Csr Activities At Mcdonald's

”One of the central questions in corporate law and policy is about the purpose of the corporation. For whose benefit should the corporation be run? Should the corporation be run for the primary benefit of its shareholders? Or should corporations be run with the goal of benefiting society overall? “

Introduction

Many debate how much a corporation should be run to benefit society. While some corporations treat CSR activities as an expense, others embrace the notion that CSR is inherited due to the company’s existence in society. Historically CSR was not a priority, but changed over time as market revealed benefits. Today, companies adopt different theories towards CSR, each with its own set of priorities. When faced with the question “should

While they do not control what people eat, the influence the company has through advertising and market presence is enough to sway people’s decisions. There are even stories that some families rely on McDonald’s food for their daily meals because it is cheaper than groceries. While the previous may be an extreme example, it does illustrate that McDonald’s has inherent responsibility to provide, at the very least, food of a certain quality. McDonald’s takes great measures to ensure its logistics are efficient and the sources of ingredients are checked for quality. But who is to say that amounts to CSR? Today, salads are commonplace on McDonald’s menus around the world. This wasn’t always the case, however. As the market grew more health conscious, it began to demand more healthy food choices, along with growing reports of the unhealthiness of McDonald’s menu items. In response to this, the company offered salads and in the course of last decade started introducing nutritional facts and marketing their ingredients as “real” and “fresh.” This type of reactionary measure could classify McDonald’s methods to CSR as Instrumental. Instrumental theories on CSR focus primarily on shareholder’s interests and treat CSR as a marketing tool to increase public perception. They are often reactionary to social trends and seek to gain competitive

The motive behind their strategy is not to appease shareholders first, but to cover all their social responsibilities. The advantage of this over a company that primarily runs for shareholders’ sake is that it is more closely involved with-and on top of societal changes, enabling it to respond quicker to society’s demands. Furthermore, ongoing attention to society builds trust between the company and its stakeholders. People are more likely to perceive such a company as responsible and conscious, translating later into buyer’s confidence. This has the overall effect of increasing the company’s reputation. The main disadvantage to companies operating to please stakeholders is that the measures taken to constantly engage in CSR activities are costly. Additionally, the decisions managers make won’t always please every stakeholder, especially shareholders. In contrast, companies that cater to shareholders do not have to worry as much about losing faith from shareholders. This is a large drawback as shareholders are essentially the owners of the company, and loss of faith will translate to devaluation of the company’s stock. Another drawback is that CSR activities can not always be quantified. New policies or strategies need to be measured in order to gauge company performance and forecast earnings. This is