INTRODUCTION
Kentucky Fried Chicken (KFC), founded by Colonel Harland Sanders in 1952, is a globally recognized fast-food chain famous for its fried chicken With a diverse menu that includes various fast-food offerings, KFC operates in over 140 countries, establishing itself as one of the largest fast-food chains worldwide.
KFC, despite its global popularity, has encountered significant ethical challenges, particularly concerning animal welfare and various business ethics scandals These issues have attracted public scrutiny and diminished customer trust in the brand However, KFC is actively adapting and innovating to address these ethical concerns, striving to maintain its status as a leader in the fast-food industry This case study highlights the complexities of promoting ethical conduct in business while navigating challenges and opportunities.
ABOUT KFC
History of KFC
KFC (Kentucky Fried Chicken) was founded by
Colonel Harland Sanders, an early developer of the fast food industry, in Corbin, Kentucky It is the world's fourth-largest restaurant chain after
McDonald's, Subway, and Starbucks, with
KFC operates 26,934 restaurants across more than 145 countries and territories globally (Yum! Brands, 2021) The brand is known for its diverse menu, featuring items like fried chicken, fried potatoes, sandwiches, hamburgers, and a range of other products marketed under different labels.
During the Great Depression, Harland Sanders began selling fried chicken from a roadside shack in Corbin, Kentucky In 1939, he developed the iconic 11-ingredient secret recipe for Kentucky Fried Chicken, and in 1952, he established his first franchise KFC's entry into the fast-food market not only popularized chicken but also introduced healthy competition against the dominance of burgers.
KFC, a private corporation employing approximately 800,000 individuals, holds a significant position in the fast-food industry, commanding 10.6% of the total revenue in the chicken franchise sector in the United States, according to IBISWorld's industry market research.
& Statistics) According to the Yum! Brands 2021 annual report, KFC's annual revenue is $31.365 billion.
Core Values of KFC
There are three key house rules at KFC:
“At KFC, we have a passion for food and serve it with pride.”
KFC makes sure to satisfy every customer and serve them as friends so that everyone leaves happy
“Our food is always craveable We are the original fried chicken experts, and everything we do celebrates our passion for serving finger- lickin’ good food.”
KFC prides itself on its unique recipes and high-quality food, setting it apart from other fast food chains Their commitment to using fresh ingredients and skilled chefs ensures a superior dining experience.
KFC’s Ethical Responsibilities
The KFC Group stands out for its commitment to fulfilling its mission, ensuring they put in the effort to deliver on their promises Unlike a distant vision, KFC actively engages in initiatives that benefit their key stakeholders, including customers, partners, and employees.
Some of the missions that some KFC franchise companies around the world have launched are:
• “To be the leader in western style quick service restaurants through friendly service, good quality food and clean atmosphere”
• “To maximize profitability, improve shareholder value and deliver sustainable growth year after year”
• “You keep employees longer, they are happier, and they work better for you”
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KFC has implemented a higher minimum wage for its employees, ensuring that all staff members receive a competitive salary that reflects their hard work and dedication to their assigned tasks and responsibilities.
KFC fosters a culture centered around the philosophy of "How we win together," promoting unity and collaboration among its team members This approach inspires employees to collectively contribute to the growth of the company, ensuring customer satisfaction while instilling a sense of pride in being part of the KFC family.
KFC values its employees and recognizes their potential to make a significant impact, fostering a culture of respect and attentive listening to each member's contributions The company is dedicated to supporting career development and creating a work environment that promotes a healthy work-life balance for all employees.
KFC Vietnam is dedicated to empowering individuals to reach their full potential by fostering a culture that prioritizes results Every role begins with the question, "What can we do to achieve success?" This approach encourages creativity and responsibility among employees, harnessing their abilities and enthusiasm to enhance collective performance.
KFC employees receive a membership card that offers exclusive discounts, including a 10% discount at partnered coffee shops and a 20% discount on food purchases at KFC locations.
