KFC; Colonel Harland Sanders
Colonel Harland Sanders, the founder of KFC who started serving food to the travellers in Corbin, Kentucky, United States in 1930 which then open the first restaurant set name as Kentucky Fried Chicken in 1952. KFC has a humble start in the past but now it has become a multi-national fast food corporation which has 24000 employees (Hoovers, no date) and over 14000 restaurants (FOXNews, 2006) spread over 120 countries. It is said that KFC served 12 millions of customers per day around the world and is estimated to generate profits of US$ 12 billion per year. (KFC, no date)The amount of chicken consume by customers for a year is estimated 1 billion to meet its demand.
2. Dilemmas from Stakeholders' Perspectives
Spreading over 120 nations and cutting across multi-cultural and multi-ethnic divides which make KFC confront with many dilemmas. More contentious topical issues which rise by various stakeholders around the world will be confined in this ethic audit report.
In Hong Kong, the wages for the part-time workers per hour is just HK$16 and they were asked to rest for one week after three weeks working. This action is to avoid the employees from using the welfare like medical or accident insurance, unemployment or housing benefits and even annual vacation which will cause lots of money spending on these welfares.
KFC has been paying low wages to the part-time workers in many cities in China, which found by the China labour officials. In China, the legal minimum wage for an hour is 7.5 Yuan, but the part-time workers just receive 4 to 5 Yuan an hour which is underpaid. (Chinaethicgroups, 2007)This situation is not only found in Guangzhou but in many other cities too. KFC not only pay low wages to the part-time workers, it also makes the part-time workers worked like the full-time workers to avoid paying the benefits the part-time workers deserve like in Hong Kong. There are cases that KFC didn't assign their workers the minimum job hours required and the minimum wages deserve per month like the case in Beijing KFC of Sun and Zhang. (China Labour Bulletin, 2006) The workers' rights and interests have been harmed by KFC without any hesitation to reduce the cost spent by exploit the loopholes of the China's Labour Law which said by Shi Fumao. (China Labour Bulletin, 2006)
In October 24, 2005 Monika Samaan bought a Twister in Villawood's outlet in west of Sydney which then caused her to become crippled and suffered brain damage from salmonella poisoning. And now she is quadriplegia and having intelligence disability and liver dysfunction which developed from salmonella encephalopathy and salmonella septicemia. (Kamper, 2009)Same situation occurred in Colorado where Gianni Velotta also infected the salmonella bacteria which almost cause death. (Dateline, no date)
In Texas, there is a case of a woman bought a sandwich through the KFC drive-through which later found out baby roaches inside the sandwich. (Reaves, 2009)
In Hong Kong, the employees threw the remaining chicken into the trash before they close up the door, if there is any customer came in before the closing time, the employees will take the chicken from the trash and straight served to the customers. This action is approved by the manager as the manager wanted to save money and the employees wanted to get off work on time which makes an agreement in that action. (canon, 2008)
People nowadays are more concerned about their health compared to last time; this is because with a healthy body, they can earn wealth without paying extra expenses on other unrelated things like seeing doctor, buying medicine and so on. Therefore, people now is more concerned on what they eat and what contain the food have in it, so that they can avoid from unnecessary sickness.
People are not only concerned what KFC are frying, but the oil they used to fry which contained tran's fatty acid. This is because fat can cause lots of sickness like heart diseases, obesity which might cause cancer, Diabetes and more. (Brown)According to Centre for Science in the Public Interest (CSPI), if we eat a three-piece Extra Crispy combo meal in a day, we will gain 15 grams of trans fat which has over exceed the trans fat a person should have for a week. (RADHAKRISHNAN, 2006)According to a letter written by CSPI to Federal Trade Commission, the television advertisement of KFC is advertising that eating their chicken as part of healthy and balanced diet, however the fried chickens that contained saturated and trans fat, cholesterol and sodium which are over the minimum require for a day, are not suitable to fit inside a healthy and balanced diet stated by KFC. In this letter, KFC also stated that there are only 11 grams of carbohydrates and 40 grams of protein in their original recipe chicken which is healthy for us, but the salient facts that customers should know are being covered by KFC like the amount of saturated and trans fat, sodium the chicken contained. (F. Jacobson, 2003)
In 1995, KFC first entered India and until now still in controversies midst. According to India's Prevention of Food Adulteration Act, 1954, KFC's chicken contained almost three times more monosodium glutamate which known as MSG, an ingredient for flavor enhanced as the act allowed. (icmrindia.org, 2004)
2.4 Environment Pressure Group
KFC selling their fried chicken to over 12 million people around the world, therefore chicken is essential for them. 1 billion of chickens have been killed by KFC just to supply the restaurants enough chicken to serve the customers. People for the Ethical Treatment of Animals (PETA) is the organization protest against KFC for the cruelty of breeding and killing chicken.
