Question 1: Do you think the criticisms Tasty meals Ltd experiences regarding unfair treatment of its employees is justified? Why or why not?
Tasty Meals Limited, Philippines
Answer: Tasty meals are known to be the global giant in the food chain industry with over fifty thousand restaurants in more than hundred countries under its umbrella; handling more than seventy million customers on a daily basis. In Philippines only, Tasty means operates more than twenty seven hundred restaurants responsible for employing twenty five thousand workers directly and indirectly. With such enormous operations around the world in general and Philippines in particular, the restaurant chain has been facing a lot of troubles in many areas causing severe negative word of mouth which has been spreading in the media deteriorating corporate image of the organization. Out of all, the problem of exploiting workers and giving inappropriate compensation is one of the most highlighted issues against the organization. In this connection, the local media have been actively participating bringing negative connotations upfront calling for an urgent need to alleviate such poor wage structures. In this regard, it was also accused that the organization gives hectic job descriptions to its employees with long working hours proving lowest compensation rates and that wages are even far lower than the average hourly rates present in the country. Media’s trial was not limited to lowest wage rates but also highlighted worst working conditions in which employees are forced to work. A profound comparison with the restaurants operational under organization’s name in other countries was also done and it was revealed that situation in Philippines is not up to the mark.
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In such situations, surveys done by National Workers Union in the country determining the salary levels prevailing in the country also came up with shocking results. The report revealed that hourly compensation paid to employees at Tasty Meals (Ltd.) in Philippines was among the lowest in the country. As a matter of fact, Tasty Meals gave around $ 3 compensation rate to its employees; where with a slight increase done in the last quarter of the year, it was raised to $ 3.6. Yet, the situation remains upsetting where such an increase was still amongst the lowest jobs in the country. If compared to today’s minimum wage rate that has been enforced by the Philippines government for Hotel and Restaurant industry, it comes out to be 200 PHP (equivalent to $ 4.61) that should be given (National Wage and Productivity Commission, 2011).
Meeting the demands and compensating the internal stakeholders in the shape of employees and workforce particularly is one of the most important responsibilities which has to be performed by organizations in pursuit of corporate governance. This is also important from an ethical standpoint to maintain the going concern of the organization. Thus, it gets clear that Tasty Meals Limited should be solely criticized for providing such low wage rates for its employees also not providing them with proper work conditions. Also, National Wage and Productivity Commission should also be equally criticized by not enforcing their laws properly. Therefore, criticisms Tasty meals Ltd experiences regarding unfair treatment of its employees are totally justified in the given scenarios.
Question 2: Should Tasty meals Ltd be held responsible for the problems caused by unhealthy junk foods and high-calorie? Why or why not? (Hint; in a free market, customers have plenty of alternatives to Tasty meals Ltd to choose from)
Answer: Apart from employees and wage issue, the next problem highlighted by the media in collaboration to many of the healthy food association of Philippines was the accusation of providing unhealthy food to the people. It was pointed by the media that Tasty Meals Ltd. Has been serving unhygienic meals to its customers with high calorie ratio which are cooked in greasy, oily, fattening and low quality oil which makes the food junk and becomes a cause of much health problems and obesity if eaten consistently. In this connection, the most important question that appears with the scenarios is whether Tasty Meals Limited should be held responsible for such accusation or the customers who are consuming the food. According to modern day business, corporate ethics and Corporate Social Responsibility has been the most important factor which is to be carefully utilized by multinational business set ups like Tasty Meals Limited to shape up their corporate image in a favorable way. Corporate Social Responsibility is defined as doing such things for the betterment of business stakeholders including customers, employees, investors, etc beyond what is expected by the law (Needle 2010, p.301). Also, the restaurants are catered to be in services industry where the food is cooked back stage for which customers are not aware of. Therefore, if the oil used for cooking food is unhealthy, it is a responsibility of Tasty Food Limited that it should provide food using quality and healthy ingredients in their food items. On the other hand, doing so will also allow the company to fulfill its corporate social responsibility in favor of their customers by providing the best value for the price they are paying against the food.
On the other side of the coin, customers are also free to choose any restaurant and food they wish to for maintaining health. It is true, but the equation is unbalanced on Tasty Meals Limited’s part since they have not declared themselves of using unhealthy and greasy oil and they are also charging prices for good food. According to legislation in many countries like Public Interest Disclosure Act 1998 in the United Kingdom enforces to disclose everything to customers and the public which can have an impact on their lives, health and wealth. People might get sick and lose their health trusting the organization and its worldwide chain as a guarantee for quality and hygienic food. This is a breach in moral, ethical and law policies developed by the government of Philippines. The restaurant chain appears to be lacking in providing adequate information to customers and therefore, in this regard, Tasty Means Limited should be held responsible for the problems caused by unhealthy junk foods and high-calories.
