Is Foxconn Baking Apple’s Reputation?

January 29, 2012

If you have an iPod, iPad, or iPhone, do you ever look at it and wonder about the people who assembled your electronic marvel?  Most people do not think about the supply chain, including labor, that goes into the products they use.  Yes, we do know about sweat shop and child labor and efforts to reduce this problem in the garment industry.  Yet every product has a supply chain behind it that may have problems associated with it.  Apple products, like most in the electronics industry, have “problems” with using conflict metals and minerals as well as labor issues.  This case will focus on the labor issues.

 

In February of 2011, Apple releases a report titled “Apple’s Supplier Responsibility 2011 Progress Report.”  It was the first effort by Apple to expose the labor problems it faces.  Among the problems were 137 employees being poisoned at its Wintek’s Suzhou factory in China by n-hexane, a cleaning agent used in the production of parts for Apple and Nokia. For Apple, the facility makes iPhone screens. The report also noted compliance problems with the 60 hour work week established by Apple.    However, the report does not offer much detail about what Apple is doing to address the problems.

 

The most disturbing part of the report might have been the problems at FoxConn Technology in Shenzhen.  During one five-month span, there were 15 suicides or attempted suicides.  The problem was so bad that the factory hung netting to catch workers trying to commit suicide by jumping from certain locations in the factory.

 

Foxconn remains a very active problem for Apple.  Major news outlets, including the New York Times, continue to report about the problems there.  After running two stories about Foxconn in January of 2012, Apple decided to reply to the New York Times.  The reply was a e-mail that CEO Tim Cook sent to employees.  It should be noted that Cook is the person at Apple who found the Foxconn facility.  The long e-mail is an attempt to boost employee morale.  The reports linking Apple to the tragic events at Foxconn can demoralize employees if they feel the company they work seems to care so little about people further up the supply chain.  Here is the text of the e-mail:

 

Team,

As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain. Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.

For the many hundreds of you who are based at our suppliers’ manufacturing sites around the world, or spend long stretches working there away from your families, I know you are as outraged by this as I am. For the people who aren’t as close to the supply chain, you have a right to know the facts.

Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we’ve made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people.

At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.

Earlier this month we opened our supply chain for independent evaluations by the Fair Labor Association. Apple was in a unique position to lead the industry by taking this step, and we did it without hesitation. This will lead to more frequent and more transparent reporting on our supply chain, which we welcome. These are the kinds of actions our customers expect from Apple, and we will take more of them in the future.

We are focused on educating workers about their rights, so they are empowered to speak up when they see unsafe conditions or unfair treatment. As you know, more than a million people have been trained by our program.

We will continue to dig deeper, and we will undoubtedly find more issues. What we will not do — and never have done — is stand still or turn a blind eye to problems in our supply chain. On this you have my word. You can follow our progress at apple.com/supplierresponsibility.

To those within Apple who are tackling these issues every day, you have our thanks and admiration. Your work is significant and it is changing people’s lives. We are all proud to work alongside you.

Tim

Below are some reactions posted to a news story about the e-mail:

The only reason Cook and the Board care now is because of Public outcry… But it won’t hurt sales… People want the cheapest price they can get no matter what the costs. Hypocrites.

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Coldwaters Rundeep · 22 hours ago

Who is making sure Apple is following it’s own policies? Corruption in this neck of the woods is to great to leave it up to the parent corporation and needs an outside agency that is arm length with Apple.

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Tony · 19 hours ago

To which I would reply to Mr. Cook, bullshit. Apple doesn’t even care about people at corporate let alone the factories. Granted its a different level of caring but people are not treated with respect at Apple at. Very personal experience allows to me to share this. My experience with Apple in Cupertinomis that most people there can’t wait to get a job elsewhere. Get Apple on the resume and move on as quickly as possible. It’s a shit environment.

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Industrial Hitlers · 20 hours ago

Apple CEO Tim Cook, just like Better-Off-Dead Liar and Stinky Hippie Steve Jobs, is an Industrial Hitler issuing self-serving propaganda while murdering slave labor.