There is a case in Korea where Pamela Anderson, a member of PETA Asia-Pacific, send a DVD and wrote a letter to Mr. J.S. Ryu, the CEO of the fast-food chain Korean operations, on the chicken abuses. In the letter, she urge Mr Ryu to contact the parent company of KFC, Yum! Brands headquater demanding they eliminate their suppliers of worst chicken abuses that they use a hot blade to cut off the baby chicken's beak without injecting any painkiller. Not only that, the chicken's wings and leg were broken as they were crudely gathered for the slaughter.
A friend of hers at PETA investigated and found out that the chicken are bred and drugged to make them grow faster and larger regardless the normal growth period makes them crippled as their weight is lighter than normal growth chicken and her friend also found out that millions of chicken are dunked into hot water tank regardless their consciousness. (The Seoul Times, no date)
In West Virginia, the slaughterhouse for KFC, it has documented that the workers there are not using the regular ways in slaughtering the chicken but tear the chicken's head off lively, stomp the chicken violently, which is cruel and immoral. (KentuckyFriedCruelty, no date)
In India, the situation is more serious than other place, the PETA activists protest against KFC as there were no reply from KFC after they wrote a letter to KFC's parent company. The crippled chicken campaign was held to force KFC to improve their poultry farm because of the alleged ill treatment of birds.
3. RELATIVE IMPORTANCE
It is obviously that the stakeholders have raised many dilemmas relating to KFC as KFC has lost its ethic values in business. Ethic values are important in conducting or operating a business, this is not relating to how a business earn their profits, turnovers, but how they gain the trust of the people, how they take the morality into their business which will not affect their goodwill. By taking the above issues into consideration, customers and employees raised most issues and being aggravated by authorities and pressure group.
In business, labour has been a major production cost no matter in which territory, therefore maintaining the labour costs and keep the labour costs as low as possible is what they will do as a whole. The way to maintain a low labour cost is to employ young workers or we called as child labour, because they can be paid lower wages than normal workers and they cant enjoy the welfare which every company has for workers as they do not know anything about the services that they can enjoy when they sign into an unfair contract. Employees are entitled to have a minimum wages that set by the law and the right to the welfare a company has, but in KFC case, employees are underpaid regardless of the regulation set by the countries and they do not have the right to claim for any insurance, paid holiday, unemployment and other welfares as the contract stated. According to the deontological ethics theory, KFC is doing something that is regardless of the consequences whereby the employees are young and underpaid which is challenge to the countries labour law because the employees have the right that should not be sacrificed for the large benefits. (Desjardins, 2009)
In Monika Samaan's case, KFC felt sympathy for the girl's plight, but said that it was not their responsibilities. (ABC News, 2009) KFC bear no responsibilities for all the food-poisoning incidents as it is just a small portion of people (The Sdyney Morning Herald, 2009) and they has comply with the ethical theory of utilitatrian. In this case, the utilitarian ethical theory is flaw because the issue here is not about the happiness of other people, but the responsibilties to check and analyse the issue to comfort the feeling of the victims, not deny all the responsibilties.
As for the case in Hong Kong, the manager approve the action of serving the customers the foods from trash before the closing time which done by the employees, this has totally betray the trust of the customers and the conscience the manager and employees should have towards the customers. The intention for them to do this sort of things is they want to get off early and the consequences are not in their considerations. Their action is based on the ethical theory intentions. (Jones, Parker, & Bos, 2005)
KFC clearly stated that no way they will be responsible for this tragedy. (KFC Australia, 2009)
The reasons why we evaluate customers are because they are the basic of every business operated by KFC and they can deal huge impact towards KFC. The relationship between customers and KFC itself is unable to cut off, because without the customers, there is no profit gain and KFC would have straight announce bankruptcy. Not only that, customers also help in spreading the news which indirectly helping KFC advertise their products and earn more profits. Therefore KFC shouldn't ignore the dilemmas raised by customers because it is an alternative way to improve their services which can satisfy what the customers want through the theory of utilitarianism for the maximum number of happiness. (Desjardins, 2009) KFC has announced the use of new oil, a low linofenic soybean oil which replaced the hydrogenated soybean oil and will be scheduled nationwide in the end of April 2007. All fried products will contain zero trans fat after th complete of transition. (Emax Health, 2006)
3.4 Environment Pressure Group
