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Business Environment Essay


Stakeholders can be defined as “individuals and groups who are affected by the activities of an organization. The most important stakeholders can be seen as those with most to lose from the organization’s actions, but this does not always reflect their relative power” An organization’s stakeholders are all parties who can reasonably be understood to be affected by its decisions. They can be deemed to represent the business’s social and environmental capital as well as economic. Stakeholders can be of very different and varied guises and also harbor conflicting interests consequently, its image and reputation in the eyes of its stakeholders is critical to the company. Mainly they can be categorized into three major groups:

1) Internal Stakeholders
2) Connected Stakeholders
3) External Stakeholders
4) Stakeholders Conflicts

Stakeholders are found in all organizations, businesses or firms – from a local grocery store to huge multinational companies such as Coca-Cola, McDonalds and Microsoft. The number of stakeholders per business will vary as will their importance and influence. The type of organization or product / service it supplies will also determine its stakeholders. A Public Limited Corporation may have far more stakeholders than a family owned business due to its vast numbers of shareholders.

Discussing about McDonalds, it also hold many stakeholders those who get affected and vice versa. Stakeholders of McDonalds can be categorized into the three major groups as shown under:

Internal Stakeholders

Following are the stakeholders which fall under this category:
1)Managers or Directors
2)Staff or Employees

Internal stakeholders are those who are ‘members’ of the business organization. These stakeholders are situated within the McDonald and may affect the ‘day-to-day’ running of McDonalds or be affected. Their interest would be in the McDonald`s success which will alternatively secure their career and assure them for high wages and benefits.  Example of the internal stakeholder for McDonald would be as follows:
•The employees/staff member working in the McDonald’s restaurant
Connected Stakeholders

Following are the stakeholders which fall under this category:
4)Finance providers

Connected stakeholders are those outside the organization but have a direct interest with the progress of the business. McDonald’s suppliers would want that the business runs and grows well, as this will ensure more supplies to McDonald. The owner/shareholder will look forward for high turnover, while the customer will look for a great value of the money which they are going to spend

Example of connected stakeholders for McDonald’s would be as follows:
•Shareholder/owner: Emirates Fast Food Corporation LLC
•Supplier: Coca-Cola

External Stakeholders
Following are the stakeholders which fall under this category:
2)Environmental Pressure Groups
4)Trade unions

External stakeholders are those who are not the member of the organization, but they are indirectly affected with the ups and downs of the business. Example of the external stakeholders of the McDonald’s in UAE is as follows:
•Government: Environment Agency UAE

Stakeholders Conflicts
There are many chances of conflicts among the interests of the stakeholders, i.e. customers would like to avail the best product and service at a very low price, while on the other hand managers and directors would be expecting increase in the profit ratio, which cannot be achieved by offering the products and services at a low price.  Logically, a company should tailor its communication to each stakeholder group individually to engage the special concerns of that group. It is important that an organization meets the needs of the most dominant stakeholders, but the needs of the other stakeholders need to be considered – nearly every decision becomes a compromise.

2.How does McDonald`s social responsibility affects its business and stakeholders? Analyze McDonald`s corporate social responsibility for its suppliers and the community.

Corporate responsibility means many things to many people. At McDonald’s, being a responsible company means living our values to enable us to serve food responsibly and work toward a sustainable future. The goal of McDonalds CSR is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest (PI) by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality.

By maintaining their CSR policy the leave a great impact on their stakeholders, and ultimately maintains their reputation. This also affects their business in a very positive manner. McDonald’s Corporation is among “Most Admired Companies” for social responsibility. In 2001 it was ranked in the Wall Street Journal as number five in reputation for corporate social responsibility. McDonald’s social responsibility always focuses on a goal of influencing a behavior change among the community and its stakeholders which is to contribute in improving the environmental and community well-being.

McDonald’s CSR policy for its Suppliers

As it is assumed, McDonalds supply chain is large and complex. They have numerous direct suppliers – companies that make or deliver final products for restaurants. They have an even larger number of indirect suppliers – farms and facilities that grow and process the ingredients that get delivered to their direct suppliers. They envision a supply chain that profitably yields high-quality, safe products without supply interruption while leveraging their leadership position to create a net benefit by improving ethical, environmental and economic outcomes.

