The Corporate Governance Project Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

McDonalds is a global company deals on the concept of serving with the franchise to the world with some of its favorite. The company started its first inception in 1967 and has expanded to more than 120 countries on six continents. The company has its franchise all over the world that it has more than two thousand five hundred restaurants. It includes rapid expansion in central Europe and the Middle East (McDonald's Corporation, 2011).

The objective of the company is to attain quality, services, values and cleanliness. In order to serve each customer the company employee more than 1.5 million people (McDonald's Corporation, 2011).


The organization mission is to become a unique and better than ever (Our Story).A multinational organization that has started from a small shop and in turn to global organization. From the start the company is committed to do right things.

Project Objective:

The project is undertaken in order to obtain the following objective:

To describe the point of view of Macdonald's, government as well as society about the Corporate Social Responsibility.

To identify the pressure on the business organization from society and government.

To describe the influence on government from Macdonald's to give them freedom to operate and from society to make laws and regulations to control the activities of business.

To explain how the business organization and government influence the attitude of society toward the corporate governance project.

Relationship between Business, Government and Society:

McDonald's have direct relationship between business, government and society and also have interdependencies among them. There are numerous interactions among them as all three entities are dependent on each other. The organization is food producing service industry thus society depends on the business for goods and services while business depends on the society for all the factors of production (McDonald's Corporation, 2011). The company has following strategies in order to achieve success.

Business Level Strategy:

The organization has "Broad Target" and for achieving the competitive advantage the company has adopted a strategy called "Differentiation" because they want their products highly differentiated.

Corporate Level Strategies:

McDonald's is expanding globally by increasing the number of outlets with basic maintaining standard of quality and test. Thus, company adopts global diversification strategy.

Social Level Strategies:

McDonald's is highly committed to serve the community and plays important role in attaining their corporate social responsibility. The company contributes funds for poor people, for the construction of Chaman School and also conducting project for under privileged children (McDonald's Corporation, 2011).


In the view of the business organization, McDonald is the most reputation and loving brand. Although, McDonald has strong competition than also has large customer segments of the consumers in which children are one of the biggest consumer groups. Thus, McDonald is the most successful fast food chain in the world (McDonal'd Corporation , 2009).

In today's day people are more concern and aware about their health issues and people also believes that fast food are not good for their health. Fast foods are the main cause of the obesity as well as it cause cancer. Thus, in order to fulfill their social responsibility McDonald has responded to the health y trend food and added healthy foods in their menu such as salad, other lighter option, and mashed potato instead of fried potato. MacDonald's has number of programs in order to address the issue of the corporate social responsibility (Figure 1) (McDonal'd Corporation , 2009). They are:

Farm to front counter

Best of green

Best of Sustainability supply chain

Sustainability Collaborations With NGO's

Sustainability Land Management Commitment.

McDonald's Priorities: Acheiving Sustainable Success

 Financial benefits of a corporate social responsibility:

After the inception of the company, it has approximately $200 million in grant through RMHC which translates into under $10 within a year. This is an approximate value of a year the company is continuously contributing to the social corporate responsibility and gaining financial benefits. The environmental responsibilities offers double green benefits (McDonal'd Corporation , 2009).

Pressure from Society and Government:

Society and Government is continuously keep putting pressure on the company to conduct the business in an ethical and appropriate manner. The company is operating i different countries and different countries have different laws and ethics as well as taxes the company is liable to follow all the rules and regulations. Similarly, the company is considering fulfilling their corporate responsibility in context to health, environment and society (McDonal'd Corporation , 2009). .


In the point of view of government, McDonald's promoting fast food is point of debate because it is not good for the health as it causes obesity while on the other hand the company is contributing its major part in the economic development of the company. The company is growing successfully and has financial and economical benefits (McDonal'd Corporation , 2009).

The government has its strong influence in regulating business and society as the government provides freedom in term of operating business but at the same time the company is subjected to fulfill their social corporate responsibilities. The government has regulated several laws and regulations in order to control the activity of business in terms of maintaining health and safety of the society (McDonal'd Corporation , 2009).


There is a very confusing point of view of society about McDonald. Large group of society is in favour of the company while other part is continuously criticizing the product of the company. Large part of the company loves the product their test, availability as well as minimum price but large part focus on the negative aspects of the products that the fast food is the main cause of obesity which results in several hear related disease and also a major reason for the cause of cancer. Although facing criticism from the large part of the society, the company is enjoying growth and success (McDonal'd Corporation , 2009).

Nature and Management of Social Responsibility:

Macdonald's is always try to serve the society for the betterment and development such as

McDonald's is actively performing for the welfare of the community, wherever the company has branches and franchises. For instance, the company has granted one million rupees to Lahore's mental hospital and also gift computers to Jinnah foundation.

McDonald's being a part of RMCCS introduce concept of part-time jobs and for summer vacations.

The company has nearly two hundred Ronald McDonald house in more than sixteen countries under which provides medical facilities for families of seriously ill children are who are treated by nearby hospitals.

(McDonald's Corporation, 2011)

Role of HR department:

McDonald's HR department plays vital role in the success of the company. The HR department role ranges from hiring the employee till their job satisfaction. They believe that employee satisfaction is a critical component which can be achieved by customer satisfaction. Therefore, they provide better compensation and wages, provide them better training and orientation. The main role of HR department involves Hiring Personnel, maintain workforce, provide them training, implement organization's goal and objective, motivate and inspire the workforce, maintain discipline and responsibility, offers them wide opportunity, update financial, tangible and physical resources as well as maintain Corporate Social Responsibility (McDonald's Corporation, 2011).

Principle of Corporate Governance:

McDonald's corporation's Board of Directors is responsible and entrusted for conducting the business affairs in an ethical, honest, diligent and fair manner. The company believes in the fact that good governance is a journey not a destination. Therefore, the company is committed to review their performance annually with an aim of improvement. McDonald is ensuring for the integrity in dealing with all stakeholders. There is continuously focus on the leadership in corporate governance as it is integral part of fulfilling their commitment to stakeholders (Corporate Governance Principles).


After analyzing all the aspects it has been concluded that McDonald's has adopted strategic planning in to maintain relation between the government, society and business which has good impact on the society. The company is fulfilling its social responsibility and managing business with the integrity.