People who eat up his obvious PR spin are complicit. That includes Obama, Congress, and every Apple employee and customer.

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Will · 23 hours ago

Apple is to blame b/c it has been squeezing supplier profit margins which requires them to cut corners on safety. It’s that simple. Apple should use some of its record profits and provide it’s suppliers with some money to improve safety at its factories.

The concern over Foxconn is real for Apple. In late January, a self-described Apple started a petition at Change.Org.  Here is the e-mail requesting support for the petition:

According to the New York Times, workers at a factory in Shenzhen, China, owned by Foxconn (a company that manufactures iPhones, iPads and other devices for Apple) regularly work sixteen-hour, seven-day work weeks.

They stand until their legs swell and they can’t walk, and they perform repetitive motions on the production line for so long that some permanently lose the use of their hands. To cut costs, managers make workers use cheap chemicals that cause neurological damage. There has been a rash of suicides at the Foxconn plant, and 300 workers recently threatened to jump off the roof over a safety and pay dispute.

In short, as one former Apple executive told the New York Times, “Most people would be really disturbed if they saw where their iPhone comes from.”

Mark Shields, a self-described member of the “cult of Mac,” started a petition on Change.org demanding Apple exert its influence on its suppliers to improve working conditions for the factory workers that make iPhones, iPads and other Apple products. Click here to sign Mark’s petition right now.

Apple knows it can play an important role in ensuring safe and fair working conditions for the workers at its suppliers, like Foxconn. In 2005, the company released a supplier code of conduct, and it performs hundreds of audits each year in China and around the world to confirm its suppliers are meeting the code’s expectations.

But that’s where Apple’s commitment falters: the number of supplier violations has held steady year to year and Apple hasn’t consistently publicly stated which suppliers have problems or dropped offending suppliers.

The bottom line, Apple executives admit, is that they’re not being forced to change.

One current executive told the New York Times that there’s a trade-off: “You can either manufacture in comfortable, worker-friendly factories,” he said, or you can “make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.”

That means public pressure is the only thing that can force Apple to ensure its suppliers treat workers humanely. If enough people sign Mark’s petition — and tell Apple they care more about human beings than they do about how fast the company can produce the next generation iPhone — the company could be convinced to make real change for the workers at Foxconn and other factories.

 Click here to sign Mark’s petition demanding Apple change the way it does business.

Thanks for being a change-maker,

– Amanda and the Change.org team

People are beginning to question Apple’s commitment to responsible behavior.  The company is making billions while the suffering of many workers is well documented.  Foxconn is a massive facility.  Foxconn employees over 230,000 workers.  Most workers make about $17 a day and one quarter live on site in company barracks.  The kitchen at Foxcoon serves 3 tons of pork and 13 tons of rice per day.  We have not seen anything like Foxconn in the U.S. since the early days of the industrial revolution when “company towns” were in vogue.  In a company town, employees lived in housing owned by the company and shopped at stores owned by the company.  In fact, some employees were paid in company scrip rather than actual money.  No need to actual money when everything a worker made was being paid to the company.  Scrip eliminated the need to have cash on hand and was common in the coal industry

Questions to Consider

1.  Is Foxconn a crisis for Apple at this point?  Justify your answer.

2.  How does this case illustrate the connection between issues management and crisis management?

3.  What is Apple’s responsibility for the workers at Foxconn who are part of their supply chain?

4.  Does Apple’s strong, favorable reputation help to insulate them from the problems at Foxconn?  Why or why not?

5.  How would rate the ethics of Apple’s initial report disclosing their supply chain problems and why would you assign it that rating?

6.  How would you evaluate the effectiveness of the CEO’s defense of Apple?  What criteria did you apply to reach your conclusions?