Question 3: Is it reasonable to demand from Tasty meals Ltd to give up a ‘cost effective’ and ‘convenient’ use of disposable tableware and containers because it is considered to be unfriendly to the environment? Why or why not?
Answer: With the presence of problems like low wage rates, improper working environment and using oily and unhygienic oil in the food, another accusation pointed on Tasty Meals Limited is from the ecological, environment safety and green peace activists in the form of being non-friendly to the environment. The reason given in this regard was the usage of wrapping papers, plastic straws and poly foam containers in bulk quantities which cannot be disposed or recycled after usage. As a matter of fact, using such things can be disastrous for customers and eventually for human health as such non-biodegradable products are hazardous for human existence. It is explained in the case that such wrapping foils, plastic straws, poly foam containers and relevant cutlery are much cost effective and convenient for the restaurant as well for customers to use. But, environmental problems are to be given more weight than cutting costs and short term convenience. Corporate Social Responsibility also entails the fact that business transactions will not harm the environment in any means but infact ensure such measures which will enhance the environment and ecology.
In this connection, it is perfectly reasonable to demand Tasty Meals Limited to stop using such table ware and containers on the grounds of being unfriendly to the environment. This is also because there are numerous of other possibilities available in the market which are successfully utilized by many of the restaurant chains on local as well as global level. There is much Research and Development been conducted to produce safe, healthy and environmental healthy tableware used on a daily basis by many of restaurants in Philippines. Also, there are many recycling companies active in the country providing recycling solutions to restaurants, offices and manufacturing units. Therefore, on an immediate basis, Tasty Meals Limited has to stop procuring such environment unfriendly disposable tableware and either shift to non-disposable and reusable cutlery. Also, using reusable cutlery and tableware saves time, space, are environment friendly and money in the long run and provides with greater flexibility in terms of usage (Manuel et al 2007, p. 305)
Therefore, it is totally reasonable to demand from tasty Meals Limited to give up a cost effective and convenient use of disposable tableware and containers on the grounds of being unfriendly to the environment. Such tableware provides cost effectiveness in the short term if viewed from restaurants perspective but in the long run swells the cost structure. So, doing so will not only benefit Tasty Meals Limited to save a lot of time and capital in procuring such tableware but also help to fulfill their corporate social responsibility by an environment friendly restaurant in Philippines. As a matter of fact, such environment hazardous materials and cutlery should be subject to a ban to be manufactured, supplied or imported into Philippines so that ecology should be preserved in an optimum way.
Question 4: Is it reasonable to demand from Tasty meals Ltd to impose its code of conduct directives to the suppliers it works with if they are involved in illegal or unethical practices? Do you agree? Why (not)?
Answer: Facing crucial time to maintain the organization’s going concern, Tasty Meal Limited were getting more vulnerable by the accusation made by the media for having connections to suppliers which are involved in illegal and unethical practices. The restaurant chain was said to be procuring giveaways and toys with its meals from the supplier which were pronounced to be ‘unethical suppliers’ which were known to be breaching rule of laws in the case of child labor and exploiting workers not only in Philippines but in China and Pakistan. Also, it was reported that many of the workplaces were not providing good working conditions. So, the situation is aggravated with other charges pointed on Tasty Meals Limited and the restaurant chain in Philippines is not being forced to withdraw all their business connection with such suppliers which are not following ethical code of conducts and rule of law in certain aspects.
As explained by Bedenhorst (1994, p. 739), ethical procurement has been focused in modern day business activities. Purchasers get tempted by discounts and offers made by suppliers and such double standards create sense deceitfulness and untruthfulness overcome in the company. Such conditions might be profitable in the short run but cannot guarantee a win-win strategy in a longer perspective. Also, having relations to such supply base in the supply chain which are involved in illegal or unethical practices should not be a part of Tasty Meals Limited. This is because, such relationships foster further illegal activities done by those suppliers and in the end will be deteriorating the environment by making fortunes in their businesses. Such highlights in media have deteriorated organization profits and share prices to twenty five percent. This explains the fact that the customer base have taken such factors seriously and stopped their purchases from Tasty Meals Limited to stop feeding to the people involved in illegal activities. As a matter of fact, it is a compulsion on organizations to have their relationships to such business investors which are a part in bringing wider scale utility and advantage. Such a fact is important to be implemented on the base of utilizing environmental resources which are mutual to everybody. Therefore, it is the need in time that to demand from tasty Meals Limited to impose its code of conduct directives in such a way that each and every member of is supply chain is a legal and ethical entity in the environment. This will in return promote and cultivate business development in the local as well as international context also help law enforcement agencies to scrutinize such unethical or illegal practitioners in the business world.
