PARTIAL FULFILLMENT OF THE COURSE REQUIREMENT IN MANAGEMENT 21

Submitted by: ALMIRA A. CINCO RENALYN C. BATALLONES KIM VANESSA A. BELTRAN Submitted to: Prof. Ermelo J. Sanchez

September 15, 2010

McDonald’s Corporation:
Environmental Awareness

Prepared by: Almira A. Cinco 2nd year- BCS-Management

GREENING THE MANAGEMENT Before we get acquainted on how a certain company promotes its environmental awareness, let us first know what does “greening

of the management” signifies, How an organizations go green and What other related approaches can we consider in greening the management to promote a company’s social obligation, social responsiveness and social responsibility. In today’s world, views of social responsibility that are held by organizations, the government and the general public have changed dramatically over the last 100 years. Today’s organizations need to be aware that people want to see more socially responsible companies. A large proportion of social responsibility is taking responsibility towards the natural environment. It wasn’t long ago where companies were able to get away with simply dumping their sewerage and waste products from their production and just ignoring it or covering it up. It is now, however that many laws regulate the disposal of waste and companies are finding themselves having to become more socially responsible in their release and disposal of pollutants. A trend toward proactive environmental management is being accelerated by public pressures on governments almost everywhere to assure a cleaner environment. This means that societies need for a cleaner environment is becoming more prominent as we move on to the future and resources are becoming scarcer. The government regulations on environmental cleanliness and pollution have become more stringent and are coming down harder. Historically, efforts to reduce pollution were led by regulators and viewed as an additional and often significant cost. Pollution gained a reputation from both regulators and companies as a problem that required either treatment or in an extreme case.

McDonald’s Corporation
McDonald's is the world's #1 fast-food company by sales, with more than 31,000 flagship restaurants serving burgers and fries in more than 100 countries. Almost 30% of its locations are company-owned; the others are run by franchisees. While most of the company's eateries are free-standing units, it does have some quick-service kiosk units located in airports and retail areas. Each unit gets its food and packaging from approved suppliers and uses standardized procedures to ensure that "a Big Mac purchased in Pittsburgh tastes the same as one bought

in Beijing". McDonald's also owns the Boston Market and Chipotle Mexican Grill fast-casual chains. McDonald's has been the target of criticism for allegations of exploitation of entrylevel workers, use of sweatshop labor to produce "happy meal" toys, ecological damage caused by agricultural production and industrial processing of its products, selling unhealthy food, production of packaging waste, exploitative advertising (especially targeted at children, minorities, and low-income people), and contributing to suffering and exploitation of livestock. McDonald's' historic tendency towards promoting high-calorie foods such as French fries has earned it the nickname "the starchy arches". Despite of the said criticisms given to the company, McDonald’s Corporation has always been aware in some other concerns regarding the “Greening of the Management” that promotes Environmental Awareness. Here are some environmental advocacies that the company is in connected to:

McDonald's a "Green Business"? I Resign (May 19, 2003): "Increasingly, corporations such as McDonald's have tried to direct the concept of a green business to recycled tray liners, reduced waste stream, and other molecular flows. Those are important issues and require our attention and diligence. But doing so does not make a business green. Green refers to the environment, to ecology. It is about the awareness that we are part of a complex living system, not simply trying to be part of a short term fix. Integral to that system are human beings-their lives, their bodies, their wages, and how they are treated and respected." On Corporate Responsibility: A Ronald McDonald Fantasy (June 2, 2002): "McDonald's April 14 "Report on Corporate Social Responsibility" is a lowwater mark for the concept of sustainability and the promise of corporate social responsibility. It is a melange of generalities and soft assurances that do not provide hard metrics of the company, its activities or its impacts on society and the environment." Greenpeace Denounces Food Industry Double Standard on Gene-Altered Ingredients (August 26, 1999): "Greenpeace is calling on Nestlé, McDonalds, and Pillsbury to end their double standards in selling genetically engineered foods to European consumers and U.S. consumers. These food companies keep the use of genetically engineered ingredients secret from U.S. consumers while making pledges to European consumers to avoid those ingredients." Interview Transcripts: Sue Branford (July 1996): "Well, I actually think McDonald's are lying. I think it's virtually impossible for a beefburger producer in Brazil to be operating without buying some beef which comes

from areas of Brazil which have been involved in serious environmental damage."