7.  What else would you recommend Apple do to address the situation and why would those recommendations help?

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Cantaloupe Crisis to Linger: Incubation and Litigation

September 29, 2011

It would seem quick to follow up on the cantaloupe post from yesterday but there are still some additional points to consider and information continues to roll in about the crisis.  It is odd for listeria to be found in a fruit, in fact it is the first ever listeria outbreak associated with cantaloupe.  Listeria is associated with processed meat, cheese, and milk.  Listeria can take up to two months to incubate.  That means more cases, and possible deaths, can keep appearing for weeks.  Each new case has the potential to extend the crisis and traditional and social media keep reporting on the events.

Jensen Farms remains at the center of the crisis as their cantaloupe are the cause of the outbreak.  However, there are gaps in the information about where the infected cantaloupe had been shipped.  Consider the following news item:

“Neither the government nor Jensen Farms has supplied a list of retailers who may have sold the fruit. Officials say consumers should ask retailers about the origins of their cantaloupe. If they still aren’t sure, they should get rid of it.

Jensen Farms of Holly, Colo. says it shipped cantaloupes to 25 states, though the FDA has said it may be more, and illnesses have been discovered in several states that were not on the shipping list. A spokeswoman for Jensen Farms said the company’s product is often sold and resold, so they do not always know where it went.

The recalled cantaloupes may be labeled ‘Colorado Grown,’ ‘’Distributed by Frontera Produce,’ ‘’Jensenfarms.com’ or ‘Sweet Rocky Fords.’ Not all of the recalled cantaloupes are labeled with a sticker, the FDA said. The company said it shipped out more than 300,000 cases of cantaloupes that contained five to 15 melons, meaning the recall involved 1.5 million to 4.5 million pieces of fruit.”

Officials are still working to track down the cause of the outbreak.  As one news story noted:

“Government investigators are continuing to search for the root cause of the outbreak, examining the possibility of animal or water contamination as well as the farm’s harvesting practices.”

Doubt will linger about the product’s safety until the root cause can be found.  Until a cause is found, no corrective actions can be taken that will reassure customers that the same event will not be repeated. 

Uncertainty is a part of crises but no identified cause coupled with no clear list of retailers generates great uncertainty for customers.  This uncertainty is captured the following comment from the CDC:

“If it’s not Jensen Farms, it’s OK to eat,” said Thomas Frieden, director of the CDC. “But if you can’t confirm it’s not Jensen Farms, then it’s best to throw it out.”

The uncertainty creates problems for all cantaloupe growers.  People become fearful of the product and avoid all cantaloupe.  Such was the situation in 1991 when Texas cantaloupe was associated with a salmonella outbreak.  California cantaloupe growers experienced a drop in sales too as customers just new “cantaloupe” was dangerous and was not differentiating between Texas and California cantaloupe.  In 1992, the Cantaloupe Advisory Board in California reduced its promotional spending believing a low profile would help people to forgive the health scare from 1991.  Other Colorado growers are concerned about the effects on their sales:

Local farmers are worried about cantaloupe sales after a Colorado farm says listeria has been found in some of its fruit. The new developments have prompted a recall of the fruit from Jensen Farms in melon-rich area of Rocky Ford.

Thursday’s recall most likely means a slow down in sales for local farmers, too. And, with melon season heating up for some on the Western Slope, it couldn’t have come at a worse time.

“It can be devastating if it’s in some of your major items,” Farmer Robert Helmer said of a produce recall.

Another factor that helps crises to linger are lawsuits.  Lawsuits can bring media attention and do involve financial costs.  More families are initiating lawsuits against Jensen Farms.  Here is sample of the media coverage from one lawsuit

Herbert Stevens of Littleton, Colo., bought half of a Jensen Farms cantaloupe wrapped in plastic at a local grocery store on Aug. 10 and the 84-year-old developed tremors on Aug. 22.

“On the 24th, he got really weak and was in a sitting position and couldn’t get up,” his daughter, Jeni Exley, told ABCNews.com.

Stevens’ wife called 911 and he was taken to a hospital, where doctors discovered he had a fever of 102.7. By the end of the weekend, he had been diagnosed with listeriosis.

Antibiotics destroyed the listeria in Stevens’ body, but he remains weak and it’s unclear when — if ever — he’ll be able to leave the long-term care facility where he’s been living for the past week.

