Kentucky Fried Chicken (KFC) is a renowned fast food chain having its operations all
across the globe and enjoys a lot of reputation due to its spicy food items. KFC has
planned to launch its operation in India in early 1990’s amid of strong protest from the
People for Ethical Treatment of Animals (PETA) and violation of the food Adulteration act,
1954, with an excessive amount of active ingredient of monosodium glutamate. Along
with this heavy protest from the opposition parties to stop the invasion of KFC into Indian
KFC, after two decades is now again planning to invest and expand its operations in India.
Being as an industry analyst, how would you analyze the major issues faced by KFC in
India and develop a roadmap for its successful investment.
Hint: Major issues should be considered as Cultural, Political, Economic, Ethical and Agricultural
Vegetarian menu with a sideline of chicken for Indian Muslims (cultural issue)
Approval from the food authorities, have it’s products judged and tested by a committee (ethical issue)
Use alternate salt forms, instead of MSG use table salt/black pepper
Economic downfall since 2010 might be an issue, however a cheaper rate list might help KFC establish their place.
Ethical report of KFC and its problems
Kentucky Fried Chicken is one of the well-known fast food restaurants in the world. The industry was founded by Colonel Sanders. The corporation is based in Louisville, Kentucky and now regarded as the most famous chicken restaurant chain. It can be noted that each day, nearly eight million customers avails the products and foods offered by this fast food chain.
There are many ethical issues that an organisation face and one of the organisations which faces major issue is the Kentucky Fried Chicken. In my report, I would analysis about the issue faced by KFC and the ethical problems that the company encounters.
1.0 ETHICS DILEMMAS FACING BY KFC
KFC is among the most popular fast food brands in the world. Started out in the fifties, KFC now boasts of operating, franchising, and serving a worldwide chain of around 11,000 fast food restaurants that prepare, package and sell a menu of ready to eat foods. However, despite of the established brand of KFC Corporation and contrary to its previous achievements; it seems that there is a need for the management to redefine its image.
1.1 Provide Greasy Unhealthy Food
The growing and bustling population of today is obviously different from the population of the previous decades in terms of health and nutritional attitudes and behaviours. People today are more concerned with their health and figures than ever before. Obviously, the reason for this increased awareness is because of the fact that information is everywhere and every reports and research about nutrition seem to link fast foods with the growing number of obesity. Being one of the most popular fast food restaurants and with millions of people patronising the products and foods offered by the company, it is important the company adheres to ethical standards specifically in terms of providing healthy foods. However, it has been observed that KFC is using oil which contains Tran’s fatty acids and contain in monosodium glutamate, which is MSG. This is noted to increase cholesterol and even increased the risk of having heart disease and obesity. As authorities discovered this, the case was being carried over by the consumer group Centre for Science in the Public Interest and told the company to use healthier cooking products than the one they are using.
Gram for gram, they are believed to be twice as damaging as saturated fat. The Nutrition Action Healthletter, published by the Centre for Science in the Public Interest (CSPI), reported in 1997 that in clinical studies Tran’s fat raised people’s blood cholesterol about as much as saturated fat did. Because trans-fatty acids are not listed on food labels, they are invisible to consumers. With the negative effect of this to the people, KFC has been faced with problems in terms of following business ethics and finding ways to find solutions to these kinds of issue.
1.2 Protests by PETA
KFC is the world’s largest chicken fast-food chain in the world with more than 9900 stores at an average annual consumption of nearly 800 million chickens in all over the world. In order to reduce costs, KFC chicken suppliers kept the chickens in overcrowded cages and given drug to urging their growth so that they are usually too heavy and can’t even walk. In year 2003, PETA organization (Association of Ethical Treatment of Animals) found a video exposing KFC supplier abuse chickens by cruel trick and this immediately aroused public attention. In the video can see the staff do anything to abuse the chicken, they often cut off their wings, slamming them to the wall, punched them as sandbags, kicked them as football. At slaughter, the chicken’ throats are slit and dropped into tanks of scalding-hot water while they are still conscious. They abuse the chickens alive to death and then gave to outlet frying as delicious fried chicken serve all around the world.
In this case, the PETA organization has been called upon to KFC must immediately stop this cruel chicken farming, with the requirement.: to improve the living conditions of chickens to expand their activities in space, for example, cages set within the “room” and separators, so that rearing environment closer to the wild, natural environment and so forth, have been reared chickens have the most basic living conditions. But the real solution is consumers should taken actions to support the way to get all the animals from being inhumane and even standing on a healthy position, one can also choose to become a vegetarian to improve health, meanwhile more positive action to reduce the number of animals are subjected to inhumane treatment.
1.3 Advertisement Mislead
Nowadays, advertising communication play a importance role in our society. As we all know, fast food is high fat and calorie food, cellulose content is low, long-term consumption will lead to obesity, endangering the liver and other organs healthy. But fast-food ads never mentioned these issues, always promoted eating fast food is a modern lifestyle and fashionable, the food is fresh and tasty, nutrition and health. This is a food culture and lifestyle misleading from advertising, especially to young people and children.
