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K i n g s t o n B u s i n e s s S c h o o l , L o n d o n
Presented to
Dr. Fatima Annan-Diab & John Logan
Module – Responsible Management
Student id –K1359395
Kingston Business School, London
2015
A Report on the Corporate Social
Responsibility of KFC.
We invest to deliver a better tomorrow
Contents Executive Summary .................................................................................................................................... 2
Introduction ................................................................................................................................................... 2
PETA in a state of negation and war with KFC ................................................................................ 2
The Sadistic Abuse- Uncovered by PETA ....................................................................................... 3
Critical Analysis of KFC Initiative for Animal welfare .................................................................. 3
External Consultation ............................................................................................................................. 3
International Focus ................................................................................................................................. 4
KFC CSR Campaign to end hunger: Wall of Hope ....................................................................... 4
Corporate social responsibility of KFC – Carroll’s model ........................................................... 5
McDonald’s - A potential competitor of KFC .................................................................................... 8
Recommendations ....................................................................................................................................... 9
Conclusion .................................................................................................................................................... 10
References .................................................................................................................................................... 11
1. Appendix-1-KFC Awards and Recognitions ........................................................................... 12
2. Appendix-2- KFC Funds raised from charity ......................................................................... 14
3. Appendix-3-KFC in news ................................................................................................................ 15
4. Appendix-4- KFC CSR Goals .......................................................................................................... 15
5. Appendix-5-McDonald’s Open farms ........................................................................................ 16
6. Appendix-6- KFC Charities and donations ............................................................................. 18
7. Appendix-7- KFC Educational Grant Program ...................................................................... 19
Executive Summary This report analyses the CSR initiative launched by one of the world’s leading fast food restaurant,
KFC to maintain a heathy and transparent supply chain. KFC has been criticized by PETA on its
animal cruelty and unethical practices which had led to a decline in the sales, profits and
reputation. The company was in limelight for many odd reasons which are discussed in the report.
The company worked with Tyson Foods which was accused of routine cruelty and random sadism
to chickens in the slaughterhouse at Tyson Foods. KFC did face allegations for working with
unethical suppliers.
The study also evaluates the company’s CSR using Carrolls 4-part model which provides a picture of
the company’s current CSR position in the industry. It details out the economic, legal, ethical and
philanthropic responsibilities of KFC. Also a comparison study has been done on its potential
competitor, McDonald’s which did face the same issues of animal welfare in the past and how the
company worked on the CSR to improvisation on animal health, nutrition and welfare and also
contribute to the community.
The study shows the unethical usage of antibiotics which is an alarming situation for the brand as
well as for its shareholders and stakeholders. This would have a major impact on its sales and
profits. The suggestions in the report are made on the basis of providing various allegations faced
by the brand. Be it unethical supply chain in china or unhygienic outlets in Australia.
The report was designed by studying and researching various articles from newspapers and books
on operation management and operation strategy. Finally the report ends with conclusion and a
summarization of recommendation.
Introduction KFC Corporation, a subsidy of Yum!, based in Louisville, Kentucky, is one of the world's largest
chains of fast food restaurants, operating in more than 115 countries and serving more than 12
million customers around the world. The brand was founded by Harland Sanders in 1930 and is
known fried chicken which has been an order winner in market. Its enjoyed great success until the
turn of 21st century when the fast food has been criticized of animal welfare record, its links
to obesity and its environmental impact.
KFC enjoyed promotional tie ups and corporate sponsorships till early 2000 till, the People for the
Ethical Treatment of Animals (PETA) protested against KFC’s poultry suppliers worldwide(Wall
Street Journal, 2013). This had a great impact on the brand value and its sales.
PETA in a state of negation and war with KFC Since 2003, KFC faced worldwide protest from People for the Ethical Treatments of Animals
(PETA). PETA claimed KFC to work with unethical suppliers who were not only cruel with their
treatment but also were highly unskilled and untrained. They conducted many undercover
operations to expose and uncover the truth behind the brand’s success. Sadly, the main ingredient
to make a bucket full of fried chicken was cruelty.
More than 700 million chicken raised for KFC was treated like meat machines, not animals. They
were crammed by the tens of thousands into sheds. Their throat was burnt when the inhaled the air
filled with ammonia fumes generated from accumulated waste.PETA has asked KFC to make simple
changes in the way it treats the chicken, yet KFC refused to even do the bare minimum to spare the
birds the needless sufferings. Despite KFC claims, parent birds on supplier farms have their beaks
chopped soon after they are hatched. This painful procedure made eating excruciating for weeks,
and the shock of it sometimes killed the birds. The pain went on for weeks and resulted in slow
starvation.
The broiler chickens were bred and drugged in an unnatural fast pace, the birds become so fat so
quickly that their bodies cannot keep up. Their hearts, lungs and other organs find it difficult to
support their massive size which led to lameness. PETA exposed the catching process of birds to
slaughter was extremely harmful to them when done by poorly paid and poorly trained workers.
