Question

Based on the company Mc Donalds

Identify and explain the domestic and international considerations for the company. Identify and explain the role and effect of government on the chosen company. Has Government helped or hurt it? how? Describe the importance and effects of ethical practices in the company. Has any ethical issues arisen in the last 20 years? what effect did it have?

Answer 1

A multinational company like McDonald's has been successful in opening different world ventures and become a house hold name across the world. The company is a part of the world's biggest junk food ventures and continues to grow even today. The company started with two brothers in America and expanded gradually. While setting up the unit for different nations, the reason the company is able to capture market in different regions across globe is that , they are able to tap into local tastes and preferences in the menu and customise it. Hence in domestic regions, the taste includes American preferences for spices and other taste along with meat which might not be a seller point for countries' like India where high spice tolerance and no meat is the focus for the company. Hence the domestic and international considerations vary significantly for the company.

The Country where the company wants to invest and set up a plant in, is usually having different rules and regulations compared with home country. In other words factors like the tax, setting cost , labour cost , business scope etc. Is partially a direct factor controlled by the govt. A country with cheap labour , is a better place for investment . But if the govt imposes high tax on performing and setting up of company, then govt restrictions are not in favour of company. Hence it depends on the policies , whether govt hurts or favour the company's business.

Following further to the chain, once the govt gets into business , ethical grounds decides if the company will survive for long run or not. Factors like demand and trust of consumers play a very important role in deciding the relationship the company is supposed to carry on. If the company is exploitative if labour rights, doesn't take into consideration the feedbacks of it's customers , the company is bound to loss the business in those grouds. Specially for companies like McDonald's , which is a hospitality based company, consumer is king.

In last 20 years many problems are faced by the chain. Popular was the problem in China where the chain supplied rotten meat to the consumers falling to a demand deficit due to decreasing popularity. This further posed a challenge to revive the market image in the country. Another problem was the same kitchen where veg and non veg was served to Indian which caused a huge hue and cry . This made the company pay concession to the state govt and also make two seperate kitchens for veg and nonveg.

Such issues arise when there is a lack of ethical monitoring. This only harms the company's reputation and their product's demand.