In 2003 autumn, KFC played “health card” at TV ad, saying that Kentucky Fried Chicken “has the human body the necessary carbohydrates, is a daily non-integral part of the menu.” This ad exaggerated the Kentucky Fried Chicken features, many people discontent into this broadcast, the U.S. Federal Trade Commission specifically to this investigation. Under pressure from all sides, soon KFC company take off this advertisement. In this year July, ASA (Advertising Standards Authority), found that the U.S. KFC have an ad misleading consumers think that the fresh chicken is on daily basis delivered to every KFC outlets, this suspected of misleading to consumers. Advertising content shows a young chef side of a chicken sprinkled with flour, says: “I want to cook the most delicious food, secret is use the correct materials, like this fresh chicken”. Ad adds the narration: “Kentucky Fried Chicken, fresh meat. Every store, Every day.” But the ASA found that KFC chicken are delivered to each stores three times per week, it was decided shall not broadcast the ad, unless modified.
There is no doubt that business ethics plays a more and more important role in modern economy. The right thing to do isn’t always clear in business (1990). Thus the company needs some common principles to guide the behaviours. It is much easier for a company with good moral conducts to build its reputation and win respect from all aspects of a society. KFC has already gained the reputation of a fast food that continuously provides greasy unhealthy food, so it needs to do something about and shift its positive image back.
2.1 Provide Healthy Product
The traditional ethical stance of the company is to prevent actual problems on health and nutrition. However, there is an obvious lack for long term plans that will also maintain these developments even in years to come. KFC company should realize that their does not only have a responsibility to their current customers but to future generations as well. The scope of responsibility as cited in this discussion should include the provision of respect for others, honest and pure intentions as well as protection from harm. The management of KFC should be responsible in maintaining that healthy and nutritional foods which future generations will need as well so as to survive. Nowadays, people are more concerned with their health and figures than ever before. Obviously, the reason for this increased awareness is because of the fact that information is everywhere and every reports and research about nutrition seem to link fast foods with the growing number of obesity. In this case, KFC should start research on healthier ingredient like offering roaster chicken instead of fried chicken and provide low fat, low calories product to consumer. For example, McDonald’s recently have announced that they will use organic milk to product the coffee and chocolate in future. As consumers increasingly concerned about the source of food, McDonald’s also had to be improved for their own ingredient in order to increase the turnover. McDonald’s (UK) director Steve Easterbrook said, British consumers increasingly focusing on the quality of food sources and the realm of ethics, which has led to Britain’s organic dairy products has been greatly welcomed, so we also decided to provide our customers changes in the quality of milk. At the same time, we also hope that through this change, can increase the level of consumption of organic milk, organic dairy products market, contribute to the development. Well-known dairy company Arla is a McDonald’s milk supplier, said the organic milk market development more and more powerful, and we are very pleased to see McDonald’s fast food industry to lead the transition to organic dairy products. Other than that, in 2008 McDonald’s launches a new “cooked in a canola oil blend’ symbol to the packaging of menu items cooked in oil to help inform customers that these products are cooked in a blend of canola and sunflower oil which is virtually trans fat free and less than 10 per cent saturated fat. In March, McDonald’s introduced a new range of seared, 100 per cent chicken breast fillet products, providing a skinless, lower-fat alternative to deep fried chicken. Hence, KFC should develop and providing healthy product by using alternative oils which do not contains Tran’s fatty acids and reducing the amount of MSG increasing the amount of protein in the process. This will convey a message to the consumers and let them know that KFC’s chicken will maintain its taste without use great amount of MSG and oils which can contains Tran’s fatty acids and will not harm to the consumer’s body. By changing of the menu and the ingredient of cooking, this may rebuild their image and reputation from public because image plays the important roles in company in order to survive in future. In the selflessness theory of the Seven Principles of Public Life issued by the International Federation of Accountants (IFAC) state that the holder of public office should act personally in term of public interest not only gain benefit to themselves. Therefore, KFC should not only promote their new product, they should also put themselves in the shoe of their customers by understanding their requirements and responsible to make sure that the products are not harming the consumer’s healthy lifestyle.
2.2 Responsibility to Animal Welfare
With economic development and social progress, people towards animal’s attitude have a series of changes. As result, some countries come up with animal welfare laws and regulations. In addition, with the improvement of living standards in developed countries on food safety and health have become increasingly stringent requirements, the WTO also requires on this. PETA advocates to promote animal welfare, the main purpose is to have better human beings, in a reasonable and humane use of animals at the same time taking into account the welfare of animals that live to be comfortable and not painful death. Some studies show that in dirty and dense environment, pigs, chickens, ducks and other animals, their immunity will be greatly reduced and it is easy to fall ill, thus causing animal diseases. If an animals suddenly suffering in terror state, it will secret a large quality of adrenal and it will affecting the quality of the meat and these hormones may have hazardous on human health. After exposing the video of inhumane slaughter of chickens, PETA has been keep open condemnation on the KFC. KFC company should pay enough attention on this case, continuous improvement of the chicken breeding method and it living environment. This is the only way to ensure the chicken welfare, otherwise KFC will facing enormous obstacles from public. Besides that, KFC should made a commitment to require supplier farms to take measures to improve animal breeding environment, not forced feeding, not cruelty to animals and reduce suffer as much as possible when slaughtering process, or they will stop purchasing from them. PETA organization had proposed in change of using poison gas to slaughter chickens, this can reduce the pain of death to zero and reduce the contact between handlers, and would not affect on the quality of meat. Thus, KFC company should consider this propose and do their best to implement it in future. To support the view, deontological theory explains that it is a moral duty for individual to make the right decision determined not by its consequences but by obligation and commitments.
