HL paper 2, section C, sample D

HL 8. With reference to one organization you have studied, compare and contrast the importance
of innovation and ethics for Research and Development (R&D).

Rapid technological changes and advancements have led to businesses being more innovative and
implementing different strategies in order to enter new markets, satisfy customer needs and largely, to
remain competitive in their various industries. On the other hand, ethics is a broader and important
aspect to consider in every strategy that the firm would want to implement. Innovation refers to the
development of new products, processes and services by firms, so as to meet the demands of
consumers. Ethics refers to the practices that are acceptable and have no harm to different societies
around the world. This essay is going to explore the importance of innovation and ethics for research
and development at McDonald's.

Starting up with only a single fast food restaurant approximately four decades ago, McDonald's has
emerged to be the largest fast food restaurant in the world with more than thirty thousand outlets in one
hundred and nineteen countries. The use of their symbol, M, all over the world has made them a very
reputable firm with a very good brand image. Their innovation strategies to enter different markets in all
parts of the world, meeting different cultures' tastes and preferences, has made them remain competitive
in the fast food industry. However, their ethical standards have been prone to criticisms.

One of the firm's latest innovations was being mainly targeted for the Asian consumers, Indians in
particular, whose majority of the population are Hindus and some being vegetarians. This is when they
introduced restaurants which serve menus specifically for vegetarians. This, therefore, shows the
importance of innovation for research and development as the firm saw that the majority of the Indian
population were vegetarians and also Hindus, who do not consume beef. Therefore, the introduction of
meals like the McVeggie which are specifically for that group of consumers. Again, ethics played a major
role in bringing up this innovation because the firm had to produce products that had to fit in with the
culture of the Indian population and therefore, a variety of beef burgers and, probably the McVeggie,
would bring up a variety in the firm's menus thereby enhancing its reputation.

Moreover, the firm's introduction of the Happy Meal was another innovation that helped the firm in
maintaining its reputation. With this development, children were able to buy the Happy Meal which had a
free toy in it. This led to children having much more interest in buying the Happy Meal as they were
enticed by the toys. However, this exercise was considered as unethical which turned out to be a clear
example of pester power. This was because kids were enticed to purchase the Happy Meal, not
necessarily that they wanted the meal, but they would want a free toy. Therefore, generalizing this we
see that ethics would still be a vital part to consider when firms are carrying out their research and
development. This is mainly because if a firm producers or introduces a good or service that turns out to
be unethical to consumers, then the products will be prone to failure and very often the firm will face
legal allegations which will consequently lead them to losing large amounts of money.

McDonald's also has a very good reputation of offering great services and also healthy and favourable
conditions in their restaurants. Again, the firm's innovations of the Drive-thru menus were able to
maintain and increase their customer base as well. This is where consumers buy the fast foods and they
are able to eat on their way. This innovation was important to the firm as some of the outlets operate on
a twenty-four hour basis and everyone can have access to or purchase food from the outlets at any time
of the day. Research and development will always look at the needs of the customers as it is the first
stage in the product life cycle and innovation will lead to the development of new products or services.
The introduction of the Drive-thru menus meant that the firm has to extend its services to meet their
customers' needs and also to cater for every client and other potential clients at any time of the day.

Despite the firm's success, great innovations and its good image, McDonald's has been alleged of
unethical behavior. These unethical behaviors are tied to their innovations in particular. For instance, the
use of pester power that the consumers had problems with.

Moreover, the firm's products, for instance burgers, have been alleged of having high cholesterol content
that leads to diseases such as heart diseases, obesity and possibly mad cow diseases. This tarnishes
the image of the business globally since they mostly use letters which have become prefixes to their
products, which are Mc.....

However, the firm has still managed to engage in some ethical behavior such as donating part of its
profits to the Ronald McDonald home which caters for children with different diseases.

Business management teacher support material 1

 HL paper 2, section C, sample D

Innovation and ethics remain the great tools and also great parts to consider during the Research and
Development phase of the product life cycle. If ethical standards are ignored by firms during this stage,
the products will be prone to failure and will be prone to failure and will cost the business heavily.
Innovation will lead to new ideas being developed into products from knowledge gained during different
researches done with great ethical consideration in different parts of the world, hence the great
importance of innovation and ethics in Research and Development.

Business management teacher support material 2