• A clear and open career path to becoming a restaurant manager
• Working in a dynamic environment, helping employees develop communication, problem-solving, and work management skills
All products and services throughout the supply chain are sourced ethically and through sustainable methods
KFC prioritizes ethical labor practices within its supply chain, ensuring the use of certified products that adhere to fair trade standards The company is dedicated to maintaining high quality by strictly following food hygiene regulations, and it guarantees that its chicken ingredients are raised without the use of stimulants.
During the avian flu outbreak, KFC has implemented proactive measures to maintain ingredient quality, including the use of reserved chicken when necessary.
KFC is committed to customer health by using healthier oils, having replaced soybean oil to lower the risk of obesity and cardiovascular issues Additionally, the restaurants utilize specialized test paper to monitor the oil's condition and ensure its quality.
KFC Vietnam only chooses reputable and quality raw material suppliers, affirming the quality of its products with quarantine certificates
In addition to complying with basic environmental laws, the company is actively undertaking initiatives to reduce its carbon footprint and investing heavily in being environmentally conscious
In December 2008, KFC transitioned to modern microwave ovens and reduced frying methods to enhance environmental sustainability and promote healthier options for consumers, ultimately boosting the company's reputation among customers.
All stakeholders, including suppliers, employees, and distributors, are treated with respect and fairness
KFC, as a franchise corporation, emphasizes the importance of managing and supervising its business partners to ensure clarity regarding their obligations, responsibilities, and future goals The company's philosophy focuses on fostering understanding among managers and employees, aligning their motivations and work methods to promote smooth operations and minimize misunderstandings.
KFC prioritizes customer retention by enhancing product and service quality The company places a strong emphasis on quality, training employees to deliver exceptional customer service To ensure continuous improvement, KFC conducts regular surveys to gather customer feedback, using the insights gained to align their offerings with customer expectations.
KFC is dedicated to ensuring customer satisfaction while delivering value to all stakeholders involved in its operations The company aims to be recognized for its contributions and takes its responsibilities to the market and society seriously.
• Providing customers with fast and delicious food, served in a friendly environment, to attract smart, knowledgeable customers around the world
• Maximize profits, increase shareholder value, and deliver steady company growth year after year
To attract and retain top talent, organizations should focus on recruiting and developing exceptional employees by offering favorable working conditions, effective leadership, and a performance-based pay structure Implementing an appealing benefits program, providing opportunities for career advancement, and ensuring high job security are essential strategies for stimulating and rewarding employees, ultimately fostering a motivated and committed workforce.
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CASE 1: KFC’S 2017 DILEMMA
Background of The Dilemma
In 2015, McDonald’s announced it would stop serving chickens raised with human antibiotics, responding to mounting pressure from environmental and medical organizations These groups expressed concern over the use of medically important antibiotics in food animal production, highlighting the potential risks to public health.
Food producers often administer human antibiotics to livestock to promote growth and weight gain while reducing feed intake This practice raises concerns as it can lead to antibiotic resistance in bacteria, rendering certain medications ineffective for treating human illnesses The Centers for Disease Control and Prevention attribute approximately 23,000 deaths and $55 million in healthcare costs annually to antibiotic-resistant infections linked to the routine use of these substances in food animals In response, the World Health Organization and the U.S Food and Drug Administration recommend eliminating antibiotics in animal agriculture to combat this growing health threat.
At that time, KFC’s dilemma was either to support the trend or to ignore it, and both options were potentially unethical and harmful.
KFC's Initial Action
When the news about McDonald’s decision appeared, the organization’s representatives were either unavailable for comments or refused to explain anything
Moreover, the statistics on who KFC buys chickens from and how much it buys annually were not disclosed
In 2016, the Natural Resources Defense Council (NRDC) published an annual scorecard evaluating the antibiotic use policies of the 25 largest fast food and fast casual restaurant chains, revealing that the number of chains receiving passing grades had doubled from the previous year.
Despite the leadership landscape, KFC continues to neglect its responsibility in combating antibiotic-resistant superbugs, receiving failing grades for two consecutive years, unlike its competitors.