Question 5: Overall do you consider Tasty meals Ltd complying with corporate governance principles? Can it be said that Tasty Meals Limited is an ethical and socially responsible corporation?
Answer: Corporate Governance is described as a strong means of guarantying that economic implementation power by the corporate segment is stranded in accountability, responsibility and answerability to its stakeholders; inside the organization or outside in the shape of investors, government, or to the boarder communal level (Knott 2002, p. 5). Not fulfilling such requirements lead to problems and allegations which Tasty Meals Limited in Philippines has been facing by media and other public bodies. In this consideration, Tasty Meals Limited appears to be disobeying and rebuffing corporate governance principles also appears not to be ethical and socially responsible corporate on following justifications:
Tasty Meals Limited in Philippines has not been good to their employees in terms of providing excessively unjust compensation. There have been no substantial increments in the wage structures and if they were made, the take-home wage still positions itself to be amongst the lowest in the country. Therefore, filling vaults by earning revenues is not acceptable in cotemporary business world until internal stakeholders are not compensated in an evenhandedness and impartiality manner by working on their welfare and appraising their work by monetary benefits (Mullerat and Brennan 2010, p. 220). Employees are also important stakeholders to any organization. Their needs and wants are to be fulfilled by the organization as their ethical and lawful duty also to be compensated in an impartial way. Tasty Meals Limited fails to do so and needs to revise their wage structures for employees and workforce.
Customers are the more important stakeholders in any systems which are to be treated in a just way. Tasty Meals Limited has not been complying the policy of truthfulness and providing superior quality products in the shape of healthy food if the accusation of using fatty oil is true. This is an absolute example being false and dishonest with the customers. Therefore, providing customers with the best information of the food is the ethical and legal responsibility of Tasty Meals Limited which they appear to be missing. Hence, the company appears not to be abiding by the principles spelled under corporate governance principles also with certain legislation regarding public disclosures (Korschun, Bhattacharya, Swain 2011, p. 13).
One of the important parts of corporate social responsibility and corporate governance in their business activities are to support environment from getting depreciate, weak and hazardous for the public. Tasty Meals Limited are alleged of using environmental hazardous cutlery and tableware for cutting internal costs and getting more profits. Such material is declared as non biodegradable which causes many threats to human ecology and healthy sustainability in the long run. Therefore, Tasty Meals Limited emerge to be against the principles of corporate governance principles (O’Brien 2001, p. 4).
Fulfilling the laws spelled by the government is the soul of corporate social responsibility and corporate governance. Tasty Meals Limited has not been abiding by the rules in regulations spelled by the National Wage and productivity Commission, Philippines in terms of compensating their employees to an optimum level. Also, they are guilty is using environmental hazardous tableware which it should have procured in the first place. Therefore, the restaurant chain in Philippines is found to be guilty in not fulfilling corporate governance principles (Mullerat and Brennan 2010, p. 95).
Question 6: If you were a top member of the Tasty meals’ management team, would you think the proposed actions from Philippines are appropriate? Why or why not?
Answer: The new set of rules and regulations devised at Tasty Meals Limited seem to be profound and insightful in nature which is answering every question and threat which has been brought by the media, customers, employees, environment agencies and green peace activists. As a matter of fact, the strategies proposed in the case for proposed actions from Philippines are based on strategic, tactical and operational objectives to be achieved. Such a road map is much necessary to meet society’s demand for better fulfillment of corporate social responsibility (Beardsell 2008, p. 4). All the internal and external stakeholders are kept in view while formulating the strategies to be perusing which ensures the appropriateness of the new policies. According to my view points on the subject matter, the proposed solutions are up to the mark based on following justifications:
The foremost step ensured by Tasty Meals Limited is to increase the hourly wage structure and compensate the employees according to Department of Labor and Productivity; meeting at least industry’s average. Ensuring such a step is not only a guarantee that it will bring wide scale welfare in twenty five thousand employees but also help to motivate them to work hard and bring excellence in their services. Fulfilling the concerns of internal stakeholders of an organization is the first step ensuring social responsibility of an organization which has been on the road leading to success in Tasty Meal Limited’s case (Mark-Herbert and Schantz 2007, p. 5).
