge number of customers from local places, and crowed environment can result in accidents or crimes.
The issue draws the attention of McDonald’s managers, and the managers must devote to performing self-examination on its ethics and governance because they are the main sources that cause the Tecoma residents to resent their corporation.
The issue against the establishment of McDonald’s new restaurant in the area draws the attention of McDonald’s managers and employers. The reason is that it reflects the ethics and governance of McDonald’s Australia are not understood well by locals. The following part will present detailed information on ethics and governance of McDonald’s Australia through the way of literature review.
5.2 Ethical Principles and CSR of McDonald’s Australia道德原則和社會責任
The final goal to make a research on business ethics is to build an ideal community in which justice and humanity live harmony with economy. Under the situation, the economy could have a constant development and the public could meet their inner mind’s requirement (Cross, 2009). Ethic is the code of conduct and the business ethic is one of the most important factors in enterprise operation. In all, Ethics means to do the right thing with reasonable reasons. The ethical principles refer to the people who deal with the ethical issues.
The fighting issue against McDonald’s reflects that the local people in Tecoma distrust the ethical principles. Therefore, investigating the ethical principals of McDonald’s Australia plays a key part in explaining the deep reasons of the issue. The ethical principals of McDonald’s Australia include the principles for the share holders, board of directors, the managers and the staffs (Tiffany, 2012). In other words, the ethical principals cover all of the company’s employees and shareholders. The shareholders influence the ethical decision of board of directors, while the board of directors helps the management to form the right ethical value. Then, the management directly leads to ethical actions of staffs.