The KFC Current Corporate Social Responsibility Aspects - Case Study Example

THE ROLE OF CSR AND BUSINESS ETHICS IN KFC By Student’s Name Code + Course Name Professor’s Name University Cite, State Date The Role of CSR and Business Ethics in KFC Background / Introduction KFC is an international firm that operates fast food chains across the various markets in the world. The acronym KFC stands for Kentucky Fried Chicken; a company that over a long period of time specialised in the provision of fried chicken. It is headquartered in Louisville, Kentucky in the United States of America. It is deemed to be the global second largest fast food chain after McDonald’s and an immediate subsidiary of Yum! Brand. Apart from the US, the fast food chain enjoys a greater extent of markets in Africa, Asia an even such Caribbean regions as Jamaica. The company provides a distinctive number of products and services to its global customers that include; hamburgers, fried chicken, pork and fish. The fast food chain has always enjoyed a substantial level of profits that emanates from the different market regions in the world. However, it has also faced lots of challenges especially when notable stakeholders have taken the stride to ensure that it operates under an ethical environment. The fast food chain boasts of a fast food restaurant that allows customers a greater level of tasting chicken with a distinctive selection of home-based side meals as well as desserts that a wholesome and perfect meal composition. The purpose of this paper is to find out the ethical concerns of the company that has been brought about by different stakeholders as well as the measures it took to overcome them. The paper also examines the company’s current corporate social responsibility aspects. Ethical Issues Raised & Tackles Made by KFC KFC has continued to suffer numerous levels of ethical issues while providing its products and services in different fast food markets across the global market. A business that adheres to ethics while conducting business operations make sure that it follows a set of philosophical knowledge that are aimed to doing good whenever executing these tasks to different stakeholders. The following are some of the notable issues as well as responses made by KFC in recent years in regards to their unethical operations. First, the ABC recently listed two fast food chains as being the major beneficiaries of fresh produce as well as poultry that were alleged to have been brought into the market by a substantial number of people that were actually composed of underpaid immigrants’ workers who were employed by different independent labour contractors. According to Franchise Business ( 2015, p.1), KFC indicated that it was not aware that some of its suppliers engaged in unethical and illegal manner of working conditions and thus, it was committed to taking up with the issue to come up with a way forward for all concerned suppliers. KFC came up with a statement that expound on the position of the issue and the manner for which it would tackle the issue at hand. The restaurant, in its statement, indicated that it did not advocate for any mistreatment of workers regardless of the supply chain or business acumen they represented. Consequently, it noted that it always emphasised on conducting business operations in an ethical and legal manner hence required that all of its fundamental chicken and fresh produce suppliers abide by all of Australian laws and regulations as well as company’s Supply Chain Management Code of Conduct (Franchise Business, 2015). KFC was ready to abandon business relationships with those suppliers that executed unethical operations. Second, KFC and the Yum! Brands as a whole is being scorned in Chinese market. In fact, the overall system sales in this market has declined by at least 6% within the first quarter of operation while same-store sells had reduced significantly by about 12% (Kopytoff, 2015). The decline in sales is attributed to unethical practices adopted by the firm when it continued to source meat supplies from a local supplier that was caught for aspects related to improper food handling while another supplier had gone ahead to utilise growth hormones as well as antibiotics in order to fatten chickens supplied to KFC. As a way of dealing with this problem, KFC made timely apologies to the Chinese consumers for failing to enlighten regulators about the higher levels of specific drugs like the monosodium glutamate: MSG as well as hormones that had been continuously used for accelerating the immediate growth of its poultry supplies (Gensler, 2015). In regards to the supplier that had continued to supply old meat, the company was forced to abandon the services and even alerted the public on this decision. Third, the fast food restaurant is currently under intensive pressure from government agencies, customers as well as