Asian Institute

KFC’s Ugly Truth of Technology,

School of
Management

Submitted by
Kushal Sundar Shrestha ID:
110570
Aditya Agrawal ID: 110614
Niyonta Islam ID: 109464
Susan Jacob ID: 110573

Submitted to: Dr. Nicholas Dimmit

Course: SM60.03: Corporate Social responsibility

Email: nick@ait.ac.th
Table of Content Page

1. Introduction 3

2. Background of the Ethical Issue 3

3. PETA Perspective 3

4. GREENPEACE Perspective 6

5. Issues Concerned with the case 6

6. Defending the case from KFC’s Perspective 8

7. Recommendation and Justification 9

8. Conclusion 10

9. References 11

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Introduction

Kentucky Fried Chicken (KFC) Corporation, based in Louisville,

Kentucky, is the world's most widespread chicken restaurant
chain offering services to more than 12 million customers in 109
countries all around the world. KFC operates more than 5,200
restaurants in the United States and more than 15,000 units
around the world.

KFC was founded by Harland Sanders (Sanders) in the

early
1930s. He started cooking and serving food for hungry
travelers
who stopped by his service station in Corbin,
Kentucky, US. He
did not own a restaurant then, but served people on
his own dining
table in the living quarters of his service station.
His business
expanded and by 1964, Sanders franchised more than
600 chicken
outlets in the US and Canada. Now customers around
the globe
enjoy more than 300 other products from Kentucky
Grilled
Chicken in the United States to a salmon sandwich in
Japan.

KFC has been a brand and operating segment, of Yum Brands since 1997 when that
company
was acquired from PepsiCo as Tricon Global Restaurants Inc

Background of the Ethical Issue

Recently KFC faced accusation from non government organizations like PETA and
Greenpeace
regarding unethical practices from KFC’s supply chain such as Pilgrim’s Pride and
Cargill.KFC
was accused of ill-treatment towards its chicken by PETA and Greenpeace blamed KFC
for its
role in the destruction of the Amazon rainforest. This case study discusses these
ethical issues in
detail and concludes with suggestions and recommendations from the case study team,
on how
similar issues could be avoided or tackled.

PETA Perspective

Every year more than 1 billion chickens are killed from the chicken farms, meant
for KFC. The
improper breeding of birds combined with improper working conditions of workers and
lack of
ethically efficient operation processes led to improper practices in KFC’s
supplier’s poultry
farms. As a result KFC was accused of animal abuse by PETA, on the supplier’s farm.
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The People for Treatment of Animals (PETA), an animal right protection
organisation, accused
KFC for its unethical treatment (behaviour) towards the chicken in
KFC’s supplier factory farms. Pilgrim’s Pride (PP) is one of KFC’s
award-winning supply operations and the second largest processor of
chickens in the United States. PETA’s investigations in Pilgrim’s
Pride poultry farm brought to light the inappropriate practices that
prevailed in KFC’s supplier operations. PETA released a shocking video that clearly
depicted the
ill-treatment of chickens and the unhygienic behaviour in the Pilgrim’s Pride
poultry farm.
Experts commented the video to have depicted the worst cruelty towards chicken and
the worst
employee behavior. The release of the video led to widespread protest against KFC
around the
world.

In India, on August 20, 2003, a five-foot tall chicken

complete with an ensemble of feathers and beak hobbled
on a pair of crutches outside Kentucky Fried Chicken's
(KFC) was kept in an Indian outlet in Bangalore. The
chicken was brought by PETA activists, who carried
play cards reading, "Quit India" and "Stop Playing
Fowl". The chicken was placed at the center and a
peaceful protest was held against the alleged ill treatment
of birds in KFC's poultry farms. Media persons were
called to give the demonstration a wide coverage.

As a result of widespread protest, in Canada PETA’s new animal welfare plan was
implemented
in KFC’s supplier’s plants. According to the new plan, 100 percent of chicken
purchases were to
be done from suppliers that use controlled-atmosphere killing (CAK). PETA’s protest
is against
the cruelty and ill-treatment towards KFC chicken. They do not intend to overhaul
KFC’s overall
manufacturing process. Instead PETA urges KFC to adopt animal welfare program
developed by
the five members of its own (KFC) Animal Welfare Board and to adopt Controlled
Atmosphere
Killing (CAK).