Ethical – They envision purchasing from suppliers that follow practices that ensure the health and safety of their employees and the welfare and humane treatment of animals in the supply chain.

Environmental – They envision influencing the sourcing of the materials and ensuring the design of their products, manufacturing, distribution and use minimize lifecycle impacts on the environment.

Economic – They envision delivering affordable food, engaging in equitable trade practices, limiting the spread of agricultural diseases, and positively impacting the communities that their suppliers operate in.

McDonald’s suppliers are expected to share and apply McDonald’s vision of sustainable supply to their own suppliers (McDonald’s indirect suppliers). They launched an enhanced Social Accountability program, including online training for suppliers, their facility managers, and McDonald’s supply chain staff.

•99% of our 523 approved abattoirs were audited for animal welfare in 2007, and 99.2% of those passed their audits. •Seven of our nine largest markets have introduced the environmental scorecard to their suppliers. •In 2007, 91% of our fish was sourced from fisheries without any unsatisfactory sustainability ratings •McDonald’s global minimum standard prohibits the use of antibiotics when used solely for growth promotion purposes. 100% of their direct relationship poultry suppliers around the world have acknowledged their compliance with their antibiotics policy

McDonald’s CSR policy for the Community

According to the McDonald community approach, it states that:

Giving back has been fundamental to our business ever since Ray Kroc founded McDonald’s more than 50 years ago. Our communities give us so much in return—not just by supporting our business— but by increasing our brand visibility and strengthening our relationships with our stakeholders. We use three key strengths—our scope, our people and our profits—to make a meaningful and lasting impact on the global communities where we live and work.

McDonald’s support its communities by working for them in a wide perspective. Mentioning some of the activities that McDonalds carry in favor of the community as under:


•When tragedy arrives, McDonald’s the McDonald’s System responds. McDonald’s employees, franchisees and suppliers mobilize to provide assistance in many forms. Over the last several years, our System has provided food and other assistance to victims of such disasters as the 9/11 tragedy in New York City, Pennsylvania and Washington D.C. in 2001, the tsunami in Southeast Asia in 2004 and the devastating hurricane season in the U.S. in 2005 •During the May 12 earthquake in China. McDonald’s China served almost 40,000 meals to earthquake victims, relief workers, military personnel, hospitals and police and fire department officers.


•McDonald’s employees, and others within the McDonald’s system, are given the opportunity to provide support for members of the system in the aftermath of natural disasters. McDonald’s Family Charity, established in 2000, has succeeded in distributing close to $4 million to over 4,000 individuals who have lost their homes or possessions during natural disasters. •In January 2004, McDonald’s Restaurants of Canada created the 10 Cent Happy Meal Donation program. Through this program, RMHC Canada receives 10 cents from the sale of every Happy Meal purchased, at every Canadian McDonald’s restaurant, every day of the year. It is RMHC Canada’s largest source of funding, reaching a milestone in 2009 of CA$25 million in total donations since inception

•McDonald’s delivery trucks in the United Arab Emirates are running on 100 percent biodiesel made with recycled vegetable oil from the chain’s more than 80 restaurants in the Emirates.

3.What are the factors that contributed to a ‘good’ corporate image of McDonald’s?

A corporate image is the sum of the impressions that stakeholders (customers, suppliers, employees and the community) hold about your company—in other words, your reputation. The goal is to show what you are as a company throughout all its facets (not pretending to be something you aren’t)

Following are the factors that lead to a good corporate image of McDonalds:
•Being a Responsible and Good Employer
•Fair Dealing with Suppliers
•Taking care of the Customers
•Transparent company policy

Being a Responsible and Good Employer

McDonalds is considered to be one of the best examples as a good employer. They provide their employees with a friendly and very convenient workplace to work in. As an employer they take care of the followings:

Human Rights and the Law
They prohibit physical punishment or abuse. They respect the right of employees to associate or not to associate with any group, as permitted by and in accordance with applicable laws and regulations. They comply with employment laws in every market where we operate.

Respect and Dignity
They provide equal opportunity for employees and applicants. McDonald’s employees work in a place that is free from harassment, intimidation or abuse, sexual or otherwise, or acts or threats of physical violence.