Subway, Chick-fil-A, McDonald’s, Wendy’s, and
Taco Bell—pass them by, committing to prohibit the routine use of antibiotics in their chicken supply and making real progress in implementing that policy
Over 350,000 consumers have petitioned KFC to stop using antibiotics critical to human health in their chicken supply, but the company has not responded to this significant public outcry.
KFC's Final Decision
In May 2017, KFC announced its commitment to serving chicken raised without antibiotics, a policy that will be implemented across 4,200 restaurants and approximately 2,000 domestic chicken farms This "no antibiotics" policy will vary based on conditions in each country Despite potential cost increases associated with this change, KFC's leadership stated that the company aims to manage these expenses effectively, ensuring that customers do not bear the full financial burden.
Effect of The Decision on Major Stakeholders
KFC's decision to refuse chicken from suppliers using antibiotics could have significantly impacted the company, potentially costing millions in necessary supply chain modifications.
KFC's recent policy change regarding antibiotic use in poultry is poised to significantly impact the poultry industry, as the fast-food chain sources chicken from numerous flocks for food safety According to Lena Brook from the Natural Resources Defence Council, suppliers who refuse to eliminate antibiotics may face health concerns and risk losing business from major players like KFC This pressure could compel suppliers to cease antibiotic use altogether While the transition presents challenges for some suppliers, companies like Tyson, the largest poultry producer in the U.S., are already taking steps to comply by planning to remove antibiotics from chicken diets by September 2017.
Advocates for ending certain practices in the food industry have effectively advanced their agenda, as demonstrated by KFC's response, indicating that they can continue to influence industry standards.
Concerning the customers, they may feel safer now knowing that KFC adheres to the antibiotic-free-chicken policy.
KFC's Two Options
There are probably two options KFC could choose
KFC could have enhanced its reputation by refusing to partner with suppliers that use antibiotics in raising food animals, publicly announcing this decision to resonate with health-conscious consumers This move would likely have garnered praise from opponents of antibiotic use in food production and strengthened KFC's image among its target audience However, the company might have faced significant challenges, including the need to establish new supply chains, potentially harming existing suppliers and complicating the search for suitable alternatives.
An alternative approach would have been to maintain the initial stance and refrain from commenting on antibiotic use altogether Many companies often attempt to obscure their errors or unethical practices by misrepresenting information However, research has shown that transparency and honesty are far more effective strategies (Crane and Matten 460) KFC's efforts to hide the presence of human antibiotics in its products and avoid addressing the issue could backfire.
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KFC's recent decision reflects a strategic business approach that aligns with the evolving values of today's consumers, who increasingly prioritize transparency and quality in their food choices Research indicates that diners are now more inclined to consider the integrity of ingredients and production practices at the point of sale In response to growing concerns about antibiotic use, KFC has successfully adhered to FDA regulations and addressed critics, reassuring customers that their commitment to food safety will mitigate worries about antibiotic resistance.
KFC's Achievements
The 2017 NRDC Report showed that among 25 ranked brands, KFC improved the most over the last year, earning a “B ” compared to 2016’s “F” -
In 2019, KFC announced it had successfully achieved its goal of sourcing 100% of its chicken raised without antibiotics important to human medicine, becoming the first major chicken chain to apply this commitment to bone-in chicken, which constitutes approximately 60% of its U.S menu.
KFC’s execution in less than two years is commendable considering the chain received an
“F” rating from advocacy groups for its antibiotics policies less than three years ago With nearly
2,000 farms involved – most of them family-owned and managed this transition was no small feat –
This success shows a great statement of commitment and capacity to drive positive change
With more than 4,000 U.S restaurants, KFC’s announcement is a big step for the antibiotics-free movement
CASE 2: CHICKEN ABUSE
Chicken Welfare
Since the late 1990s, KFC has encountered significant protests from People for the Ethical Treatment of Animals (PETA), an organization dedicated to animal rights advocacy, as reported by Donald G McNeil Jr in his article published in the New York Times.
In 2004, an animal rights organization engaged in a prolonged legal battle with KFC unveiled a shocking videotape that depicted slaughterhouse workers from one of KFC's suppliers mistreating live chickens The footage showed these workers jumping on the birds, drop-kicking them, and slamming them against walls, seemingly for amusement.