As per PETA, The Pilgrim’s Pride poultry farm did not adhere to any animal welfare
standards.
The chickens suffered intensely in the poultry farms before being slaughtered as
highlighted
below.

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1. Overcrowded farm environment

The chickens are stuffed by tens of thousands into overcrowded

sheds where they hardly find space to move freely. To save
space and avoid chicken hurting each other, the sensitive chicken
beaks are cut off with hot blade without giving any painkillers.
Overcrowding and poor litter quality in the farms also caused
painful ammonia burns on the chickens. The injured chickens
received no treatment and had to bear the pain throughout their
life.

2. Improper breeding

Birds are fed genetically modified feed in order to accelerate their growth rate.
As a result they
suffer from ailments such as extreme obesity and fatty livers and kidneys, heart
attacks and other
problems.

3. Cruelty in the slaughter house

The chickens are slaughtered before they are 6 weeks old.

At the slaughter house, chickens are hung upside down and
transferred through conveyor belts to the killing room fully
conscious. Too many chickens are dumped from the crates
to the fast moving conveyor belt that caused the birds at the
bottom to get suffocated. Unable to manage the large inflow
of chickens, the workers threw away some chickens
slamming them to the walls or floors. During the
processing, to remove feathers, the live chickens are thrown
into scalding-hot water.

4. Frustrated Workers
Due to poor wages and working conditions, employees used the chickens as a means to
vent
frustrations and alleviate boredom. They twisted the bird’s heads off, spat tobacco
into their eyes
and mouths, spray-painted their faces, used them as footballs and squeezed their
bodies so hard
that the birds expelled faeces.

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GREENPEACE Perspective

Another unethical issue raised against KFC is its link with the destruction of the
Amazon
Rainforest. In May, 2006 Greenpeace
volunteers came
up to enlighten the whole world about the
mass
deforestation in Amazon rainforest caused by
KFC.
Greenpeace has come up with a term for KFC
as “KFC
– Amazon Criminal”.

According to Greenpeace, KFC is

fuelling the
destruction of Amazon by selling cheap
chicken fen on
soya grown on deforested land.
Greenpeace
investigation clearly traced that large
area of rainforest
has been destroyed by direct sales of cheap soya via Cargill by KFC , in order to
sell billions of
chickens to its customer every year, at low cost. The demand of soya fed for its
chicken by KFC
to Cargill has led to this unethical activity, which is affecting the global
climate. Rainforest that
covered 14% of earth’s land area has reduced to 6% due to deforestation, which
clearly shows
the high overall impact of business practices.

Greenpeace wants KFC and Cargill to ensure that animal feed they buy does not
contribute to
destruction of Amazon and that none of their soya products are genetically
engineered.

Issues concerned with the case

This case can be solely related with both market stakeholders and non stakeholders
of KFC’s
environment.

a) Stockholders

KFC is one of the brands among the Yum brands, which have been operating in various
corners
of the world. The activities practiced by the KFC and its suppliers have larger
impact on the
stockholders. The protest initiated by various organizations has affect on
operations and if the
company fails to solve the current issues, the company would may be solely
responsible for
missing out to take advantage of opportunities that lies, ahead in future. The
stockholders have
invested in the company and if the company closes down, their investment would be
at risk.

b) Customers
Consumers continue to return to KFC because of the quality and good prices of their
food
products. KFC has many fans and continues to grow to provide better customer
service. From
research we learned that KFC’s suppliers have been breeding unhygienic, drugged
birds that

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could possibly have negative impact on the customer’s health. KFC should
investigate the
supplier’s breeding and poultry process so that proper quality of their chicken are
maintained.

c) Suppliers

KFC has numerous suppliers among which, Perdue Farms, Tyson Food and Pilgrims’
Pride
supplies the major chicken to KFC, and those chickens are further processed to be
served into
their chain of restaurant all over the world. Proper steps and methods should be
applied to
evaluate the suppliers and their products as suppliers largely affect the overall
operation and
business of KFC. Suppliers should focus on their improvement as when KFC is
affected; they are
also likely to be affected, as KFC is the supplier’s main buyer of their chickens
in huge mass.

