Introduction

The issue of ethical challenges is a common trend in the modern emerging markets. Ethical challenges have even been fuelled further by the emergence of the lucrative global markets emerging as a result of the increased globalization. The issue of differentiating between knowing what you have the right to do and what is right to do have been a major area of concern in the modern business (Fernando, 2009). Most of the organizations CEOs and top management have been faced with ethical dilemma issues in the pursuit of maximizing stockholders wealth. As a result of the different culture in the modern global economy, the organizations have met resistance in some of the policies they try to implement.

It is worth noting that some of the unethical issues can be detrimental to the overall performance of the organizations. Unethical behaviors in an organization bring about the bad reputation that is likely to lead to increased losses in the long run. Managers and company CEOs must strive to ensure that there is a clear distinction between the ethical behaviors in their organizations and the expectations of the other stakeholders. In this report, we will try to unearth some ethical dilemmas experienced in the modern economy and make recommendations on how best such dilemmas ought to have been dealt with. In this case, we will discuss the ethical dilemmas experienced in the Kentucky Fried Chicken (KFC).

Ethical dilemmas facing Kentucky Fried Chicken

Kentucky Fried Chicken commonly referred to as KFC is a leading global fast food brand. This organization has been serving fast foods internationally within its over 11,000 restaurants globally. KFC was founded in 1952 by its founder Colonel Harland Sanders with an objective of packaging and selling ready to eat food to the global customers. The organization has been successful over the years in terms of sales and profitability.

However, the increased change in lifestyle of the modern population, the organization is currently being faced with some ethical challenges. It is worth noting that the modern society is getting more concerned with their health lifestyles that to a large extent are determined by their nutrition and eating habits. The modern society is currently concerned with their health and figures now than ever before (Fernando, 2009). There has been an intense global campaign against the nutritional content in the fast foods and their repercussions on the human health. These fast foods have been referred to as junk food with no nutrition content, and people should be discouraged to eat it at all levels. In essence, the first ethical challenge faced by KFC is that the organization has a strong brand image that is involved in producing greasy, unhealthy food. It is also the obligation of the organization to increase the shareholders value.

KFC is a global fast food brand with a large number of restaurants that serve millions of people with their products. It is, therefore, essential for the organization to adhere to ethical standards of ensuring that they provide healthy foods. Nevertheless, it has been noted that the organization has been greatly involved in serving food that contain Tran’s fatty acid from their cooking oil (Guffey & Loewy, 2011). Using such kind of oil has been detrimental since it leads to increased level of cholesterol in the bodies of the consumers that can lead to the risk of having heart disease. There has been a lot of lobbying to convince the organization to use healthier cooking products than they are currently using.

To add salt to injury, the unethical behavior of KFC has angered the Chinese government by far. It is worth noting that the large population of the Republic of China has offered a lucrative market for KFC products. The organization has introduced a new product in the market, New Orleans Roasted Wing, which the health ministry in China condemned the use of Sudan Red in cooking their products. The Chinese health ministry advocates for the use of healthy ingredients in their cooking process.

The primary goal of the organization is maximizing the stockholders wealthy through a competitive gain. For KFC to maximize profits, it is important for the organizations management to reduce the operations costs to a large extent. It is, therefore, rational for the firm to use cheap oils that contain Tran’s fatty acids and ingredients that contain Sudan Red (Guffey & Loewy, 2011). The suppliers of these cooking oil and cooking ingredients with the Sudan Red aimed at making exorbitant profits that can be termed as a fraud. It is the obligation of any government to protect the interests of the consumers.

KFC has suffered immensely from the unethical behaviors emanating from the use of cooking oil that contains Tran’s fatty acids and cooking ingredients with the Sudan Red in their new products. There was increased publicity in the media which brought about negative effects to the reputation of the organization (Rego & Cunha, 2012). In some countries, the effects were too difficult to bear and resulted in massive demonstrations in efforts to boycott Kentucky Fried Chicken products.

How KFC deal with the dilemma

In an attempt to deal with the dilemma of providing the healthy food products, the organization has spent substantially in refusing that they use oil with Tran’s fatty acids and cooking ingredients that contain Sudan Red especially in the new product. The company has tried to defend themselves and purport that they adhere to ethical standards that protect the health of their customers. This was aimed at increasing a competitive edge over its competitors such as Subway, McDonald, and Pizza-Hut just to mention a few.

It is worth noting that the organization has the ethical responsibility of ensuring that their products are not health hazards to their consumers. Nevertheless, KFC has failed to put long term plans that will be instrumental in ensuring healthy living standards to the consumers now and in future. It is the obligation of the organization to ensure that the customers are protected from any harm. It is, therefore, imperative for KFC to ensure healthy food products that will protect the consumer interests and the organizations a competitive edge (Fernando, 2009).   In response to this weighty issue, KFC has decided to stop using such oils and the cooking ingredients that contain the Sudan Red. The organization introduced a customer focus approach with the intention of regaining the already lost consumer confidence. It is, however, essential to understanding that long-term solutions must be sought after to deal with the dilemma issue conclusively.

Another important aspect that KFC opted to pursue in dealing with the ethical dilemma issue is to make a public apology through the media. The organization offered a public apology for using the oil that contains the Tran’s fatty acids and cooking ingredients that contain the Sudan Red. KFC also made a declaration to the consumers that it will never again use such cooking ingredients in the production of their foods (Guffey & Loewy, 2011). The management of the organization has also vowed to carry out an intensive investigation into the affair. However, this approach could be detrimental in the overall profitability of the organization. It is, therefore, noteworthy that KFC has made intensive promotional activities to maintain its competitive edge.  For instance, KFC has embraced cost reduction by distributing special discount voucher in public places that can be obtained from the organizations website.

