The case study illustrates us how the CSR manager of McDonalds Austria

explains the efforts taken by McDonalds to maintain their corporate social

responsibility and also explains the customers view of McDonalds corporate
social responsibility. The Case study report specifies that the customers did
not perceive McDonalds as a social responsible company. In this report, we
are coming up with some recommendations including marketing strategies to
make the reach of CSR activities of McDonalds to its customers.

History of McDonalds
McDonalds was first started in 1940, When Dick Richard McDonald and his
elder brother Mac Maurice opened a little restaurant in San Bernardino,
California. In the beginning it was called as car hop restaurant, where the
food was delivered to the customers car outside the restaurant. Then in the
late 1940s both the brothers developed a new business in order to improve
their operation. In this, they reduced the product range, decreased the prices
and replaced the car hop system by self - service at the counter. In 1954, a
52 years-old salesmen named Ray Kroc, entered the McDonalds brothers
restaurant. He was impressed by the way the brothers managed to run the
restaurant due to which he wanted to become a part of it. He entered the
business with the view of expanding the concept all over US, later he ended
in becoming the exclusive franchise agent of McDonalds and founded the
McDonalds System Inc.
In 1961 Ray Kroc started to run the business on his own, while the McDonald
brothers activities were restricted to their one restaurant in St. Bernardino.
Since the brothers were not interested in expanding the business, Ray Kroc
bought them for a cost of 2.7 million. Then lately McDonalds continued to
grow. Having captured almost the entire US market, McDonalds planned to
expand overseas. In 1967, the first restaurant outside US was opened in
Richmond B.C., Canada. After that they also opened restaurants in Germany,

England, France, Australia and Japan. The first restaurant in Austria was
opened in 1977 at Schwarzenbergplatz in Vienna.
Now, McDonalds is the clear market leader in the fast food industry. They
are operated in approximately 117 countries having more than 32,000
restaurants and serve about 60 million customers a day.

Corporate

Social

Responsibility

Efforts-Companys

Perspective
Christopher Meyer the CSR manager of McDonalds, Austria explains the
current CSR policies that are been employed in company. The CSR efforts can
be divided into several categories, such as,

Environmental Commitment
Customer Commitment
Suppliers Commitment
Employees Commitment
Sports Commitment

Environmental Commitment:
The

most

important

aspect

in

terms

of

McDonalds

environmental

commitment is the companys sustainable waste management. It is based on

three main principles such as waste avoidance, waste reduction and
recycling. In the event of reducing the amount of waste produced, they
started using eco-friendly packages and plastic spoons were replaced by
wooden spoons. Together with the other anti-littering measures has made
Austria to reduce their waste by more than 10% every year since 1993. They
solemnly rely on their recycling concept which helps them to recycle up to
95% of the total waste generated. In some restaurants, customers who bring
back empty packages are being rewarded with free soft drinks thereby
encouraging the customers to go eco-friendly. In addition to the waste
management, energy management is also one of the important component
of

McDonalds

environmental

program.

Where

by

using

the

latest

technologies the company continuously aims at reducing the consumption of

electricity and water.

Customer Commitment:
McDonalds are very much concerned about the customer commitment,
which can be evidently seen in the low prices and the superior quality of food
being offered. The high level of food quality is been ensured by regular
quality checks. Mostly McDonalds tires to make use of the local products. In
Austria few products are AMA-certified which indicates that they are being
purchased from local suppliers. The products that are being imported should
meet MAAP-standard in order to assure that the products are of superior
quality. McDonalds constantly adapt their product range by introducing
healthier products such as wraps, different salads and chicken menus.
Sometimes they also hire mystery shoppers in order to test the cleanness of
the restaurant, the friendliness of the staffs and the quality of the food.

Suppliers Commitment:
McDonalds relationship with the customers is purely based on mutual trust,
reflected in long term and sustainable business relation. The code of conduct
indicates the heart of this relationship. Code of conduct is the agreement
between McDonalds and their suppliers which ensures a superior product
quality and fair working condition for the employees. In turn, McDonalds
offers their suppliers fair prices, regular purchases and big order volumes.

Employees Commitment:
McDonalds consider their employees as the companys most valuable
resource. In addition to the secure work places and fair wages, it offers their
work force flexible work options and part time models. Teenagers are being
motivated by offering apprenticeship to them, which may serve as the basis
for a later career at McDonalds. The workforce also have an option of
participating in the education program known as MCampus at the heart of

this program there is management education program called MAP which

prepares employees for the position of restaurant manager. Another
opportunity offered to the employees is called McPassport program, which
allows them to work in other McDonalds restaurants across Europe.
Additionally, McDonalds Austria has introduced the McStart program which
focuses to give disabled people the chance to find an appropriate job within
McDonalds.