They grabbed 4-5 birds together and violently hurl them into crates, breaking their legs and
bruising. The birds were further manhandled at the slaughterhouse where they were snapped into
metal shackles and electric stun bath and finally dumped into boiling water for feather removal.
Few of the birds were still alive through this painful procedure.
The Sadistic Abuse- Uncovered by PETA
Six years after KFC promised to take animal welfare seriously, a PETA undercover investigator
witnessed workers at KFC-supplier slaughterhouse in West Virginia slamming live animals into
walls, stamping up and down on them, kicking them across the room and tearing them apart
(Appendx-2).
Critical Analysis of KFC Initiative for Animal welfare
The Animal Welfare Advisory Council
After facing the criticism of being highly unethical, KFC launched it animal welfare advisory council
along with US animal leader program in 2003. This program helped the brand to continuously
research on new methods on animal welfare advancement and adoption for new practices. The
council developed a set of protocols which allowed its suppliers to abide by the standards and
concentrate on compliance. The brand adoption of the American Meat Institute Slaughter protocols
enforced the suppliers to focus on their efforts and process in accordance with these widely
respected protocols. Additionally, the council has been also working with Yum! And it’s other
brands to globally align its core values of animal welfare. The program created polices and audit
documents which addressed the issues of well-being.
External Consultation
While KFC continuously works to keep up with its high standards of animal welfare, the brand also
seeks knowledge from external source for improvisation. KFC along American Association of Avian
Pathologists (AAAP) worked on animal welfare program and made major contribution to the AAAP
welfare subcommittees. The brand is also inspected by experts in academia, addressing legitimate
issues with deliberation to foster improvement.
International Focus
The brand along with its animal welfare advisory council and inputs from US and UK, established
Global Animal Welfare Program. The program adopted a consultancy and collaborative approach to
drive the animal welfare awareness in general in developing countries like china and India and to
encourage their suppliers to invest in R&D to improve animal welfare. This global initiate by KFC
was based on science, technology and had the best practices in the poultry industry, covered the
local needs and regulations. The suppliers were parented with common goals which resulted in
balanced approach benefiting animals, suppliers and consumers. The KPIs are also measured using
this program by analysing performance data and benchmarking the best performances. This
process kept the suppliers well-informed about their rank in the industry with other players. A
quarterly review is provided by the suppliers by the process of self-auditing. Annual audits are
carried out by third party for e.g. Australian Chicken Meat Federation, Inc. (ACMF) carried out
audits to ensure the brand abides by the protocol. In 2011, KFC UK was awarded by Red Tractor
Certification for using fresh chicken on the bone. In 2012, the quality team of KFC calibrated with
third party auditors of Brazil to assure alignment of policies and standards.
KFC CSR Campaign to end hunger: Wall of Hope
Hunger has a higher death toll worldwide than malaria, Aids and TB combined. KFC South Africa
launched a campaign to fight hunger. The campaign highlighted the issues of world hunger, sought
donations and educates consumers on KFC’s contribution towards this program. The wall of hope
was a chain of more than 5000 kids and each kid had an empty stomach which with the shoppers
could place a change, demonstrating that the donations are directly going to feed the hungry
children (Figure1). The program was a great success. (Appendix-1)
Figure-1 Wall of hope
Corporate social responsibility of KFC – Carroll’s model In 1991, Dr. Archie B. Carroll, a professor and business management author, devised a four part
model of Corporate Social responsibility which appeared to be a CSR pyramid (see Figure 5) and
has the following sections:
Legal: The corporations must ensure that their business processes and practices are legal. They
must abide by the rules, regulations and laws. Obeying laws protects all its shareholders and
stakeholders which reply on the business.
KFC abide by the laws, order, regulations and various polices. They have an internal audit on food
safety to meet the industry standards. The company has also fair wages and working hours for its
employees. It also maintains hygienic environment by abiding with the property law of the country.
Economic: Economic responsibility of a company includes being profitable ("Business Ethics’’,
2011) which would help the stakeholders with high returns on investments, increase job
opportunities, contribute to community and develop useful products and services for the society.
KFC believes and creates a win-win situation for the company and the community where they work.
Barnardo’s Partnership and the Work Foundation- The UK-wide partnership with
Barnardo’s provides placements in the restaurants for people struggling to find a job. The
programme provides crucial team-working and employability skills. Work with The Work
foundation to generate opportunities for young people by influencing public policies on
youth employment and training.
They provide training and development programmes for the young people in the community
to create a positive difference. KFC has a kick off 5 year expansion plans in UK and Ireland
creating more than 6500 jobs and thereby increasing its workforce to 23500(Telegraph,
2015).