Thinking of customer’s health is another key issue which has been under consideration by Tasty Meals Limited. As a matter of fact, the organization has decided not to deal in unhealthy large sizes of meals from the restaurant menu which is a giant leap towards social responsibility sacrificing revenues. On the other hand, the restaurant chain has also decided to reduce trans-fat contents of its cooking oil and replace it with healthy constituents which are safe for health and does not lead to obesity. Green salads are also declared as a main part of restaurants menu in order to cultivate health culture as a social responsibility at Tasty Meal Limited.
The company has formulated excellent strategies for showing their concern for the betterment of the environment. Firstly, the strategic decision of using thin wrapping paper which is easily recyclable and environment friendly containers to be used in the service process. On the other hand, “Waste Recycle Campaigns” are to be conducted in order to create awareness in public to be environmental safe by promoting recyclable products. Charity programs are also included for poor and ill children in Philippines so that they could get best possible health facilities from the revenues earned by Tasty Meals Limited. Doing so makes it certain that the organization is serious in brining welfare in the environment and such strategies should be welcomed by the public.
Devising a code of conduct for suppliers which are found to be involved in fraudulent, illegal and unethical activities will definitely provide a helping hand in fighting with crime. The same on the collective level can be helpful to eliminate crime from society. Thus, Tasty Meals Limited has proposed right action plans for upbringing its social and corporate image in Philippines.
Question 7: Do you believe that if Tasty meals approves and implements the proposals would that be made in a way to improve its profitability? Justify your answer.
Answer: The case explains that Tasty Meals Limited faced many economic problems in the shape of decreasing revenues and profitability. All happened due to poor strategies of the organization on their ‘social responsibility’ side of dealings. The firm was maintaining its going concern until such turbulence created by Media, green activists and customers. The accusations were serious and increasing in number day by day. The media highlighted that the employees are not better off due to improper compensation system and by also not abiding by the governmental laws for giving monetary support to the employees. On the other hand, customers might be furious on preferring the restaurant as it was also revealed that the food is cooked in unhygienic, oily and greasy cooking oil which is hazardous for health in the long term. Also, there were green activists who were getting against the company for not being environmental friendly organization and for deteriorating ecological system in the long run. The problems were clear but the negativity attached to the organization would take years to overcome the new policies which are to be ensured. The same will definitely lead to a respectable profitability base in the future if the new policies are to be implemented with quality and consistency.
As explained by Vlachos (2008, p. 6) that corporate social responsibility leads to an emotional attachment with the company in terms of greater preference by public for such organization. Corporate Social Responsibility plays a lead role in increasing an organization’s respect in the market. Thus, such emotional attachment brings brand loyalty which in return brings positive cash flows, employee and customer loyalties and revenues. Also, company’s ‘waste recycle program’ will help Tasty Meals Limited to save a lot of expenses which were used in procuring disposable table ware and cutlery. Therefore, such steps where the organization has made concrete policies eliminate the questions and concerns raised by the internal and external stakeholders will definitely give a way to Tasty Meals Limited to regain its lost position in Philippines, where people will love their ‘corporate citizenship’ by investing voluntarily on the public out of their revenues. Thus, it gets clear that new policies would help the restaurant chain in Philippines to increase its profitability.
Question 8: Do you think ethical and socially responsible business practices are always in conflict with profitability? Justify your answer.
Answer: There are two schools of thoughts present regarding Corporate Social Responsibility (Kolstad 2007, p.140). The first one explains that corporate social responsibility’s sole purpose is to maximize profits and public welfare is the government’s duty for which corporations and public pay a lot of taxes (Friedman, 1970). It was further explained that under corporate social responsibility, every policy should be focusing on making and enhancing profits and for business the policy should be profit centric. The school of thought explains the fact that being ethical and socially responsible in business practices are always in conflict with profitability.
