Ethical Dilemmas Faced by KFC

1.0 Introduction

There are many ethical dilemmas that an organisation face and one of the organisations which faces major dilemmas is the Kentucky Fried Chicken. Firstly, the main objective of this report is to provide a discussion about the dilemmas faced by KFC and the ethical dilemmas that the company encounters. Secondly, evaluate the relative importance of these dilemmas and how Kentucky Fried Chicken is currently dealing with them. Then introduce the Kentucky Fried Chicken ethical best practices and values. Last give recommendations and strategic options to Kentucky Fried Chicken.

2.0 The main ethical dilemmas facing Kentucky Fried Chicken

KFC is the most popular fast food brands in the world. The company was found by Colonel Harland Sanders in 1952. 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. (Source: KFC office website: http://www.kfc.com/ )

With the development of the living standard of the people. People can found obviously, more and more people change the health and nutritional attitudes and behaviours. People more concerned with their health and figures than ever before. Obviously, the reason for this increased concern is because of the fact information be reported in everywhere and every reports and research about fast food has no nutrition. It is junk food. It can not eat much. and so on. This is a dilemmas for KFC have faced, because it has already gain the reputation of a fast food that continuously provides greasy unhealthy food; .The company should do something about potential increase of shareholder value.

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 Kentucky Fried Chicken is using oil which contains Tran’s fatty acids. This kind of oil is noted to increase cholesterol and even increased the risk of having heart disease. 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.( Source : Ethics Management KFC)

China has large population. To KFC, it has a large market and has got great success in china. It happen a great important event ‘ADK’. KFC use food ingredients for cooking with the Sudan Red in their new product called New Orleans Roasted Wing. China’s health ministry found it and stops KFC using the food ingredients for cooking with the Sudan Red. Let KFC use the safety food ingredients for cooking instead. ( Source: KFC Falls Prey to Sudan I)

The shareholder of the Kentucky Fried Chicken Corporation in order to gain competitive advantage, reduce the cost. Kentucky Fried Chicken is using oil which contains Tran’s fatty acids and food ingredients for cooking with the Sudan Red. Do the bad job; it is not act as supervisory role.

The supplier supplies the oil which contains Tran’s fatty acids and food ingredients for cooking with the Sudan Red. It price hikes for exorbitant profits. This kind of behavior was a fraud.

The government agency in case of finding defects, take corrective action accordingly. Then let the company to use healthier cooking products instead. It is protecting the interests of consumers.

3.0 Evaluate the Kentucky Fried Chicken dilemmas and Kentucky Fried Chicken deal dilemmas

3.1 Elevate the Kentucky Fried Chicken dilemmas

KFC use the oil which contains Tran’s fatty acids and food ingredients for cooking with the Sudan Red in their new product called New Orleans Roasted Wing. It influences the brand and brings some negative effect, such as: bad press, media report, even in some countries, people demonstrated for boycott Kentucky Fried Chicken.

Kentucky Fried Chicken may have said that they are not using these kinds of oils and food ingredients for cooking with the Sudan Red in their new product called New Orleans Roasted Wing to adhere to ethical standards of protecting the health of their customers. In order to increase international competitiveness and lead in competition than any other competitors, such as, McDonald, Subway, Pizza-Hut and so on.

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. Kentucky Fried Chicken should then realize that the company 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 the company should be responsible in maintaining that healthy and nutritional foods which future generations will need as well so as to survive.

But Kentucky Fried Chicken realizes the gravity of the situation. It stopped use the kinds of oils and food ingredients for cooking with the Sudan Red and take effective steps to plan a rescue operation for the dilemmas. The Kentucky Fried Chicken has its own principle. It is customer focus.

The company’s ethical stance should not be based on short term goals. The company is still encountering negative issues brought about by its negligent behavior. But these efforts do not directly address the problem. The company is still encountering negative issues brought about by its negligent behaviors.

3.2 Kentucky Fried Chicken deal dilemmas

KFC though the media report, make a public apology for use the oil which contains Tran’s fatty acids and food ingredients for cooking with the Sudan Red. KFC also make a promise for consumers in general. Never use the oil which contains Tran’s fatty acids and food ingredients for cooking with the Sudan Red. It has promised a thorough investigation into the affair. KFC find a sound business firm to cooperation. Let the government agency reinspection.The firm dropped its supersizing options, and put a range of new healthy options on the menu, including salads and grilled chicken flatbreads and so on. Due to use the oil which contains Tran’s fatty acids, provide some negative effect, it make the consumer reduce. Overall sales are down. So KFC make the promotion, like produce economic suite, increase profits by reducing costs or distribute special discount voucher in public places also can download from KFC official website.

4.0 Kentucky Fried Chicken best practice s and Value

Kentucky Fried Chicken often join the in public service activities and committed to its communities. Kentucky Fried Chicken in China often giving back to the community.