They designed new restaurants to meet the local concerns and work with local communities
and are very flexible to customize their design depending upon the local needs.
They have developed work ready workshops initiative, where the youngsters are given on
job training from the employees.
They collect the litter and keep the community clean, hygienic and healthy. Figure 2.
Figure-2 KFC community work.
Ethical: Being ethical has become a critical responsibility of any company. Ethical responsibility is
to do what is right and fair, even if not legally required to do this. Ethical responsibilities could be
managing waste, recycling, employee welfare which included fair wages and working hours, animal
welfare etc.
KFC was claimed to be unethical in 2001 by PETA which resulted in the foundation of animal
welfare advisory council. The programme not only helped KFC to adopt best industry practises but
also its suppliers to abide by the ethical animal welfare policies. KFC is quick in reacting when held
with issues. For example,
All the KFC suppliers across the globe comply with the Red Tractor standards which enables
more transparency in its supply chain process for local and national stakeholders (CSR
Report 2013).
The company believed in animal welfare which is necessary for high quality food. KFC has
the Supplier Code of Practice which sets out the expectations on ethics, sustainability and
animal welfare, encourage the suppliers to practice ethical farming practices.
KFC was charged with serving expired meat to customers in China (Wall Street Journal,
2013). The brand quickly reacted to this issue and apologised to its consumers in public
forum.
KFC Thailand has issued an apology after Thai denizens criticized the company for a
Facebook message that urged people to rush home during Wednesday's tsunami scare and
order a bucket of KFC chicken (NDTV, 2012)(Figure-3)
Figure-3 KFC Apology letter
Philanthropic: The philanthropic responsibility helps in promoting human welfare and spread
health and harmony. For example, donations support for local community and running charitable
funds.
KFC has been very sensitive in designing its business process which accommodated its contribution
to humanity and harmony and raise donations . To list a few of them are:
The wall of hope which has been already discussed in the previous section was a very
sensitive and heart-warming initiative which touched millions of hearts and generated
millions of funds. The campaign ran for four weeks, raising over $250,000 in donations and
generating $150,000 worth of PR coverage (WSJ, 2012)(Appendix-6)
Figure -4 KFC Wall of hope in South Arica
The company has contributed to the global community by working together with UN World
Food Programme(WFP).This programme has helped to generate more than 1million pound
in UK and Ireland in the year 2014 there by providing 6 million meals for children in the
poor parts of the world.
KFC launched the Educational Grant Program in 2013 to help the KFC employees reach their
educational dreams (Appendix-7). Even though Colonel Harland Sanders was a 6th grade
dropout, he did understand the importance of education and created opportunities for its
employees by awarding REACH Educational Grants to more than 500 hourly team members.
Since 2006, an additional $10 million in college scholarships have been awarded by the
Foundation.
In last 2 years, more than 700 employees have received grants worth 1.5 million dollars In
the past two years, more than 800 employees have received grants worth nearly $1.5
million(Appendix-2)
From the above discussion, KFC is striving best to be a good corporate citizen. It has high
philanthropic and also economic responsibilities. The company do abide by the laws and regulation
to keep a check on its quality of food, suppliers and storage capacity. It also maintains health and
safety of its employees. However, KFC has witnessed some worst protest for being an unethical
company which did have an impact on its sales and reputation in china and India (BBC, 2012). The
company did accept the flaws and continued to work for improvisation. Figure 4
Figure-5 Carroll’s model
McDonald’s - A potential competitor of KFC McDonalds, an international fast-food chain, who's CSR is quoted as:
'At McDonald's®, giving back to the community has always been a key mission and part of our
heritage. And in Hong Kong, we are proud to be part of the communities we serve and community
involvement has always been a part of our culture.'
In early 1980s. McDonalds was on spotlight for the McLibel case which had lot of allegations against
the company and one of the major allegation was the animal cruelty (theguardian,2005).Though
the trail was ruled out due to lack on evidence, McDonalds had adopted ethical practices in animal
welfare and has launched initiatives to deal with the charges.
The company has launched McDonald’s Agricultural Assurance Programme (MAAP) which
ensures food quality and safety is integrated with the production right from the beginning
(McDonald’s, 2010). The programme is designed to support sustainability and improve
ethical conditions and to measure the annual progression. The programme focusses on the
areas like Animal medication, nutrition and welfare and also emphasised on environment,
good agriculture practices and transparency in supply chain(Appendix-5)
The Food Animal Initiative (FAI)- FAI farm is grown along the banks of the river Thames at
Wytham, Oxfordshire. Which was started by a group of farms in 1988 and now this farm has
become a critical research centre in the UK. McDonald’s has been a core supporter and has
been helping to develop new farming methods which will improve animal welfare and
produce high quality food(Appendix-5(a))
In 2009, McDonald’s Flagship Farms programme was launched in collaboration with the
Food Animal Initiative. The programme aimed at sharing sustainable and ethical agricultural
practices and shows its long-term commitment to agriculture across Europe.