“He is making some progress but still relies on a walker to walk and assistance with activities of daily living,” Exley said.

Prior to contracting the bacteria, Stevens was able to walk without assistance and was in good health. He often took trips abroad with his family, most recently to Sweden.

Right now, however, “He sleeps for most of the day,” said Exley. “This has played havoc with his whole body.”

 

The stories do generate sympathy for the victims given the deadly nature and effects of listeria.

Finally, the Food and Drug Adminstration said the situation is further evidence of teh need for the  Food Safety Modernization Act.

 

Questions to Consider

1.  What else could Jensen Farms do to improve on its crisis communication effort?

2.  How does this case illustrate the constraints that can limit an organization’s ability to respond effectively to a crisis?

3.  What can other producers do to limit the collateral damage from this crisis?

4.  Why does the CDC play such a pivotal role in these types of food borne illness crises?

5.  Jensen’s is considered a family farm.  Why might that be an asset in this crisis?

6.  Does Jensen Farms need to do more to address the lack of information about retailers?  Why or why not?

7.  Is this an appropriate time to push the Food Safety Modernazation Act?  Why or why not?

 


Fear the Energy Drinks? New Evidence of the Dangers of Energy Drinks

February 16, 2011

It should be no surprise to anyone that too much energy drink consumption is bad for a person, especially children.  But how much is too much?  And how is bad for a person?  It is not uncommon for young people to drink more than one energy drink to stay up to engage in a variety of activities from gaming to studying.  The issue becomes the risks posed from the energy drinks.  The problem centers on the high amounts of caffeine and other ingredients that provide “energy.”  In reality, those ingredients heart palpitations, seizures, strokes, and even death.  Caffeine is the central ingredient.  Energy drinks typical contains  four to five the amount found in sodas.  Physicians now argue that drinking four or five energy drinks per day can be dangerous for children. 

Here is a summary of a recent medical study

Energy drinks may pose a risk for serious adverse health effects in some children, especially those with diabetes, seizures, cardiac abnormalities or mood and behavior disorders.

A new study, “Health Effects of Energy Drinks on Children, Adolescents, and Young Adults,” in the March issue of Pediatrics (published online Feb. 14), determined that energy drinks have no therapeutic benefit to children, and both the known and unknown properties of the ingredients, combined with reports of toxicity, may put some children at risk for adverse health events.

Youth account for half of the energy drink market, and according to surveys, 30 percent to 50 percent of adolescents report consuming energy drinks. Typically, energy drinks contain high levels of stimulants such as caffeine, taurine, and guarana, and safe consumption levels have not been established for most adolescents. Because energy drinks are frequently marketed to athletes and at-risk young adults, it is important for pediatric health care providers to screen for heavy use both alone and with alcohol, and to educate families and children at-risk for energy drink overdose, which can result in seizures, stroke and even sudden death.

Here is the name an link to the full report:  ‘Health Effects of Energy Drinks on Children, Adolescents, and Young Adults’

This is not an overreaction from a group of concerned parents or scare tactics from a group that does not like energy drinks.  This is a scientifically based study by trained medical professionals trying to understand the potential risk of a product.  Nor is the concern sudden.  In 2010, The American Association of Poison Control Centers began tracking energy drink overdoses and side effects nationwide.  Their findings:  677 cases occurred from October through December of 2010 and 331 have been reported this year (Feb of 2010).  One issue that Poison Control has is the failure of many companies to disclose the amount of caffeine in drinks.  In fact, the Poison Control Centers began issuing warnings about energy drinks three years ago.

If young people are a key target market, we would expect concern from the beverage industry about this new report.  Here is a statement from Maureen Storey, senior vice president of science policy at the American Beverage Association, an industry group, said the report “does nothing more than perpetuate misinformation” about energy drinks. The Association added: 

“Like all foods, beverages and supplements sold in the US, energy drinks and their ingredients are regulated by the US Food and Drug Administration,” the ABA said. “When it comes to caffeine, it’s important to put the facts in perspective. Most mainstream energy drinks actually contain about half the caffeine of a similar size cup of coffeehouse coffee. In fact, young adults getting coffee from popular coffeehouses are getting about twice as much caffeine as they would from a similar size energy drink.”