From 1992 to 1997, the Kentucky Fried Chicken contributes funds for Chinese” hope project” every year. It has sponsored the “One Million People’s Love Movement” and the “1 (family) + 1 (dropout) Help Movement,” mobilizing the entire society to help dropouts return to school. From the 1996 to 1997, only two years, the collection of funds runs up to 2.5 million. (Source: KFC’s community activities )

May 12th, 2008. The Sichuan province of China suffers an earthquake. Kentucky Fried Chicken contributes funds15.8 million through the China Charity Federation, Chinese Red Cross Foundation and China Foundation for Poverty Alleviation. Except the donate money, Kentucky Fried Chicken also offer the supply of some essential goods like purified water, bread, sunshade, health gauze mask ……for earthquake in Sichuan . (Source: List of Donors of Sichuan earthquake )

Kentucky Fried Chicken contributes funds. One aspect is Kentucky Fried Chicken make contribute to social benefit. On the other hand, it will bring the intangible benefit to Kentucky Fried Chicken. Such as, join the public benefit activities, Brand name awareness will increase. Kentucky Fried Chicken has attracted a lot of publicity. For example: Kentucky Fried Chicken joins the public benefit activities, the media report, newspaper and internet will report the current events. People will know the best practice of Kentucky Fried Chicken. The Kentucky Fried Chicken behavior left public a very good impression. This is intangible benefit, intangible asset. Brand name awareness of Kentucky Fried Chicken was improved.

Kentucky Fried Chicken buy the chicken, vegetables, bread, packing chest equipment and building construction materials from materials suppliers. Kentucky Fried Chicken evaluate and to train the related materials suppliers.

The kind of behavior bring the tangible benefit to Kentucky Fried Chicken, It helps the materials suppliers improve the product quality. Kentucky Fried Chicken can use good raw material, make tasty food.

5.0 Recommendation to Kentucky Fried Chicken

With the dilemmas faced by Kentucky Fried Chicken, the recommendation for the company should be able to use an ethical management strategy that will uplift the image of the company.

5.1 The way for creativity spread

Kentucky Fried Chicken though the media, internet and other ways to uplift the image of the company. For example: The new advertising creative design is remarkable. In a short period of time, KFC’s brand image will be into the minds of consumers. Looking back the past three years, Kentucky Fried Chicken ad is easily find, KFC more often reflect the image of its localization. Through nutrition, health, and thanksgiving brochures design, it has let the customer out from the “2005 Sudan incident” shadows. It is more of recognition of its brand and products.

So it needs creativity of media to spread. In the market, it should confirm and locked on target customer. Though creative advertising, to achieve the product image and brand effectively increase and promotion. Kentucky Fried Chicken can advertising on bus. It can show the KFC’s slogan an also can show the promotion information.  It should related people’s life.

5.2 Innovative promotions

Sales promotion is an important market tool to enhance product sales. Meanwhile, we also can see that this was also an important way to show the corporate brand image. For example: In Malaysia, McDonald makes a promotion. It is Mc Value lunch 12 noon-3 pm, Monday-Sunday. It gets good effect. So when Kentucky Fried Chicken in the design of promotional programs, there must be new and unique. Let the consumer and media also can join it, the media reporting and dissemination initiative. The promotions plan can get the consumer’s allow. Corporate image and brand in their promotional activities have been further consolidated and increased.

5.3 Take effective measures

Due to more and more people change the health and nutritional attitudes and behaviours. People more concerned with their health and figures than ever before. Obviously, the reasons for this increased concern is because of the fact information and KFC use the ingredients include hazardous substance.

KFC should take effective measures. KFC can establish dietician department. Make the healthy and nutritious food and make the nutritional survey and food inspection report to the product. The dietician department also should to make a food safety inspection. In order let public set their mind at rest, KFC can invite the food inspector to food inspection.

In respect to choice the suppliers, it can’t careless .It should choice a sound business firm and prevent bad things from happening again.

6.0 Conclusion

Business ethics is currently a very prominent business topic, and the debates and dilemmas surrounding business ethics have tended to attract an enormous amount of attention from various quarters. For a start, consumers and pressure groups appear to be increasingly demanding firms to seek out more ethical and ecologically sounder ways of doing business. The media also constantly seems to be keeping the spotlight on corporate abuses and malpractices. And even firms themselves appear to be increasing recognizing that being ethical (or at the very least being seen to be ethical) may actually be good for business. Ethical issues confront organizations whatever line of business they might be in. (Source; business ethics 2nd edition, author; Andrew Crane, Dirk matten.)

In a word, it can be said that business ethical is very important to a business organization. It can help a business organization easily earning the respect of clients and win general acclaim. 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 KFC Company must be able to ensure that the products that they offer are healthy and nutritional, so that it can make sure that Kentucky Fried Chicken can gain customer trust, loyalty, respect and the corporate image will be protected and developed.