In London 2012, McDonald’s Open Farms programme was launched to showcase the British
and Irish farmers that supply the menu to encourage best practice and raise awareness of
what British farming has to offer.
McDonald’s has bagged the Eggcellent awards from Compassion in World Farming for Europe-wide action on cage-free eggs. McDonald’s supply chain and farms are very transparent to its stakeholders, local and also national, which not only increase trust in business but also position them as a social corporate citizen in the industry.( Appendix-5(b))
Recommendations
After all the protest and criticism, KFC should work on strengthening its brand position. The
company must have a clean and transparent supply chain and should be more interactive
with the media to communicate with its stakeholders.
KFC must learn from its competitors. It must start its own local poultry farms instead relying
on suppliers. They must launch animal welfare programmes with local farmers.
As the company was charged with animal cruelty, it must launch programme to enhance the
health of animals with open farms thereby developing healthy environment for the animals
to grow.
People these days are very health conscious and KFC should keep this in mind when
preparing its menu. It should make healthy food and include vegetarian menu also.
KFC has been accused of serving chicken’s brain and kidney (adweek, 2013)(Appendix-4). It
must create a process to track its food preparation techniques and train its staff to abide by
the process.
It could also start Master Franchise where all the responsibilities are given to a single
franchise. The master Franchise would be solely responsible for all the operations. This
helps the brand to focus on other issues rather than concentrating on the supply chain
network.
Conclusion KFC has a high CSR value which could be derived from the above discussion. However, after having
many policies and programmes to deal with the suppliers, there are definitely loop holes in the
supply chain network which spoils the reputation of the company thereby lowering its sales and
growth. KFC must focus on sustainability for which it should launch programmes that could audit
the suppliers at a close range. Furthermore, the internal employees must be trained to validate the
food items before serving them to the consumers. They should be taught to differentiate between
fresh and expired items. The company is no doubt doing a great job in being philanthropic but it
should also focus on helping people which are affected by natural disaster. Though, KFC secret
recipe has continued to win millions of hearts and smile across the world, it must strengthen its
position to attain sustainability.
References
KFC. (2013). Are Your Chickens Well Looked After? . Available: http://www.kfc.co.uk/our-food. Last
accessed 22nd may 2015.
YUM!. (2014). Corporate Social Responsibility Report. Available:
http://www.yumcsr.com/food/animal-welfare.asp. Last accessed 22nd may 2015.
KFC. (2014). There’s more to us than great food. Available:
http://www.kfc.com/about/responsibility.asp. Last accessed 23rd may 2015.
Alex Blyth. (Jul 26, 2003). KFC and PETA. Available: http://www.ethicalcorp.com/content/kfc-and-
peta. Last accessed 22nd May 2015.
PETA.org. (2012). Exposed: Tyson Workers Torturing Birds, Urinating on Slaughter Line. Available:
http://www.peta.org/action/action-alerts/tyson-workers-torturing-birds-urinating-slaughter-
line/?_ga=1.150439350.1600199513.1433706973. Last accessed 24th may 2015.
PETA.org. (2010). KFC Supplier Exposed in New Undercover Video.Available:
https://secure.peta.org/site/Advocacy?cmd=display&page=UserAction&id=1552. Last accessed 24th
may 2015.
CHRISTOPHER HOOTON. (2015). KFC is dreadful, the company has ruined the product' says man
who brought it to the UK, 'I would not go in there'. Available:
http://www.belfasttelegraph.co.uk/life/food-drink/kfc-is-dreadful-the-company-has-ruined-the-
product-says-man-who-brought-it-to-the-uk-i-would-not-go-in-there-31146008.html. Last accessed
25th may 2015.
LAURIE BURKITT. (2013). Yum Brands Apologizes Amid Chicken Probe. Available:
http://www.wsj.com/articles/SB10001424127887324081704578232791336513864. Last accessed
24th may 2015.
McDonald's. (2014). Corporate Social Responsibility (CSR).. Available:
http://mcdonaldsethics.weebly.com/mcdonalds-ethical-issues.html. Last accessed 23rd may 2015.
McD. (2013). the McLibel Trial Story. Available: http://www.mcspotlight.org/case/trial/story.html.
Last accessed 22nd may 2015.
Mark Oliver. (2005). McLibel. Available:
http://www.theguardian.com/news/2005/feb/15/food.foodanddrink. Last accessed 23rd may 2015.
1. Appendix-1-KFC Awards and Recognitions
2. Appendix-2- KFC Funds raised from charity
3. Appendix-3-KFC in news
4. Appendix-4- KFC CSR Goals
5. Appendix-5-McDonald’s Open farms
6. Appendix-6- KFC Charities and donations
7. Appendix-7- KFC Educational Grant Program