Animal Welfare

In 2003, McDonald's shareholders requested that the Board of Directors issue a report to shareholders by October 2003, reviewing McDonald’s animal welfare standards with the view to adopt and enforce consistent animal welfare standards internationally. Focusing on the disparity between McDonald's US and UK policies governing animal welfare and their policies for other international operations, the shareholders noted: "Our company has not made known any global program. McDonalds.com makes no reference to improved conditions in the raising of any animals (other than laying hens), transportation of any animals, use of experts, any programs or evaluation methods, performance objectives,or any process, programs, plans, or progress outside the U.S." Source: PETA, 2003 McDonalds enters animal cruelty debate (April 2, 2002): "Shareholders in fast-food giant McDonalds are to be given the chance to vote on whether the chain should introduce animal welfare standards worldwide." McDonald's and Animal Welfare: An Uphill Battle? (February 28, 2002): "Several years ago, PETA launched a campaign against McDonalds. In response, a barrage of columnists, radio DJs, and television personalities condemned the campaign for being too graphic. Since the time that PETA launched that campaign, McDonalds Animal Welfare Council had laid down several new sets of guidelines regarding the well being of the animals they farm. But what are they and will they be sufficient?" Slaughterhouses Butcher Animals Alive, Review Finds (May 7, 2002): "It takes 25 minutes to turn a live steer into steak at the modern slaughterhouse where Ramon Moreno works. For 20 years, his post was "second-legger," a job that entails cutting hocks off carcasses as they whirl past at a rate of 309 an hour. The cattle were supposed to be dead before they got to Moreno. But too often they weren't..." June 19, 1997: In the verdict for the infamous 'McLibel' case, Justice Bell substantiated the claim that McDonalds was "culpably responsible for cruel practices in the rearing and slaughter of some of the animals which are used to produce their food..."

Environmental record
In April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste from the restaurants were collected by Veolia Environmental Services and used to produce energy at a power plant. McDonald's plans to expand this project, although the lack of biomass power plants in the U.S. will prevent this plan from becoming a national standard anytime soon. In addition, in Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks. Furthermore, McDonald's has been using a corn-based bioplastic to produce containers for some of their products. Although industries who use this product claim a carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic does not break down in landfills as efficiently as other conventional plastics. The extra energy it takes to recycle this plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams, causing other recycled plastics to become unsaleable. The U.S. Environmental Protection Agency has recognized McDonald's continuous effort to reduce solid waste by designing more efficient packaging and by promoting the use of recycled-content materials. McDonald's reports that they are committed towards environmental leadership by effectively managing electric energy, by conserving natural resources through recycling and reusing materials, and by addressing water management issues within the restaurant. In an effort to reduce energy usage by 25% in its restaurants, McDonald's opened a prototype restaurant in Chicago in 2009 with the intention of using the model in its other restaurants throughout the world. Building on past efforts, specifically a restaurant it opened in Sweden in 2000 that was the first to intentionally incorporate green ideas, McDonald's designed the Chicago site to save energy by incorporating old and new ideas such as managing storm water, using skylights for more natural lighting and installing some partitions and tabletops made from recycled goods. When McDonald’s received criticism for its environmental policies in the 1970s, it began to make substantial progress towards source reductions efforts. For instance, an “average meal” in the 1970s—a Big Mac, fries, and a drink— required 46 grams of packaging; today, it requires only 25 grams, allowing a 46% reduction. In addition, McDonald’s eliminated the need for intermediate containers for cola by having a delivery system that pumps syrup directly from the delivery truck into storage containers, saving two million pounds of packaging

annually. Overall, weight reductions in packaging and products, as well as the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.