One of the major dilemma for KFC is the cruelty towards chicken, which has protested by People for the Ethical Treatment of Animal (PETA) for many years in many different countries. In Korea, from the letter written by member of PETA Asia-Pacific and a dvd, it shows that KFC has been treating the chicken poorly, cutting off the chicken's beak without any painkiller, chicken's legs and wings are broken as they are all squeezed like asrdin in can inside the slaughter house waiting for slaughter. (The Seoul Times, no date) As in West Virginia, KFC has promised PETA that it was taking animal welfare seriously which two years later discovered by PETA that KFC was treating the chicken poorly and immorally instead of treating the chickens as promised. (KentuckyFriedCruelty, no date) In India, the protest on the cruelty of chicken make by PETA was useless as KFC completely ignore the action taken by PETA. (icmrindia.org, 2004)
The theory of utilitarianism was applied as KFC has yield the maximum happiness of 12 million customers where as only 750,000 members of PETA are protesting against KFC chicken policy. Although KFC has yield the maximum number of happiness but it failled to comply with the utilitarian ethical theory due to the unfair and unjust. (Desjardins, 2009)
KFC has used the Animal Welfare Advisry Council as a decoy to disguise themselves from PETA, said by Adele Doughlass, one of the resigned members of the KFC's Animal Welfare Advisory Council. (KentuckyFriedCruelty, no date) Based on deontological ethics theory, KFC put Animal Welfare Advisory Council as a decoy, which means KFC does not care what the consequences the action takes, but will get the benefits it wants from the process that sacrificed others' right. (Desjardins, 2009)
4. KFC's Ethical Best Practices and Values
Although KFC is facing lots of dilemmas problem which has brought side effects to its reputation and fame, but KFC still maintain its own policy of making charity to the poor and the hunger. According to KFC's newsroom from its website, from September 29, 2009 until end of October 2009, KFC will be closing their restaurants serving those in need for free, which will convert their restaurants into “World Hunger Relief Kitchens” during lunch time. Yum! Brands, the parent company of KFC is launching an annual World Hunger Relief campaign in helping to stop world hunger, raise funds for United Nation World Food Programme (WFP) and other organizations, the awareness and volunteerism. The reason Yum! Brand and KFC launch the campaign because there are over 1 billion hungry people due to catast,golbal economic downturn, demand increased from developing countries in Asia and South America. KFC is taking the ethical theory of virtue into their business as they provide themselves and the others the opportunities to do charities. (KFC, 2009)
Another good thing about KFC is their scholarships which known as The KFC Colonel's Scholarships Program, and it has the best scholarship in the fast food chains compare with other chains. KFC offered their scholarships every year and it is a solid paying scholarship which paid your tuition fees and other fees like books, room and board. Every year there are 50 to 60 applicants can get up to $5,000 and a maximum of $20,000 for completing a bachelor's degree for the post-secondary students within their residence state if they apply for and the scholarships are essentially a charity which sponsor by KFC itself, its employees, franchisees and KFC patrons. This is a step that help most students that have finance problems which cause them to stop furthering their study, but with the scholarship support by KFC, they can further their studies and in return they will help more people who are in needs. (ScholarshipsGrants, no date) The ethical theory of corporate social responsibilities apply on the above because the scholarship given out not only from KFC itself, but the money from the publics and it is helping those in needs for furthering their studies, it also applied the utilitarian ethical theory, which the scholarship has yield 50 to 60 applicants' happiness among the applicants. KFC award the scholarship is to help the countries to get more talented people in order to improve the social standard.
The amount of MSG contained in the food should be reduce as much as possible, although MSG can make the food taste nicer, but it is a slow poison that cause sickness like normal sick. The amount of MSG used in food should not over the level set by the governments, this is because for the health of the public.
KFC in Hong Kong should make a change in its managements and employees, because a company's reputation is build from the basic and the attitude of the employees affect the most. KFC should check the behaviour of the employees before officially employ them, this can help to reduce the chances for this incidents occurred again. Employees with good behaviour and virtue will help the company gains more profits because they give the customers a good impression so that the customers will continue to purchase their products.
KFC should change their wages system for the employees under age or part-timer, because everything in the restaurants need employees to operate, without them nothing will work out and no profits will be gain. Although the payment to employees are a large amount, but paying them the corresponded wages will make them work more enthusiastic and more efficiency. KFC can also give out a bonus to the employees if the transaction for the year increased compare to the previous year, this helps boost the morale of the employees and makes them think that they are worthy to the company and they will work harder for the company.
KFC shouldn't step aside and denies all responsibilties when the incidents happened, KFC's management should stand out and take the responsibilties to solve the incidents, so that the reputation will not be affected. Therefore, KFC should double check the employees, the managements, the restaurants for the cleanliness of restaurants, the health and safety of customers, and the ethical values a business should have, so that the dilemma wiil notoccured again.
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