But, modern day business has completely changed. Now, corporations focus on bringing performance and end results by utilizing internal and external organizational resources as a result of capital and human investment. Brucker (1993) has identified eight performance areas as indicators in such a way that it gets helpful in determining organizational performance, profits and revenue. These are productivity; manager’s performance and development; employees performance and attitude towards the job description; community conscientiousness using corporate social responsibility; marketplace standing of the company in the existence of competitors, exceptionality and innovation; yield as compared to inputs; and material and economic results. In this connection, community conscientiousness and public utility is one of the key factors in increasing the profitability function of a business. Corporate Social Responsibility is declared to be the social investment of organizations and corporations from their revenues to bring wide scale public utility and benefit. On the other side, as explained earlier that Corporate Social responsibility and fulfilling the gaps of government to bring ease for public leads to an emotional attachment of people with such entities. For example, Procter and Gamble supports many causes under United Nations different bodies in Africa to focus on child health care and explains their Corporate Responsibility attached to the sales of their products. Thus, in such manner, sales figures get sky high (Procter & Gamble, 2011). Also, the case of The Body Shop which also fulfils its social responsibility by not testing their products on animals and have initiated projects to help women get empowered in society (The Body Shop, 2011). In such cases, it is evident that corporate social responsibility has now become a strategic of business which aims in getting positive cash flows by increasing product and company loyalty and earn more profits in return. As a matter of fact, corporate social responsibility do conflict in maintain strong profitability structures but in such competitive environment where price wars between competitions in a market place is not longer in use like in past and aspects like corporate social responsibilities are widely used as a key weapon to increase profits. Therefore, in modern business times, Corporate Social Responsibility and profitability goes hand in hand.
Question 9: Assume that you are a substantial shareholder of Tasty meals Ltd; would you respond differently to any of the above questions and if yes which ones?
Answer: Tasty Meals Limited has been in many problems in Philippines which have lead to deterioration of profits by twenty five percent instantly. Such situations call for immediate policy making to answer the questions raised by the stakeholders. The same has been done in such stipulation in order to regain cash flows. The policies look philosophical and reflective to the mentioned problems and as a stakeholder I am happy with all the steps to be ensure expect the allegation rose on the company of being in business with unethical or any illegal practices. This is because it is the responsibility of law enforcement agencies and government of Philippines or any other country involved in child labor or any other activity which is prohibited to stop them. Thus, government agencies are to be realized as responsible to ensure business ethics. Tasty Meals Limited has been trying to establish best relationships with their suppliers in the system. On the other hand, such allegation gets baseless on the fact that companies doing illegal or unethical practices keep it secret and do not attempt such activities in public. Therefore, it gets hard for any company like Tasty Meals Limited to get to know whether the supplier is indulged in any sort of unethical or illegal activity or not. It is the responsibility of governments to keep a strong check on companies to get to know about the activities of such corporation and do their best to curtailing such business units. Therefore it is an undue and unjustifiable pressure from the media and other bodies on Tasty Meals Limited of procuring from companies which do not enjoy ethical business status.
Question 10: Do you think the government should regulate business ethics and social responsibilities? Why or why not?
Answer: Smith (1990, p.198) explains that corporate social responsibility should not practiced on various accounts. Out of all, the problem of legitimacy and fairness stands unique. It is explained that taking steps for solving social issues is the core responsibility of any government. In this regard, the corporations are bound to pay heavy taxes also the public which are supposed to give numerous taxes to the government. The government enjoys the authority and legitimacy to collect taxes and spend it on different social and economic programs. Thus, it becomes the sole duty of the government to regulate social responsibilities. On the other side of the coin, it is also the duty of government to enforce such rules and regulations which promote business ethics (Albareda et al 2008, p. 351). Micheal (2006, p. 6-7) explains that government should ensure straightforward and ethical concern of corporations including ethical handing of interest clashing between personal and public interest, fair and timely disclosure of information regarding business which should be known to all the stakeholders of the organization and abiding by rules and regulations spelled by the government to be followed in business transactions and operations.
Maintaining fairness and impartiality in bringing public welfare is also of mere importance. In this connection, it is more than difficult for the corporation to maintain fairness in corporate social responsibility and invest in a right way out of their revenues on public. So, businesses should be more focused on their operational activities rather than dealing with such issues. Maintaining business ethics is another facet the government should play a part in by keeping check and balance on organizations and corporations to do business in a moral manner. For example, European Commission for Trade encourages social responsibilities done by corporations on the logic that such entities are part of environment and consume mutual resources for their profit making. Europe 2020 and many other goals and objectives have been formulated by the Commission for injecting local development programs and youth skill programs (European Union Trade Commission 2002, p.12). The commission also enforces the need for corporations not only to evaluate key performance indicators based on cash flows, profits, revenues and sales figures but also evaluate the environmental utility brought by corporate governance and investing in the public and all other stake holders. Legislation in this regard can play an effective role in bringing business ethics and social responsibilities by corporations. For example Human Rights Act 1998, Public Interest Disclosure Act 1998 and Local Government Act 2000 in the United Kingdom and many other parts of the globe are present in the law guaranteeing that organizations must work in the set up defined by the government also does not be a source of harm further than a point which can cause irreversible impact on the environment for making revenues (Lyon and Maxwell 2008, p.241).
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