other notable special interest groups to provide healthier menu options especially for children market segment. In fact, the fast food chain is being sued for frying its chicken using trans-fat cooking oils that are capable of leading to heart diseases as well as diabetes. A good example of this negative attribute of the cooking fat can be seen in the Australian girl: Monika Samaan that suffered severe brain damage and thus, became paralysed by food poisoning. The girl suffered from Salmonella encephalopathy, which is basically a brain injury is fairly connected to food poisoning that also caused blood infection as well as septic shock in 2005. Subsequently, it is noted that several of her other family members also suffered illness and claimed that Samaan’s injuries that included severe cognitive motor and speech impairment as well as spastic quadriplegia all resulted from the consumption of KFC’s chicken Twister Wrap (Inquirer, 2012). According to the reports made by The Nutrition Action Healthletter, which was published by the Center for Science in the Public Interest (CSPI), indicated that trans-fat was responsible for increasing people’s blood cholesterol just like saturated fats. In a bid to counter this claims, KFC went ahead to appeal the case against Samaan and also, went further to provide relevant information regarding nutrition for its international consumer base. Fourth, in India, KFC faced another ethical related issue that called for its closure in the Indian fast food market by such influential special interest groups like PETA. PETA had gone ahead to enlighten the public over the cruelty the poultry farmers’ subject the chickens offered to consumers in India (Gillam, n.d). PETA conducted a crippled chicken campaign to other fast food firms like McDonald’s and Burger King, which had reciprocated and improved their animal welfare standards in the respective poultry farms. Despite PETA informing KFC on their ill-treatment on animals, the fast food chain did not take time to respond to this claim (Gillam, n.d). The firm in fact, did not make official statement in regards to this matter, which prompted consequent protests from other affected stakeholders across the Indian market. Corporate Social Responsibility: KFC Corporate social responsibility or rather CSR is aimed at embracing the aspect of accountability for all corporate actions and therefore, encourage a positive relation and impact on the immediate environment as well as other stakeholders that include; consumers, employees and communities at large (Brown-Liburd, & Zamora, 2015). CSR is aimed at sponsoring an image of business accountability to a wider range of stakeholders apart from internal ones like shareholders and investors. KFC CSR approach is aimed at examining the fundamental areas of impact of its global business activities and finding out its immediate strongest capacities. The company’s develops a CSR report that engages both internal and external stakeholders in order to ascertain their views in regards to CSR efforts and impacts (Tang, Gallagher, & Bie, 2015). These engagements are meant to sharpen the company’s actions and communication strategies for future operations. In consequence, KFC methodology to CSR is deemed to by dynamic in nature and focused on global impacts but always ingrained into a People-First Philosophy. Some of the notable CSR reports made by the firm include; First, the company adheres to a given set of environmental policies. For instance, through the Palm Oil Policy, KFC is committed to formulation and implementation of a global nutritional policy that constitutes the elimination of palm oil as cooking oil in all of its restaurants by the end of financial year 2017 (Yum! Brands, 2014). Supply of this cooking oil will only be allowed from suppliers that have attained at RSPO certification. The Sustainable Sourcing Policy is yet another environmental policy emphasised by the CSR report: environmental section that will ensure Yum! Is fully committed to ensure the sustainability of its packaging priorities so that the firm cannot intentionally purchase paper-based packaging materials generated from fiber that emanates from illegal places or other unwanted sources (Yum! Brands, 2014). Secondly, the company promotes human and labour rights through the sustenance of a working environment that goes way ahead to respect and uphold human rights for all of its employee-base across the different global markets. For instance, the company does not support employment of underage children or promote any form of forced labour. Subsequently, it does provide the freedom of association for its employees and does not advocate for any form of physical punishment and abuse (Yum! Brands, 2014). In fact, all of these rights are directly overseen by the permitted laws and regulations in each and every place of operation. Thirdly, in relation to