2.3 Improve Public Relationship
TV media has an important impact on people to their moral values, self-awareness, and values. Advertising can influence people’s attitudes change and affecting people’s consumer attitudes and values. Therefore, if the information of ads are no false it will cause a negative impact on the socio cultural. Young people and children are important consumer group for KFC, many parents concerned about KFC food contained in the low nutrition and high-calorie, worried that will cause children’s bad eating habits and nutritional imbalance caused by such issues. In fact, the media has a huge influence, if used properly will be able to play a significant positive effect. KFC should development of many more healthy, low calorie meals and other nutrition and health portfolio selection, and should clearly marked on the number of calories, nutrients, energy and nutrient density and the consumption of different age groups. So that, KFC can advocacy the healthy diet and exercise ideas in their ads, indicating the nutritional information, educating parents a correct idea and providing children the correct healthy diet knowledge. KFC company can also partnership with other public relation company holding a long-term, large-scale, cross-media public relations activities to advocacy the concept of the importance of health, encouraging of healthy eating and regular exercise habits, and provide a testing of body fat index (BMI) to public and also pay attention to the needs of disadvantage ethnic communities. Besides, by promote healthier eating habits to the public, it will win back consumers confidence and increasing its publicity with a more favorable corporate image. According to Mike Roberts, McDonald’s president and chief operations officer, he said that, “There is nothing more important to McDonald’s than building customer trust and loyalty around the world”. Furthermore, the ethical theory of moral relativism which can applies to people who believe that an act is right if approves by the social group in which person belong.
3.0BEST PRSCTICE & VALUE
In my opinion, ethical business, safety, environmental responsibility, social and sustainable development is the best practices that KFC Company should have. KFC shall always identify the needs, wants and interest of its consumer and to provide the desired satisfactions more effectively than its competitor in such a manner that preserves or improves the well-being of both the consumers and the society especially in terms of health nutrition. KFC had act responsibility to committed providing their customers with safe, delicious meals and maintaining operating their restaurants under the highest food safety standards. This commitment is at the heart of operations and supply chain management, and is evident in every aspect of business from raw material procurement to restaurant food preparation and delivery. KFC believe treating animals humanely and with care is a key part of their quality assurance efforts. This means animals should be free from mistreatment at all possible times from how they are raised and cared for to how they are transported and processed. Their goal is to only deal with suppliers who can provide an environment that is free from cruelty, abuse and neglect. Between recognize of maintaining high standards of animal welfare is an ongoing process. Training and education has and will continue to play a key role in efforts. KFC will continue to work with experts so that the quality assurance employees and suppliers have the training and knowledge necessary to further the humane treatment of animals.
The inclusion of the social responsibility concept to the business sector is not only necessary to broaden the companies’ involvement to social matters. The application of social responsibility to organizations is in fact a main contributory factor to their profitability and to ensure that they always follow ethical matters while doing their business. According to the findings of Mohr and Webb showed that social responsibility plays a significant role in consumer appeal. The perceptions of consumers however, tends to vary with regards to this aspect. Nonetheless, this stresses the importance of social responsibility not only on benefiting the stakeholders but also in achieving the goals of the companies towards growth and profitability. At present, the management of KFC have already realized the growing importance of social responsibility and that integrating this concept cannot be sufficiently supported by the optimization of shareholder value. Additionally, KFC has essential managing company in health, safety and community responsibilities this may lead KFC company continuing success.
4.0 SUGGESTION & STRATEGIC OPTIONS
One of the responsibilities of an organisation is to make sure that all their actions and business operations adhere to the ethical standards provided by the law. Other than strategies for marketing and management, businesses have considered other elements that play significant roles towards success. One of these important elements is ethics. As business requires social interaction and dealings, the strong recognition of what is morally right or wrong is then essential. In this reflective discussion, various ethical theories will be described. The main purpose of this paper is to identify the role of each theory to business and how these theories can be helpful to modern operations.
All in all, it can be said that having a business organisation that considers ethical management are business which can easily gain respect and good reputation from the customers. Contrary to the belief that social responsibility undermines businesses’ profitability goal, this actually help in generating profit through customer loyalty and good company image. For Kentucky Fried Chicken, the company must be able to ensure that the products that they offer are healthy and nutritional, so as to ensure also that their gain customer trust, loyalty and respect.
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