I. Introduction Define ethics, ethics in business and the important of ethics in business context II. Background of the business Introduce to McDonald’s III. Case Outline The case of unhealthy ingredients IV. Stakeholder (Direct and indirect) The people affected by the issue directly and indirectly V. Key Ethical Issue Consequences from this issue VI. Ethical Analysis Ethical analysis on alternative reasons behind the occurrence of the issue VII. Recommendation Our comments and suggestions to McDonald’s , the US government and consumers

1. Project Report:
Business Unethical Case Analysis
Case: McDonald’s, “Unhealthy Ingredients”
Instructor: Ms. Sokkea Hoy
Course: Business Ethic – BUS 330
Members: Sovanna Suos < ssuos@zamanu.edu.kh>
Vannapha Huy <vhuy@zamanu.edu.kh>
Techly Seng <tseng@zamanu.edu.kh>
Ty Chea <tchea@zamanu.edu.kh>

2. Report Content:
I. Introduction
Define ethics, ethics in business and the
important of ethics in business context
II. Background of the business
Introduce to McDonald’s
III. Case Outline
The case of unhealthy ingredients
IV. Stakeholder (Direct and
indirect)
The people affected by the issue directly and
indirectly
V. Key Ethical Issue
Consequences from this issue
VI. Ethical Analysis
Ethical analysis on alternative reasons behind
the occurrence of the issue
VII. Recommendation
Our comments and suggestions to McDonald’s
, the US government and consumers

3. I. Introduction:
Ethics is generally known as a system of moral principle that affects how people make decisions.
Ethics is also concerned what is good for individuals and society, like as, how people live a good
life, what are people’s rights and responsibilities, who define the language of right and wrong, and
what is thought to be good or bad. Ethics in business refers to an application of a moral principle
of conduct to the strategic and operational management of a business. For the today business,
ethics is prioritized as one among the main factor during the decision-making process. Businesses
that can maintain a high ethical point usually can benefit from its own acts and creates satisfaction
to both internal and external stakeholders. Ethical viewpoints continue to change over time as
people interact with different society contexts such as people, time and rules. For business, ethics
is important for sustain growth because it maintains profits in the long-term.
II. Background of the business:
Originally, this restaurant served only hot dogs, hamburgers, cheeseburgers, milkshakes, and the
pre-1960s type of French fries. Today's menu includes numerous other items that have been added
through the years such as chicken, fish, salads, snack, coffee and desserts. Now this restaurant is
the world's leading global foodservice retailer with over 36,000 locations serving approximately
69 million customers in over 100 countries each day. More than 80% of restaurants worldwide
are owned and operated by independent local business men and women. The true vision of this
company is to offer best experience to the customer, this company is focusing on creating a better
tasting, high-quality food to their customer and providing the world-class experience that makes
the customer feel warmly welcome and comfortable. This company is McDonald’s.

4. III. Case Outline:
The corporation food is unhealthy for consumers. They use many harmful ingredients and
chemical such as acrylamide, azodicarbonamide, sodium acid pyrophosphate and
dimethylpolysiloxane which are banned by many nations. They also use genetics modified
ingredients which are hard to trace (Gibison). For instances, in Japan, McDonald’s apple pies were
found contain food coloring agent which is banned in Japan. There are also controversy issues
happened to motherland of McDonald in the United States, a woman went McDonald’s with her
child found out that there was a rat in her salad.
IV. Stakeholders (Direct and indirect)
Stakeholders are the people who got directly and indirectly effected by the outcome of a
decision.
1. McDonald’s Company
2. Consumers
3. Consumer’s family
4. Communities
5. U.S Government
6. Competitors
7. Companies in the same industry
8. Other companies (companies which McDonald’s consumers work for)

5. V. Key ethical issues
The unethical case is concerned with unethical ingredients. McDonald’s foods contain too many
calories and not enough nutrition such as large amounts of added sugar, unhealthy fats and is highly
processed; which directly effects on consumers’ overall health. When these foods become the diet
for people the possibility consequence includes poor health, overweight and obesity. The issues
do not stop here; being overweight can lead to heart disease, diabetes, and stroke. He will have to
quit work. His family will have less income and saving. However, their spending is higher. They
will have to make time to look after him and spend money to provide him a good treatment. His
children may also have to enter labor force early to support the family. Thus, he becomes a burden.
When more and more consumers have heart disease, stroke or diabetes, indirectly, the companies
in same the industry are losing their customers because more people might start to feel insure
toward fast foods consumption and thus switch from fast foods. As a result, the industry will
become less dynamic, and companies within the industry will make less profit so they may start to
consider eliminating their staff’s numbers. This will increase the unemployment rate for the nation.
Additionally, when the individual citizens cannot work, the communities, companies and US
society as a whole also get hit. Let imagine, if a citizen gets diabetes and can no longer work. Then,
his company is losing good employees. Thereby, for the communities and the US society, the
nation’s GDP, Income, welfare, happiness and healthiness rate will be all lowering. As identified
by the Centers for Disease Control and Prevention, the expense on obesity-related medical costs
was $147 billion and $69 billion was responsible for losing productivity caused from this disease,
in the year 2008.

