McDonalds Beef Fries Controversy

Presented By

McDonalds
Largest Food Chain restaurants in the world. Found In 119 countries. Serves 58 million customers daily. Operates 31,000 restaurants worldwide The number of employees is 1.5 million. Operates a franchise business model.

History....
Started as a drive-in restaurant by two brothers, Richard and Maurice McDonald, in California, in the year 1937 Ray Kroc dealed with the McDonald brothers in 1954 and established franchising Company, the McDonald System Inc and appointed franchisees. In 1961 he bought out the McDonald brothers share for $2.7 million & changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public.

History Cont.
By end of the 1970s, McDonald's had over 5,000 restaurants with sales exceeding 3 billion US dollars. In 1996 McDonald's entered into a 10- year agreement worth 1 billion US dollars with Disney. In October 1996, McDonald's opened its first restaurant in India. By 1998, McDonald's was operating 25,000 restaurants in 116 countries, serving more than 15billion customers annually.

Controversial Background
Coffee Burn Controversy
700 Incidents of scalding coffee burns. 81 year old women suffering third degree burn.

Woman scarred by an extremely hot pickle slice in a hamburger Crushed rat head in an Hamburger.

Allegations Against McDonald's

Nutrition Environment Advertisement Employment Animals Expansion Free Speech

Nutrition
McDonald's high-fat, low- fiber food can cause diseases such as cancer, heart problems, obesity, and diabetes, responsible for 75 per cent of premature deaths in the West. McDonalds claimed it had right to sell junk food Critics claimed that the company should at least refrain from advertising the products as nutritious, sponsoring sports events, and opening outlets in hospitals.

Environment
McDonald has been accused for destroying tropical forest. Causing environmental pollution due to the litter generated from packaging material.

Environment
McDonalds ad spend of 2 million is criticized for exerting negative influence on children. Through collectable toys and schemes in school it has strong hold on children.

Employment
It is accused for paying poor wages and forcing local food outlet out of business. It has also faced allegations as understaffing, few breaks, iIIegal hours, poor safety conditions. crushing unionization attempts, kitchens flooded with sewage, and selling contaminate food.

Animals
It slaughters thousands of cows ,chicken , lamb and other animals.

Expansion
It has created a global expansion leading the local economies to drain off.

Free Speech
McDonalds uses its clout to influence media and legal powers to intimidate the people not to speak against it. Many media organizations that voiced strong opinions on the above issues have been sued by the company.

Peoples Protest
Two London Greenpeace activists-Helen Steel and Dave Morris started their protests by distributing leaflets containing allegations against the company. The company was severely criticized for hiring detective agencies to break into the activist group. The company was found guilty of endangering the health of its customers and paying workers unreasonably low wages.

The Beef fries Controversy

Began in 2000. Hindu Jain software engineer Hitesh Shah read an article about beef extracts in the French fries.. Company replied that it used beef extracts for flavoring and not mentioned as it is an natural ingredient. It gave the reference of FDA that the natural flavors are not Listed. Harish Bharti filed a action lawsuit against McDonalds. McDonalds made a statement that it never claimed the fries as veg. Bharti found a letter sent by McDonalds claming that the fries were vegetarian. Also employees said the same.

Effects.
McDonald's released its conditional apology admitting that the recipe for the fries used 'a miniscule trace of beef flavoring, not tallow'. McDonalds later announced that it would issue a new apology and 10 million dollars to vegetarian and religious group. The company also decided to pay 4,000 US dollars to five lawsuits and post a new and more detailed apology on the company website and in various other publications. McDonald's also decided to convene an advisory board to advise on vegetarian material.

In India
The M.D of McDonalds India mentioned that the Indian fries did not contain beef extract. Special menu were developed for India taking into Consideration the Indian culture and religious sentiments. Brihanmumbai Municipal Corporation (BMC)and the Food and Drug Administration(FDA) tested the fries in India & confirmed the fries contained no animal fat. The Hindu interest group Shiv Sena held a Demonstration in the Indian capital, New Delhi.

Social Responsibility
This statement were made by McDonalds as part of social responsibility

1)Ronald McDonald charity home. 2)Environmental leadership. 3)Diversity. 4)Employment 5)Education. 6)Safety & Quality.

Causes of controversy
Suspect of people due to earlier controversy. Poor Brand Image. Blaming the customers. Playing with the words. Casual attitude towards Customers. Environmental degradation.

Distinctiveness
Did McDonalds behave in same manner in all other Situation.

YES Low Distinctiveness

Internal Attribution

Consistency
Did McDonalds behave in same manner at other Times.

YES High consistency

Internal Attribution

Consensus
Do most of the other food chain behave in the same manner.

NO Low Consensus

Internal Attribution

Conclusion
The Internal Foctors were responsible in each case This meant that the McDonalds was responsible as per the rule of attribution theory.

Case questions
What perceptual processes contributed to so much hostility and criticism despite McDonald's being the number one fast-food chain in the world? Comment on the company's stand that it had never claimed the fries were vegetarian. Do you think the company handled the controversy effectively from the point of management of rumors? Discuss the steps taken by McDonald's to play down the French fries controversy and critically comment whether the company will be able to come out of this unscathed.