Sports Commitment:
For almost 25 years, McDonalds has been sponsoring various sports events
all over the globe, such as the UEFA European Football Championship, the
Olympic Games and the FIFA World Cup. In addition to their commitment
towards sports, they also try to serve the community in various other ways,
such as they have an important role in stimulating the local economy.
Another important aspect is the non-profit organization Ronald McDonald
House Charities. They are located near hospitals and provide parents of
heavy ill children with temporary place to stay while their kids are in hospital.
Currently there are four Roland McDonald Houses in Austria.

Peoples Perspective of McDonalds CSR Activities

Promoting Unhealthy Food
McDonald's promote their food as 'nutritious', but the reality is that it is
junk food - high in fat, sugar and salt, and low in fibre and vitamins. A diet
of this type is linked with a greater risk of heart disease, cancer, diabetes
and other diseases. Their food also contains many chemical additives,
some of which may cause ill-health, and hyperactivity in children. People
also feel that McDonalds foods are creating dangerous health problems
such as Heart diseases, obesity, Dangerous increase of Cholesterol level
in the blood, Diabetes and similar symptoms. They are also referencing

the documentarySuper Size me in which Director Morgon Spurlock

conducted a social experiment in fast food gastronomy. He attempted to
consume only the food items available on the McDonalds menu including
water and came up with the disastrous results. He gained 25 pounds
which resulted severe depression, headaches and lost much of his energy.
This created the bad image about McDonalds among the customers and
public.

EXPLOITING WORKERS
Customers also believe that workers in the fast food industry are paid low
wages. McDonald's do not pay overtime rates even when employees work
very long hours. Pressure to keep profits high and wage costs low results in
understaffing, so staff have to work harder and faster. As a consequence,
accidents (particularly burns) are common. The majority of employees are
people who have few job options and so are forced to accept this
exploitation, and they're compelled to 'smile' too! Not surprisingly staff
turnover at McDonald's is high, making it virtually impossible to unionise and
fight for a better deal, which suits McDonald's who have always been
opposed to Unions.

DAMAGING THE ENVIRONMENT

Although McDonalds is taking serious initiatives to promote the sustainable
environment but majority of the customers are not aware of this fact and
understand that McDonalds have at last been forced to admit to using beef
reared on ex-rainforest land, preventing its regeneration. Also, the use of
farmland by multinationals and their suppliers forces local people to move on
to other areas and cut down further trees. McDonald's are the world's largest
user of beef. Methane emitted by cattle reared for the beef industry is a
major contributor to the 'global warming' crisis. Modern intensive agriculture

is based on the heavy use of chemicals which are damaging to the

environment. Every year McDonald's use thousands of tons of unnecessary
packaging, most of which ends up littering our streets or polluting the land
buried in landfill sites.

SWOT Analysis:
Strengths
McDonald is very concerned about providing low cost and superior
quality foods to the customers and it also forms the important aspect
of the McDonalds Business Strategy.
Now a days, McDonalds has started printing nutritional information on
the packaging and it promotes the good image among the public.
Resulting from its high sales, McDonalds can invest its profit into the
existing CSR programs.

Weakness
Promotion of unhealthy foods which affects the brand image of
McDonalds.
Poor marketing of CSR activities make the customers itself not aware of
it

Opportunities
McDonalds has the positive and strong commitment towards the
society and the environment. Through Improvisation of its current
strategy, it can develop an honest and real brand image.

 Since people are aware of the dietary foods and healthy lifestyle.
McDonalds has the lot of opportunities to increase sales and positive
image by promoting healthy and organic foods across its Stores.

Threats
Growing awareness among the medical and scientific community and
documentary Supersize Me causes a great pose of threat to McDonalds
brand image.
Stronger competition from healthier counterparts such as subway also
creates a great threat McDonalds.

Recommendations
Promotion of healthy diet, such as fresh fruit packs, baby carrots,
vegetable nuggets, milk, fruit juices and organic foods will create a

good image among the public.

McDonalds advertisements

seems

to

be

emphasizing

their

advertisement and caring targeting more on children instead of adults.

Hence, new campaigns can be organized to promote healthy eating
and exercise habits.
Currently there are four Ronalds house charity in Austria, by
increasing the number of Charity houses and also conducting fund
raising events in public areas can cause a positive influence on people
about the corporate social responsibility of McDonald.
Advertising about the social responsibility activities of McDonald in
medias. It can be indicated as a good communication strategy for the
promotion of thei0r CSR activity.

MKT 40970 MARKETING MANAGEMENT

Case Study Report
McDonalds CSR Challenge

Group Members
Philip Samson Francis

14203448

Shriram Sridhar

14201505

Snigdha Nath

14203757