KFC has faced serious allegations of animal cruelty, as documented by an undercover investigator revealing horrific practices at its suppliers' farms These include suffocating chickens with latex gloves, tearing off beaks, and other abusive actions such as spitting tobacco into birds' mouths and ripping off heads for graffiti Additionally, chickens are crammed into filthy conditions, bred and drugged to grow excessively large, often resulting in broken wings and legs During slaughter, many are still conscious when their throats are slit and they are dropped into scalding water PETA has publicly accused KFC of animal abuse due to these disturbing practices.
In 2022, VFC released footage revealing troubling conditions at a supplier's farm housing 380,000 birds, where they were kept in extremely high stocking densities within a large shed that lacked adequate environmental enrichment This overcrowding restricted the birds' movement and inhibited their ability to engage in natural behaviors such as foraging and exploring.
Most chickens raised for KFC are fast-growing breeds that achieve slaughter weight in just 30 days According to a report by the UK’s Guardian, the emphasis on rapid growth and increased breast meat production has led to significant health and welfare issues for the birds.
In a 2020 report, KFC revealed that over a third of its chickens suffer from painful inflammations and various health issues, including heart and liver failure, due to inadequate conditions at their supplying farms The report highlights that increased demand for chickens exacerbates these health problems Additionally, one in ten KFC chickens experiences hock burn, a condition caused by ammonia from waste, which can severely damage the skin on their legs, typically affecting inactive birds.
The weighted mortality rate on KFC farms is approximately 4%, resulting in the loss of around 400 birds in a flock of 10,000 This figure exceeds the industry average mortality rate of 2-3%, as reported by The British Poultry Council.
Why Does This Problem Matter?
The issue of animal cruelty is important because the need to avoidance of suffering to animals is the same as those of beings humans
Animals rely on humans for protection and care, as they lack the ability to engage in social contracts or make moral decisions Consequently, it is essential to acknowledge their moral rights While using animals for food, entertainment, or research is not inherently wrong, humans have a responsibility to prevent unnecessary suffering caused by their actions The sanctity of life is crucial, whether it pertains to animals or humans.
The mistreatment of animals in food production can lead to significant health issues, as medical professionals indicate that diets derived from such sources are not only nutritionally inadequate but may also pose serious health risks.
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The consumption of animal-derived products contributes to the worsening of conditions such as diabetes and many others By implementing more humane practices in the food chain, these health issues can potentially be mitigated.
Consequences
The cruel treatment of animals during breeding for food production at KFC raises significant concerns, not only for the welfare of these animals but also for advocates of animal rights movements who are deeply troubled by the harsh conditions they endure.
Customers of KFC are also impacted directly by the problem because the harmful effects of consumption of this source of food on human health are incurred by these consumers
The exposure of animal abuse cases has posed significant challenges for KFC, intensifying public awareness around animal welfare These incidents have sparked widespread outrage, leading to a decline in the corporation's reputation, turnover, and profits, particularly due to advocacy from organizations like PETA.
The case also affected the business all over the world since after the incident, stakeholders’ expectations and demands regarding the standardized guidelines of animal treatment also increased
Animal welfare has become a critical concern, with increasing awareness of the need to enhance the lives of chickens, as highlighted by Tracey Jones, global director of food business at Compassion in World Farming.
KFC's Efforts
KFC has developed a series of plans to overcome the problems
When receiving a little pressure from PETA, KFC Canada agreed to a historic new
CAK, or Controlled Atmospheric Killing, is a humane method of poultry slaughter in Canada that minimizes suffering by ensuring chickens are handled gently during the process This technique avoids the stress and injuries often associated with traditional methods, such as flapping and scratching, by allowing workers to operate in a calm environment with bright lighting and clean air As a result, CAK leads to improved outcomes for both the animals and the efficiency of the slaughter process.
KFC's official policy mandates that all suppliers must refrain from using hormones and steroids to enhance chicken growth, as the birds are already genetically engineered for faster development Additionally, the use of antibiotics is strictly prohibited.