transparency, the company understand that the customers will always rely on them for truthful and straightforward information relating to menu options in order to allow them make effective and informed decisions about the products and services that have been offered. KFC always make sure to educate their customers on the need to sustain a balanced lifestyle (Yum! Brands, 2014). Notwithstanding, the firm offers nutrition-based information in most of its brand websites as well as other customer-facing communications in order to inform on choices made. In the United States of America, KFC runs a Health and Wellness initiative that seeks to limit advertisement of its products on many television programs especially for children less than 12 years (Yum! Brands, 2014). Markedly, the company worked with the U.S congress to formulate and implement uniformised menu board guidelines for the preparation of food sales that avails consistent manners for educating the public on nutritional value of foods they consume. The aforementioned formulation was included in the U.S Affordable Healthcare Act while the US Food and Drug Administration are in the final stages of implementing the mandate. As a way of complying with the mandate, most of the KFC’s US brands have taken an individual responsibility to provide information related to size of calories that are served with respective meals (Yum! Brands, 2014). At KFC Australia, the company is deemed to be entirely committed to offering an open and transparent platform meant to check on the manner for which food should be cooked and thus, availing customers with a chance to make effective and informed choices. Some of the most notable information provided at the company’s Australian website include; detailed nutrition and allergen on store brochures. Recent Yum! CSR Case News In regards to real CSR activities conducted by the company, recently the firm engaged in World Hunger Relief Programme where it raised more than $600m for UNWFP as well as other Hunger Relief Agencies. The programme was conducted in more than 125 countries upon where the company operates (Yum! Brands, 2014). In Honduras, KFC and Pizza Hut were recognised for their imminent efforts to advocating for support to Consonlaca. The initiative contributed at least 5 food donations that totalled to more than $70,000 (Yum! Brands, 2014). The Volunteer for Hope Program Awards has been at the forefront appreciating the volunteers with about $500, 000 in form of grants to Qualifying Charitable Organisations Worldwide since the year 2012. The program has continued to encourage on the firm’s 1.5 million associates as well as its franchisees to ensure giving back to the surrounding communities as a whole (Yum! Brands, 2014). Conclusion In conclusion, it can be perceived that KFC, just like other fast food stores as McDonalds, has continued to face ethical issues in its daily operations. The company has faced such ethical issues like supply of old meat, providing customers with chicken that have undergone artificial growth processess as well as animal cruelty. In most of these cases, KFC and the Yum! Brands at large have made efforts to tackle these emanating issues through releasing statements meant to assure the stakeholders of their importance in business operations. In fact, the company’s CSR report indicates that the firm has made stringent efforts to ensure that they account for all of the operations in the different global markets like China, Australia and India. References List Brown-Liburd, H, & Zamora, V 2015, 'The Role of Corporate Social Responsibility (CSR) Assurance in Investors' Judgments When Managerial Pay is Explicitly Tied to CSR Performance', Auditing: A Journal of Practice & Theory, 34, 1, pp. 75-96 Franchise Business 2015. Ethical standards important say KFC and Red Rooster after ABC report. Retrieved on June 6, 2015 from http://www.franchisebusiness.com.au/news/ethical-standards-important-say-kfc-and-red-rooster-after-abc-report Gensler, L 2015, 'KFC, Pizza Hut Still Faring Poorly In China But Not As Poorly', Forbes.Com, p. 12 Gillam. N, d. Animal activists PETA raise corporate America’s IRE. Ecomall Retrieved on June 9, 2015 from http://www.ecomall.com/greenshopping/peta.htm Inquirer 2012. KFC guilty in Australia salmonella brain damage case. Retrieved on June 9, 2015 from http://newsinfo.inquirer.net/180375/kfc-guilty-in-australia-salmonella-brain-damage-case Kopytoff, V 2015, 'KFC: Our Chickens Don’t Have Eight Legs', Time.Com, p. N.PAG Tang, L, Gallagher, C, & Bie, B 2015, 'Corporate Social Responsibility Communication through Corporate Websites: A Comparison of Leading Corporations in the United States and China', Journal of Business Communication, 52, 2, pp. 205-227 Yum! Brands 2014. Corporate social responsibility report. Retrieved on June 9, 2015 from http://www.yumcsr.com/pdf/2014_CSR_Report_040115.pdf Read More