Inclusion and Diversity
McDonald’s provides equal treatment and equal employment opportunity without regard to race, ethnicity, color, religion, gender, age, national origin or ancestry, physical or mental disability, sexual orientation, military status or any other basis protected by law.it also applies to the employment decisions, including recruitment, hiring, placement, development, promotion, training, scheduling, benefits, compensation and termination

Fair Dealing with Suppliers
They treat their suppliers respectfully, fairly and honestly, and expect their suppliers to treat them in the same way. McDonald’s bases its relationships with suppliers on lawful, efficient and fair practices. McDonald’s is committed to fair employment practices and strives to provide a safe, healthful and productive work environment for its employees. In turn, they strive to work with suppliers who share their values.

Taking care of the Customers
McDonalds is highly focused about its customers, and it could be observed in this statement “Our customers are the reason for our existence”.

Best Product Quality and Safety
McDonald’s is committed to ensuring that the foods and beverages they serve to their customers are safe. Their safety and quality standards for food, beverages, toys and promotional items meet or exceed all applicable government requirements. They take this as part of their responsibility as a good corporate citizen, and know it is also essential to the continuing growth and profitability of their business.

Best Customer Care/Handling

McDonalds assures that each and every customer entering the restaurant is properly welcomed with due attention, is satisfied excellently in terms of the product they offer. They make sure that customer while leaving is satisfied with the product and service so that they retain their each customer.

Transparent Company Policy
McDonald is committed to have a crystal clear policy in terms of the followings:
Communicating with the public/media
Trade Practices
Fair competition
Government inquiries

4. Analyze McDonald’s mission statements in the case. What is the value of mission statement to McDonald’s employees, Customers and suppliers?

A Mission Statement defines the organization’s purpose and primary objectives. By crafting a clear mission statement and vision statement, you can powerfully communicate your intentions and motivate your team or organization to realize an attractive and inspiring common vision of the future.

The two most famous mission statements of McDonalds are as follows: 1)“To be our customers favorite place and way to eat”
2)“Promote diversity and inclusion among our employees, owner/operator and supplier who represent diverse populations McDonald’s serve around the globe”

Looking at the brand mission statement of McDonalds it clearly indicates that McDonalds is highly customer focused. They are committed to improve their operations and enhance their customers’ experience. They follow QSC&V strategy, QSC&V is an abbreviation for Quality, Service, Cleanliness & Value which is said to be a benchmark used throughout the world by the McDonald’s Corporation. This criterion is used for every customer, each and every time. In order to fulfill the mission statement the staff and employees form a friendly and happy environment in their respective restaurants. By doing so they achieve their goals and ultimately fulfill their mission statement

The second mission statement of McDonalds describes the following approach: At McDonald’s, diversity and inclusion are part of our culture- from the crew room to the board room, we are working to achieve this goal every day by creating an environment for everyone to contribute their best. Our journey to bring our values to life have been documented in “None Of Us Is As Good As All Of Us” and it is a journey that continues today through our continued efforts with our employee business networks, diversity education, and our outreach in diversity communities.

The value of mission statement for the Employees
Mission statements hold an important and inspiring value to the employees. Likewise McDonalds mission statements work as a guideline for the employees so that they do their best to achieve the desired mission of the McDonalds.

The value of mission statement for the customers “our customers are the reason for our existence”. This is what the McDonalds mission statement defines. When the customers get to know the company`s attitude towards the community and customers is really appreciable and when they are sure about the products and services that they are going to avail will be beyond their expectations and meet their needs, so the customers will definitely return to the business. And this will ultimately give a rise to the business.

The value of mission statement for the suppliers
According to the McDonald, its business model is depicted by the three-legged stool of owner, suppliers and the company employees. So this indicates that Suppliers of the McDonald are of great importance for the organization and therefore the mission statements states their importance as well. The mission statement will guide its suppliers that they should always supply and deliver the best they have and maintaining the quality. It will also strengthen the relation among suppliers and the McDonalds.


•http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/corporate_governance/standards_of_business.Par.44618.File.dat/9497_SBC_layout_McD_Eng-India%20101909.pdf •http://www.corporateregister.com/a10723/mcglob08-csr-us.pdf •http://jayzy2009.blogspot.com/2009/07/chapter-13-stakeholders.html

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