KFC has also understood the significance of corporate social responsibility in regaining the lost public confidence. The unethical issues associated with KFC had detrimental effects on the reputation of the organization. KFC has been actively involved in numerous public activities to correct the mess of the unethical issues.  For instance, KFC has carried out substantial CSR activities especially in the republic of china. It is on record that the organization has been a major contributor to the Chinese hope project annually since 1992 to 1997. It is also worth noting that KFC has sponsored the “One Million People’s Love Movement” and the “1 (family) + 1 (dropout) Help Movement” where it mobilizes community to help dropouts return to school (Rego & Cunha, 2012). In addition, KFC has also been involved in emergency and relief practices where it has made a contribution to the China Charity Federation, Chinese Red Cross Foundation and China foundation for poverty alleviation.

The great contribution by KFC has been instrumental in dealing with the unethical issue since it brought about the social benefit, as well as the benefits to the organization. Corporate social responsibility has brought about increased brand awareness. The activities of this organization have attracted a lot of publicity through the media reports and the internet (Kurtz & Boone, 2009). Many people have understood the best practices carried out by KFC, which will play a significant role in erasing the bad reputation from the unhealthy junk food. The brand reputation of the organization has increased significantly as a result of increased CSR activities.

What could have been done?

The unethical dilemma experienced at KFC is a major with great impact to the organizations reputation. It was, therefore, important for the organization to develop an ethical management strategy to improve the already nitrified image of the company (Garber, 2008).  For example, the company should strive to ensure that the image of the organization is uplifted to acceptable standards. The intensive promotion will be instrumental in pursuing the course of the uplifting the image of KFC (Guffey & Loewy, 2011). The organization should be constantly used the internet, newspapers, and another media platform to explain the benefits of consuming the products. It will be essential for the organization to design a creative advertising design that will be effective in uplifting the brand associated with KFC. The organization must use the design to communicate effectively on the benefits realized from KFC products. Use of brochures, thank you cards, and nutrition magazines can be instrumental in the rejuvenation process.

KFC should also have embraced innovative promotions to increase the sales of this organization. Sales promotion will play a significant role in the uplifting of the company’s image.  KFC must design a special and unique promotion tool that will offer a competitive edge over its competitors such as McDonalds (Rego & Cunha, 2012).  The promotion activities of KFC should ensure that the corporate image of the firm is uplifted and ensure that the public is aware of the improved healthy products.

The health concern in the modern society is a major area of concern. With this in mind, the organization must take necessary effective long term and short term measures to deal with the menace of the unethical behavior. In order to have effective measures to the menace, it is important to understand that the unethical issue in the organization is emanating from the use of the hazardous ingredients in their food products (Frith & Mueller, 2010).  This calls for the organization to design a new approach that will put to rest the health concerns of the consumers.

One of the most recommendable measures that KFC should take to deal with the ethical issues is to create a dietician department within the organization. People in the modern society are concerned with healthy lifestyles that are mostly determined by the nutrition. KFC should have established a strong department that will work with the enhanced nutrition content of their product. Food safety inspection should be at the forefront of this department to ensure that any hazardous aspect in the products is eliminated. It will be essential for KFC to invite food inspector to inspect their food products regularly. This will play a great role in changing the public perception and increase the consumer confidence substantially.

Another important consideration that would serve to clear the mess is by the organization changing their suppliers. It has been noted that the suppliers were careless in supplying oil that contain Tran’s fatty acids and ingredients that contain Red Sudan with an objective of making abnormal profits. In order for KFC to regain the public confidence, it is vital that the public is made aware of the change of choice of its suppliers. This will make the customers believe that earlier mistakes are not likely to happen again. It is also important to introduce new product names to the organization portfolio which will help in the rebranding process.

Conclusion

In conclusion, it is evident that the issue of the ethical dilemma is a topic of discussion in the current economy. All the organizations will strive to deal with this issue since it has detrimental effects on the overall profitability of the organization. It is essential for these organizations to perform a delicate balancing act with the rapidly evolving markets, standards and norms of the organizational culture, business practices and the environment within which the organization operates (Martin, 2007).  Firms are facing intensive pressure from consumers and pressure groups to maintain high ethical standards in the course of doing business. This can be even more intense in the food sector like it has been in the case of KFC.

Business ethics is instrumental to the success of the organization. It plays a significant role in increasing brand awareness that result in increased respect for the customers, as well as the public in general. It is also vital that we understand ethical businesses are also an integral part of the corporate social responsibility that is also a critical tool in realizing competitive edge.  In the case of KFC, it is essential that the organization ensure that all their products are healthy and nutritious (Guffey & Loewy, 2011). Health issues of their customers should be an area of great concern if the organization intends to remain competitive in the dynamic food retailing sector.

References

Fernando, A. (2009). Business ethics an Indian perspective. Chennai: Pearson Education.

Frith, K., & Mueller, B. (2010). Advertising and societies: Global issues (2nd ed.). New York, NY: Peter Lang.

Garber, P. (2008). The ethical dilemma. Amherst, Mass.: HRD Press.

Guffey, M., & Loewy, D. (2011). Business communication: Process and product (7th ed.). Mason, OH: South-Western/Cengage Learning.

Kurtz, D., & Boone, L. (2009). Contemporary business (12th ed.). Mason, OH: South-Western Cengage Learning.

Martin, D. (2007). Rebuilding brand America what we must do to restore our reputation and safeguard the future of American business abroad. New York: AMACOM, American Management Association.

Rego, A., & Cunha, M. (2012). The virtues of leadership: Contemporary challenges for global managers. Oxford: Oxford University Press.

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