6. VI. Ethical analysis
To decide if the actions were moral, we need to think about the purposes of McDonald’s. If the
purpose is to make more money by making people well-being at risk for profit, it is immoral. If
the corporation’s purpose is to make food affordable for everyone by selling cheap food, then the
company may not be immoral. That would be more about having a bad solution decision than
greedy purpose towards the customers. In an official way, we do not know the real purpose of the
corporation, we think it would be hard to make a conclusion in either way. Subjecting to this, the
moral concern would also be changed.
In addition, people perceive situations differently and thus, there are many discussions about the
definition of ethic and ethical issues. All practitioners do not have one common definition of the
topic. Thereby, It would be useful to base our analysis on the well recognize ethical framework.
According to Business Ethics Book by Laura, Joseph and Chris, there are three models that can be
used to explain if the acts involve in morality: deontology, utilitarianism and virtue ethics.
Utilitarian people make decisions that produce better consequences than alternatives. Examples of
better consequences that promotes human well-being: the happiness, health, dignity and more. A
decision that supports greatest good for a maximum number of people is the best decision. The
utilitarian perspective would find this unethical whether McDonald’s had the good purpose or not.
This is due to the negative consequence, the public health issues. The corporation does not provide
safety food to customers, society and increase public health issues. It is immoral for any business
to serve a product or service that may cause harm. Their food is at the expense of the society’s

7. health and welfare. The corporation is clearly at fault for the responsibility of producing and
maintaining a safe product to their customers.
However, the deontological perspective might not agree. Deontology begins with the insight that
as a matter of principle, we should make some ethical decisions rather than consequences even if
it results in some bad consequences. If the means was really to help customers can afford by selling
the cheap food, then the act of serving the food would be moral. If the means was to serve no
quality food to make people ill, than it would be unethical.
On the other hand, virtue ethics depends more on integrity and character of a person who is making
the decision. It shifts the focus from questions who the person is about, not what a person should
do to. It gives us a different view of ethics. The managements and the marketing and sale
department create a new advertisement to capture children as a new segment. Of course, employees
are responsible for maximizing profit for their company, yet, according to virtue ethics, they are
not moral of doing so. They did not act of what should have to be done, integrity, to protect children
from being fooled by cool lies and a risk of getting overweight.
VII. Recommendations
The following recommendations are offered for McDonald’s Company:
 Give that the cooperation operating in food industry, food safety should be integrated
into the company credo, value statement and code of conduct. It never be ethical
enough to make profits at the expense of consumers’ health.
 While the current products causes health issues, the cooperation should reevaluate their
ingredients’ quality. Further, they should take actions to contribute in solving this

8. problem by practicing CSRsocial web model. Introducing more healthy safe foods and
calories count in menus and sponsoring medical researches related to heart disease,
stroke and diabetes would be highly recommended.
Recommendations for governments:
 The government should encourage and enforce on a legislation and quality
control of ingredients used in food products.
 Limit advertisements that target children under 12 years old
Recommendations for consumers:
 Consumers should be health conscious, manage their diets by balancing healthy
food and do more exercises, for example, buying fresh vegetable and meat from
the fresh-markets and self-cooking at home.
-END-

9. References:
Ann, P., & Elea, C. (n.d.). 13 Effects of Fast Food on the Body. Retrieved December 11, 2015,
from http://www.healthline.com/health/fast-food-effects-on-body
"McDonald's COMPANY PROFILE: AboutMcDonalds.com. Web. Nov 23, 2015, from
http://www.aboutmcdonalds.com/mcd/investors/company_profile.html
"You're in!" Food. Web. 23 Nov. 2015. <http://www.mcdonalds.com/us/en/food.html>
Gibison, A. (n.d.). McDonald’s: A Good Image with Bad Ethics. 8.
Natural News Editor. (2015, july 28). Top 10 toxic ingredients used by McDonald's. Retrieved
from Natural News Editor:
http://www.naturalnews.com/050567_McDonalds_toxic_ingredients_fast_food.html
Nayab, N. (2014, 08 10). Real-World Examples of Bad Business Ethics. Retrieved from brighthub:
http://www.brighthub.com/office/entrepreneurs/articles/115557.aspx
Newcomb, T. (2012, september 04). McDonald’s Goes Vegetarian in India. Retrieved from
Newfeed.time: http://newsfeed.time.com/2012/09/04/mcdonalds-goes-vegetarian-in-india/
Rucki, A. (2013, 02 17). McDonald's "Deceptive" Marketing to Children (2010). Retrieved from
Business ethics cases: http://businessethicscases.blogspot.com/2013/02/mcdonalds-targeting-
children-through.html