September 2013 – Ha Neul (Hannah) Chung's Blog

(+) Business and Ethics (Part 2)

Previously mentioned in 01. Business and Ethics, McDonald’s advertisements and marketing strategies that target children may not be considered unethical since the firm may not be responsible for the high children obesity rate. However, the value propositions of McDonalds, including “quality, service, cleanliness and value for every customer, every time” (McDonald’s), may be incompatible with its advertisements since the value of their customers may be health. That indicates McDonald’s is responsible for promoting and offering healthy food products. Furthermore, value-based management requires strategies that do not take advantage of vulnerable people, including the children who have been targeted by McDonald’s advertisements; most of the children are unable to critically judge the quality of the products and thus are vulnerable to the advertisements.

Producing products to increase profit is critical to business management, yet it should not be the primary purpose of the business. Value-based management suggests that ethical and value proposition consideration is essential in business management as it not only benefits its customers through delivering its value propositions, but also benefits the firm by increasing revenue. Business should be the method of benefiting the both parties, but not the one which benefits and harms the other party.

References:

Picture published in August 10, 2013 by Mark Wheatley: http://siliconangle.com/blog/2013/08/10/how-ethical-is-your-big-data/got-ethics/

Silver, David. Introduction to Business Ethics. September 2013. Powerpoint.

McDonald’s. McDonald’s. 2013.( http://www.mcdonalds.ca/ca/en/our_story/values_in_action.html). September 2013.

01. Business and Ethics

The picture is from the article written by Gael O’Brien.

http://business-ethics.com/2011/05/31/1441-marketing-to-children-accepting-responsibility/

In the article, McDonald’s Happy Meals with toys raises ethical concerns due to increased children’s obesity rate. We should, however, admit that individuals have dissimilar ethical standards.

In Adam Smith’s perspective, every individual pursues his own benefit rather than a well-being of society. McDonald’s pursue of its own benefit is not necessarily justified, yet it may not be responsible for adjusting their services to decrease the obesity rate. The consumers with rights to purchase other products are also responsible for their consumption.

Marketing to the children who are more vulnerable to advertisements, however, may also be unethical as the firm is responsible for selecting its appropriate target consumers. Due to different perspectives, it is difficult to determine if it is ethical.

Nonetheless, McDonald’s is required to consider adjusting their marketing strategies. Suggested by Freeman’s Stakeholder Theory, the executives should keep the stakeholders’ interests in the “same direction” in order to be successful. Despite the increased profit, the customers’ interest, which is the children’s health, is incompatible with other stakeholders’. The customers’ ethical views or interests will significantly affect the sales of food and the success of McDonald’s; perhaps, it is the reason why ethical standards of communities are valued.

Ha Neul (Hannah) Chung

Word Count: 199 words

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References:

1) Principles of Microeconomics, Fifth Canadian Edition by N.Gregory Mankiw, Ronald D. Kneebone, and Kenneth J. McKenzie (pg. 12: Adam Smith and the Invisible Hand)

2) “Marketing to Children: Accepting Responsibility” by Gael O’Brien (http://business-ethics.com/2011/05/31/1441-marketing-to-children-accepting-responsibility/)

3) What is Stakeholder Theory? – R. Edward Freeman (https://connect.ubc.ca/webapps/portal/frameset.jsp?tab_group=courses&url=%2Fwebapps%2Fblackboard%2Fcontent%2FcontentWrapper.jsp%3Fcontent_id%3D_1558996_1%26displayName%3DLinked%2BFile%26course_id%3D_25036_1%26navItem%3Dcontent%26attachment%3Dtrue%26href%3Dhttps%253A%252F%252Fconnect.ubc.ca%252Fwebapps%252Fblackboard%252Fcontent%252FlistContentEditable.jsp%253Fcontent_id%253D_1558999_1%2526course_id%253D_25036_1)

4) Picture is from (http://business-ethics.com/2011/05/31/1441-marketing-to-children-accepting-responsibility/)

You can also click the bolded words to be directly connected to the link.