McDonald’s Environmental Strategy
McDonald’s has been implementing its strategic idea in promoting environmental awareness. Throughout the years, the company is trying to adapt its’ social responsiveness in our environment that we are living in. Perhaps, the authority is unaware of the company is currently in the process of implementing some Environmental Strategy, because they’re still attached to the principle inherited from the past that McDonald’s as one of the famous fastfood chains of today’s world, lacks in proper waste management. The public or the customers as one of the active participant in implementing this kind of strategy has been very familiar in this kind of strategies, not just in McDonald’s Stores they are seeing this ads but also in other public establishment. Some of the strategies that the company is aware of is the following: Reuse Identifying immediately feasible opportunities for the reuse of materials was a difficult assignment for the task force as the time required to handle, collect, and clean materials would impact McDonald’s ability to provide high-volume fast food. In addition, the committee’s investigation showed that opportunities varied greatly according to behind-the-counter and over-the-counter operations. Over-the-counter options are currently limited as McDonald’s customers expect fast service even at peak times of the day. McDonald’s operations are designed to anticipate the content of customer orders and to prepare food just before the customers arrive. However, McDonald’s does not feel it can anticipate where its customers will chose to eat, and most reuse options require different packaging for dine-in or take-out customers. Repackaging food after the customer arrives or delaying its preparation until the order is taken would lengthen service time. Further, sanitation issues were also a concern of the task force, as single-serve, disposable packaging had basically eliminated the potential of packaging-related contamination. Dishware storage, both in the restaurant and behind-the-counter, and the placement of dishwashing equipment are potentially difficult in McDonald’s already tightly designed kitchens. Consideration was also given to the environmental trade-offs of the dishwashing process, as it would require energy, water, and detergents. Recycling

Recycling efforts take two forms: use of products made from recycled materials, and the recycling of postconsumer/post-industrial waste. Many of the technical aspects of postproduction recycling of both plastic and paper have already been exploited by suppliers' internal reuse operations for scrap. However, little recycling has been done of postconsumer plastic and paper materials due to contamination problems. Unlike glass and metal, where food residue and bacteria contamination can be burned off, foam and paperboard are not easily cleaned. McDonald’s tries to use recycled materials whenever possible. For example, it is one of the largest users of recycled paper in the U.S. However, packaging that has direct contact with food, which constitutes approximately 42 percent of McDonald’s packaging, is strictly regulated by the FDA not to contain post-consumer recycled materials. Therefore, McDonald’s strives to increase the recycled content for nonfood packaging, such as corrugated boxes, which must be made of 35% recycled material according to a 1990 mandate. In addition, it uses recycled paper for nonfood items such as Happy Meal boxes, carry-out drink trays, and paper towels. Composting Composting is still in the formative stage. Therefore, much of the task force’s work centered on gaining a better understanding of McDonald’s composting options. Composting is an attractive disposal alternative as it diverts organic waste from landfills and incinerators and it improves soil quality. Almost 50 percent of McDonald’s waste stream consists of paper packaging and food organics that could be composted. McDonald’s is reviewing the compostability of its packaging and studying materials such as the coatings used on its paperbased packaging to determine if they impair compostability. Where possible, it will replace materials that are not compostable with materials designed for compostability How Organizations Go Green? In today’s world, views on environmental awareness held by different company’s, I learned that each company conducts their own strategic way of promoting their social responsiveness in our environment. McDonald’s Corporation, a premiere fastfood company, ascends its environmental awareness through implementing some strategy that every public could participate. A company like mcDonald’s should meet its social responsibility in order to attain the satisfaction of the public. Environmental Awareness is one factor to be observe for a company to exist. They should be aware of their obligation as one of the

components of our society. Furthermore, I strongly believed that the knowledge that I acquire from this project would expand through the help of the persons behind McDonald’s Corporation. For that, I’ve decided to make some interrogation to some of the members of the Management Team of Mcdonald’s Quirino-Taft in taft Ave. Manila. I asked them several questions regarding the “Environmental Awareness” such as: How does your company help in greening of the management? What other related approaches can you consider in the greening of the management that promote your company’s social obligation, social responsiveness and social responsibility? And here is what they’ve’ said:

“ They send their people to pollution control class, they follow what DENR
requires They ensure that its’ not only the management that is aware with the proper waste management: they also orient each crew they hired in correct procedures….


-Melanie TuazonAssistant Manager

We properly disposed garbage trash, segregating bio-degradable to nonbiodegredable, cleaning the side of the store to maintain the environment out of the dirt. Putting those trash even single tissue paper in the proper garbage trash that may cause floods. Web require healthcard for the new hire crew or crew’s to avoid and for them to be aware in their health and securing of sanitary permit -Angelica PunzalanAssistant Manager

“We properly dispose garbage; segregate bio to non-biodegradable. Healthcard
as one of the crew requirement in hiring, Securing sanitary permit They ensure that its’ not only the management that is aware with the proper waste management: they also orient each crew they hired in correct procedure -Raquel VirayAssistant Manager

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