To show their sincerity in transformation, KFC even formed the KFC Animal
The Welfare Advisory Council, comprised of esteemed experts, offers insights and guidance rooted in relevant data and scientific research, which are essential in shaping their animal welfare program.
In 2020, KFC announced its intention to shift a greater number of its 34 suppliers towards slower-growing chicken breeds, which are less susceptible to disease and injury, thereby minimizing the reliance on antibiotics.
The fast food company aims to decrease stocking density on supplier farms, which can improve animal health and welfare by minimizing issues such as footpad dermatitis and enhancing the ability of animals to engage in natural behaviors.
KFC has now signed up for the NGO-led Better Chicken Commitment (BCC) to improve animal welfare standards for birds.
OTHER ISSUES
Unfair Labor Practices
KFC has been accused of several unfair labor practices over the years, including wage theft, discrimination, and poor working conditions
One of the most common allegations against
KFC is that the company has engaged in wage theft, which is a practice where employers illegally withhold wages from their workers In
In 2016, KFC faced a lawsuit from employees alleging unpaid wages for hours worked, denied breaks, and lack of reimbursement for work-related expenses, which are violations of the Fair Labor Standards Act.
Standards Act (FLSA), which sets standards for minimum wage, overtime pay, and other employment practices in the United States The case was settled for an undisclosed amount
KFC has faced significant criticism regarding its treatment of workers globally In 2017, the company settled a lawsuit for $30,000 with a former employee who alleged she was terminated due to her pregnancy Furthermore, a 2019 report by The Guardian revealed that migrant workers at a KFC supplier in Malaysia endured slave-like conditions, including excessive working hours, physical and verbal abuse, and confiscation of their passports In response, KFC initiated an investigation and severed ties with the supplier involved.
KFC is actively addressing wage theft and improving franchisee training by implementing new policies The company has pledged to raise wages for its hourly workers in the United States Despite these efforts, labor advocates emphasize that additional measures are necessary to ensure fair treatment and adequate wages and benefits for KFC employees.
Environmental Concerns
KFC has been embroiled in multiple environmental ethics scandals, notably regarding its role in deforestation and climate change, alongside concerns related to water pollution and waste management A key issue has been the company's significant contribution to deforestation, raising serious ethical questions about its environmental practices.
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Log in and loss of biodiversity This has led to criticism from environmental advocates, who have called on KFC to take stronger action to address its environmental impact
KFC has faced scrutiny regarding its waste management practices, as the company produces substantial waste from packaging, food, and other materials in its restaurants Environmental advocates argue that KFC has not sufficiently addressed its waste footprint and needs to enhance its recycling and composting initiatives.
In addition, KFC has been accused of contributing to water pollution in some areas For example, in 2016, KFC was fined
$8.3 million by Chinese authorities for violating water pollution regulations The company was accused of discharging waste in the river
KFC's environmental ethics scandals have led to calls for the company to take stronger action to address its environmental impact KFC has taken some steps to address these concerns
In 2018, the company pledged to source all of its fiber-based packaging from certified or recycled sources by 2020, and KFC has set a goal to eliminate all plastic packaging by 2025.
KFC's Business Ethics Issue in Vietnam
KFC has faced a significant business ethics scandal in Vietnam, where the company has been accused of a range of unethical practices, including tax evasion, bribery, and operating without proper licenses
One of the most high-profile accusations against KFC in Vietnam involves tax evasion In 2012, KFC Vietnam was accused of evading nearly $4 million in taxes by
18 launched an investigation into the company's tax practices, which ultimately resulted in KFC Vietnam being ordered to pay back taxes and penalties
KFC Vietnam faced serious allegations of bribery and corruption, notably in 2013 when the company was fined for offering bribes to local officials to speed up permit approvals for its restaurants Additionally, KFC was accused of attempting to bribe officials to evade fines related to violations of food safety regulations.
In addition, KFC Vietnam has been criticized for operating without proper licenses In
2017, the company was fined for operating four restaurants without the required licenses, which led to calls for the company to be more transparent and accountable.