d) Media

Mass media is also highly affected, as most of the protest made all around the
world initiated by
non government organizations, were made from the channels of the media. Media made
people,
organization and business firms, to be more aware about their activity, and draw
the line between
the right and wrong. Through information gained from media, people have changed
their
decision and demonstrated their activities against the KFC.

e) Non Government Organization (NGO)

NGO such as PETA and Greenpeace are highly influenced by the supplier poor
management for
birds handling by the workers. PETA has been involved into protest to make people
aware about
the activities of KFC suppliers, mainly Pilgrim’s Pride, and they have also
mentioned some
corrective course of action that can improve the life of birds. Likewise Green
Peace organization,
made the whole world aware about the Cargill, one of the supplier of KFC for soya
fed for
chicken, who was highly responsible for Amazon rainforest deforestation.

f) Rules and Process

Due to poor implementation and execution of rules and process of chicken handling,
transporting
and slaughtering has lead to this scenario. PETA has explained in their article
that KFC should
bound their supplier to work on animal welfare program, to ensure that birds are
taken care
properly because, these birds are sent to restaurant all over the world. What
supplier breeds, are
consumed by the final consumer, so organization should be aware about the rules and
process to
handle birds. Greenpeace is highly concerned with the destruction of Amazon
rainforest, they
claim to KFC to not seek cheap soya that are feed to birds back in their supplier’s
farm. KFC
should be sound and responsible for the affect on the environment and should take
corrective
action to minimize the impact on the world’s environment.

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Defending the case from KFC’s Perspective

With response to various protest made by various organization, KFC counter claims
the claims
made by PETA and state that those claims are false, misleading or inaccurate. From
KFC’s
perspective the truth behind the wall are like these. The claims are not valid and
their
explanations are written as below:

KFC is well committed to serve its customer with famous fried chicken that is being
well treated
in their factory farm. KFC is highly aware of their responsibilities through Animal
Welfare
guidelines and they claim to be assured that these guidelines are practiced, in
every supplier’s
farm. KFC adds “We buy chickens from the same trusted brands that consumer buy from
the
local supermarkets and that other restaurants purchase from”. KFC explains that
they do not
operate any factory farm; rather they get their raw materials i.e. chickens from
suppliers that
fully follow the guidelines of Animal Welfare Program developed by five members of
KFC.
They also guarantee that those workers who express disrespect against chickens and
violate the
guidelines are bound to undergo certain action taken by the suppliers.

In order to ensure proper quality from suppliers, KFC has placed full time
inspector in their
supplier’s plant. Pilgrim’s Pride (PP) has fired 11 employees, who were highly
involved going
against the guidelines of Animal Welfare program. With objective to demotivate such
activities,
PP has placed cameras in farm factory, PP also provides special training to its
manager to follow
and promote sound animal welfare and handling. KFC also claims that it has taken
leadership
position in the specialized area of poultry welfare. “KFC’s animal welfare advisory
council
consists of highly regarded experts in the field, including some of the nation’s
most respected
authorities in the areas of Animal and Poultry science, Veterinary Medicine,
Poultry Physiology
and Poultry Science”. KFC has certain regulation that checks how chickens are breed
in
supplier’s farm. KFC has made its suppliers to have special design poultry housing
that is
engineered with birds comfort and health in mind. The cleanliness of these
facilities and the
health of the birds are top priorities of suppliers.

KFC explains that their suppliers don’t use growth hormones drugs on poultry. Their
suppliers
work with primary breeders who provide poultry specifically selected with health
and well being
in mind. KFC supplier ensures proper care of chickens that are meant for
consumption. Extreme
care is taken to ensure the health and safety of birds during handling and
transportation process.
KFC claims that “Any injury to a bird lessens its value to the supplier, as
crippled, and lame
birds as loss to farmers.” With response to high protest of PETA and other animal
rights group,
to adopt Controlled Atmosphere Stunning (CAS), KFC claims that they have practiced
CAS, and
they do fund research for electrical stunning and other alternative methods of
slaughter.
KFC has taken industry leadership position in areas of Animal welfare and meets
regularly with
its Animal Welfare Advisory Council. KFC closely work with this council to ensure
welfare of
these animals raised for food.

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Recommendations with Justification

KFC suppliers should focus more on preventing animal abuse rather than punishing
their
employees. As per our basic understanding following recommendations can help in
preventing
animal abuse.

