Business ethics Moral issues facing a company involved in the fast food industry

Résumé du document

Contrary to Friedman's theory which claims that corporations only aim at increasing profits and shareholders revenues, companies have moral responsibilities. Indeed, shareholders are not alone in a firm and have to compromise with the interests of the other stakeholders. According to Freeman , a stakeholder in an organization is any group or individual who can affect or be affected by the achievement of the organization's objectives. In this way, the stakeholder approach consists for a company, in considering the effects of its activities and taking into account the interests of all stakeholder groups. The fast food industry illustrates perfectly the different concerns in ethics and morality that, this industry is a symbol of globalization in the sense that it is characterized by many multinational companies which have an important economic and political power. These positions give them some moral obligations in terms of social sustainability; indeed fast food companies have to fight against glaring inequalities in wealth distribution. Therefore, it is important that managers should run the fast food industry according to the stakeholder approach, because it is the only way to reach success for all stakeholder groups.

Extraits

[...] Business ethics Moral issues facing a company involved in the fast food industry Contrary to Friedman[1]'s theory which claims that corporations only aim at increasing profits and shareholders' revenues, companies have moral responsibilities. Indeed shareholders are not alone in a firm and have to compromise with the interests of other stakeholders. According to Freeman[2], a stakeholder in an organization is any group or individual who can affect or be affected by the achievement of the organization's objectives. In this way, the stakeholder approach consists for a company in considering the effects of its activities and taking into account the interests of all stakeholder groups. [...]

[...] Whether the effects on consumers are positive or negative, companies have a moral responsibility towards its customers. Indeed corporations must be able to answer for their acts and justify their behaviour. Unfortunately, many issues are raised about the quality of products sold by these companies and the effects on the consumers' health. “Junk food” is often considered as the first moral issue about which the fast food industry has to react. In order to increase shareholders profits, fast food companies try to reduce production costs which often rhymes with reducing the quality of ingredients. [...]

[...] However, the main problem is how to make shareholders accept a reduction in profits since improving the quality of products is not compensated for an increase in sales in terms of costs. Furthermore, the fast food industry as a whole can be detrimental to the customers' health. Without mentioning the quality of products, consuming steadily food from the fast food industry can lead to jeopardize the consumers' health. Indeed their food is rich in proteins and fats which can provoke obesity, cardiovascular problems or else nutritional deficiencies. Therefore fast food companies should inform consumers about the risks of consuming too regularly this kind of food. [...]

[...] This kind of management is unfair but seems to be successful in the fast food industry: any change in the working conditions would be considered by shareholders as a lack of profitability. Therefore shareholders have no interests to concern themselves with employees, unless they decide to assume their social responsibility. The fast food industry has the specificity in comparison with non food industries to have some advantages in terms of supply. Indeed fast food companies need some ingredients like vegetables, meat or bread to make their products. [...]

[...] Many managers tend to use moral issues to increase sales and maximize profits. Indeed they try to manipulate stakeholder groups in order to make them believe that they are concerned with their interests and issues. Unfortunately this is only pretence and stakeholders' interests are not taken into account: it just deals with pleasing a stakeholder group in order to exploit it more. This is particularly true with consumers because it is easy for a company to make them believe that managers are concerned with their expectations. [...]