OUR POINT OF VIEWS
There are several reasons why ethical problems occur in this business
An ethical dilemma arises when moral principles fail to clearly define the right or wrong course of action As competition among fast food restaurants intensifies, KFC must expand its menu options to satisfy the evolving preferences of its customers.
Businesses must focus on increasing sales, reducing costs, and maximizing profits while navigating ethical dilemmas related to product quality, animal welfare, and working conditions.
Maximizing profits is a primary goal for businesses, but this pursuit can sometimes result in unethical practices, including compromising safety, exploiting employees, or committing fraud Research from TCB and Associates indicates that companies with lower profit margins are more prone to engage in illegal activities.
Competing interests can complicate ethical decision-making for individuals and organizations, as seen when companies prioritize profits over customer welfare or environmental sustainability.
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RECOMMENDATION
Immediately Terminating The Contract With Unethical Supply Chains
KFC should establish a detailed supplier code of conduct within their contracts to guarantee compliance with labor standards, environmental considerations, and ethical practices throughout their supply chain Additionally, it is essential for KFC to implement a dedicated monitoring department responsible for the regular oversight, evaluation, and assessment of supplier production.
Investing in research to explore natural agents and diverse cooking methods is essential for improving chicken quality, rather than relying on chemical injections Additionally, it is important to avoid excessive use of monosodium glutamate to ensure a healthier product.
KFC should raise the minimum wage and enhance employee benefits by providing a comfortable work environment, health insurance, childcare support, and incentive travel programs Encouraging employees to share their ideas and offering opportunities for growth and development is essential Additionally, KFC must establish strict ethical standards for its workforce to ensure a positive and productive workplace.
Expanding The Menu to Include More Vegetarian or Healthier Options
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A massive 66% of the global population is paying more attention to their overall health now than before COVID-19 (Mindshare's
KFC should expand its menu to include more meat-free options, such as grilled or baked dishes, along with a variety of salads and vegetable-based sides By introducing healthier choices, KFC can attract new customers and retain health-conscious patrons Furthermore, offering detailed nutritional information, including calorie counts and ingredient lists, will empower customers to make informed decisions about their meals.
The Global Sustainability Study 2021 reveals that over one-third of global consumers are ready to pay a premium for sustainable options, reflecting a rising demand for environmentally-friendly products As consumers become more aware of the environmental impact of their food choices, KFC should prioritize the use of eco-friendly packaging, such as recyclable or biodegradable materials Furthermore, KFC can enhance its sustainability efforts by sourcing ingredients from sustainable suppliers and supporting local farmers whenever feasible.
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CONCLUSION
KFC, as a global brand, has faced various challenges and mistakes in its operations However, the company has acknowledged its past missteps and implemented measures to address unethical practices As a leading fast food chain, KFC recognizes that food safety standards differ across countries, which can lead to significant costs This complexity sometimes results in multinational corporations, including KFC, compromising on corporate social responsibility and ethical considerations to enhance profitability.
Corporate ethical responsibility is essential for a company's image and growth While KFC has made strides in certain areas, there are notable deficiencies that require attention Specifically, the company has not fully embraced environmental protection initiatives, such as utilizing biodegradable food packaging and tableware Additionally, it is crucial for KFC to enhance its food safety measures to ensure product quality and safeguard public health.
Understanding corporate ethical responsibility is crucial for business organizations to achieve long-term success KFC has effectively enhanced its brand image by prioritizing ethics and implementing initiatives that benefit the environment and society These efforts have garnered positive media attention, reinforcing KFC's competitive position in the marketplace.
As consumers increasingly prioritize ethical and sustainability concerns, it is essential for companies like KFC to adopt responsible business practices and proactively address ethical issues By committing to sustainability and ethical conduct, KFC can strengthen its position in the fast-food industry while fostering long-term success and profitability.
Customers are more satisfied when they buy from socially responsible companies, which also fosters employee pride and strengthens trust with investors and shareholders By meeting the expectations of all stakeholders without sacrificing economic goals, businesses can thrive in a globally interconnected world Collaboration among stakeholders is essential for addressing mutual needs and ensuring sustainable success.
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