1. KFC should make sure that all its suppliers follow the good practices
recommended by
PETA regarding Controlled Atmosphere Killing (CAK) and installation of video-
surveillance
cameras.

Justification: CAK will help the chickens to have a painless death. Videos in
the plants will
force the employees to behave properly in the plant.Hence these measures will
take care of
the cruelty and pain given to towards chicken. Moreover PETA will also
understand that
KFC does care about the chickens and they are trying to do their best to make
the company
function in a socially responsible manner.

2. KFC should focus on reducing employee frustrations; by providing them with fair
salaries
and good working condition in the factory farm and slaughter houses.

Justification: If the employees who handle the chicken at KFC are happy,
satisfied with
their working conditions and pay, the chance of mistreating chicken would go
down. Right
now, the employees who handle the chicken are not satisfied with the working
condition or
pay; hence they treat the chickens badly.

3. KFC should highly focus on designing federal animal welfare laws and procedure
to handle
and slaughter chicken. Even though the Humane Methods of Livestock Slaughter Act
in the
United States is designed to protect livestock like cattle, horses mules etc
during slaughter, it
does not include chickens.

Justification: Laws and legislations can guide organizations to function

according to the
requirements of the law. Violation of these laws could lead to severe
consequences. Hence
animal welfare laws for chicken will surely provide better chances of being
treated properly.

4. KFC should also focus more on adopting and implementing “Animal Care Standards”
to
provide better standard of living for the chickens e.g.: to minimize the amount
of ammonia in
the atmosphere of factory farms, to improve the living spaces and lighting in
chicken shed
along with prohibition of intentional starving of breeding.
5. Feeding chicken with drugs to speed up growth and increase weight should be
stopped.
Instead breeding should focus on normal healthy growth of chickens

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 Justification: The overall working system, process practiced by KFC is
absorbed by the
KFC’s customer; because customer are the ones consuming improper chickens
breed. Drugs
and hormones fed to the chickens will adversely affect the consumers’ health
as they will be
more prone to abnormal and premature growth and other diseases.

6. External auditors should be appointed to conduct surprise inspection of the

plant operation,
and implementation of welfare standards will help minimize the human behaviour
against
poor birds, and improve the quality of foods that are being served at the
restaurants.

Justification: At present KFC claims to have animal welfare programs though

there is no
proof for its claim. The video released by PETA proves the opposite. An
external auditor
who will make surprise visits to these plants can reveal the truth. Moreover
the plant
managers and workers will be more conscious of their behavior due to surprise
inspections.
This will also help to improve the chicken quality processed from these farms.

Conclusion

According to PETA and Greenpeace companies like KFC, which serves a major
population
through their fast food services should make sure that all its stakeholders behave
in a socially
responsible way in all its business aspects. KFC failed to keep track of its major
supplier’s
standards on animal welfare and environmental related issues, in spite of its claim
of having
proper welfare guidelines. KFC should take strict measures against the unethical
practices
towards the chicken in its supply chain along with mass destruction of Amazon
rainforest and
should adopt measures to avoid such practices in order to give a painless life to
the chickens that
turn into “Kentucky Fried Chicken”.

PETA as an organization has protested against various organizations such as

McDonald and any
other fast food companies. KFC claims PETA as a radical extremist group, whose sole
agenda is
to promote vegetarian lifestyle. Despite of PETA’s effort KFC explains that, as a
company KFC
is proud to serve the world’s most famous fried chicken and support the customer
who loves to
eat meat.

From the research, we learned that both KFC and NGO’s like PETA and Greenpeace has
their
own point of view about these situation. As students of Corporate Social
Responsibility, we
believe that if KFC’s suppliers follow these recommendations, it should not have
any face
similar problems in the future.

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References
http://www.kfc.com/about/

http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/KFC%20-%20India
%20-%20Ethical.htm

http://www.greenpeace.org/international/press/releases/kfc-exposed-for-trashing-
the-a

https://secure.peta.org/site/Advocacy?cmd=display&page=UserAction&id=1765

http://www.kentuckyfriedcruelty.com/pdfs/pp_novakkfcletter.pdf

http://www.kentuckyfriedcruelty.com/pdfs/pp_eyewitness.pdf

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