Here is more from the Association’s news release

“It’s unfortunate that the authors of this article would attempt to lump all energy drinks together in a rhetorical attack when the facts of their review clearly distinguishes the mainstream responsible players from novelty companies seeking attention and increased sales based solely on extreme names and caffeine content.

Their review confirms that the amount of caffeine in mainstream energy drinks is, in fact, moderate. As a comparison, energy drinks typically contain half the caffeine found in regular coffeehouse coffee. Specifically, a 16-ounce regular blend coffee at a popular coffeehouse contains 320 mg of caffeine, while a comparable size mainstream energy drink contains about 160 mg (see graphic here: http://www.ameribev.org/industry-issues/healthy-balanced-diet/beverage-ingredients/caffeine/fact-sheets/download.aspx?id=192). So those suggesting that energy drinks should require warning labels need to be aware of the slippery slope this would create: to be consistent, products at coffeehouses also would require such unnecessary labeling.

Furthermore, our companies market their energy drink products responsibly. It’s unhelpful to the public that the authors would combine certain extreme products with illicit or suggestive names with other more mainstream energy drinks in an effort to sensationalize and demonize the entire product category and gain exposure for their work.

Questions to Consider

1.  How would you evaluate the credibility of the study?  Why does credibility matter in issues management?

2.  How ethical is the charge of misinformation made by the American Beverage Association?  Explain your evaluation.

3.  Is it fair to say the reaction from the American Beverage Association was predictable?  Why or why not?

4.  Should the energy drink makers be worried about new regulations appearing as a result of this study?  Why or why not?

5.  How would you evaluate the American Beverage Association’s reaction from an issues management perspective?  From a crisis management perspective?

6.  How would you evaluate the risk this report posses to the energy drink makers?  How did you arrive at that evaluation?


Fake Twitter Accounts and Tweets: New Astroturfing and Ethical Assault

November 7, 2010

Ethics is a serious concern for any public communicator, that includes public relations.  One problem with social media has been its loose ethics and ease of manipulation.  Consider how “citizen journalists” (a terrible phrase) print whatever they want in blogs and micro-blogs because they have no real ethical code or training in the responsibilities of being a public communicator.  Add to this the view that almost anything goes on the Internet, the last space for truly free behavior and we have a deadly combination for ethics.  Would the average person think it was okay to create a fake journalist and publish articles under his or her name?  We are hoping the answer is “No!”  The same cannot be said for the Internet.

Fake Twitter accounts are as easy to create as a real one.  It is hard to verify the biographical information on the sire and few people ever check that information.  A few clicks and fake Twitter persona is born.  Some fake accounts are for fun and people make humorous posts.  The point is entertainment, not deception.  The problem is when the information in the fake tweets are used to deceive people.  Two recent examples can illustrate the problem.

Political communication and public relations have a concept known as astroturfing.  Astroturfing is when fake public concern is generated.  It appears as though citizens are outraged but it is really the work of front groups or public relations people.  The idea is the outrage is used to support policy options (issues management) or to build support for a politician (political application).  Researchers at Indiana University created the Truthyproject (http://truthy.indiana.edu/).  The idea was to expose astroturfing in Twitter.  Here is how they describe themselves:

“Truthy is a research project that helps you understand how memes spread online. With our images and statistics, you can help identify misuse of Twitter. Our first application was the study of astroturf campaigns in elections. Now we’re extending our focus to the diffusion of all types of information in social media.”

Their research uses network analysis to find suspicious memes and reveal the astroturfing.  One sign is a few accounts generating a lot of messages including retweets of one another.  Here is a specific case:

“Menczer says the research group uncovered a number of accounts sending out duplicate messages and also retweeting messages from the same few accounts in a closely connected network. For instance, two since-closed accounts, called @PeaceKaren_25 and @HopeMarie_25, sent out 20,000 similar tweets, most of them linking to, or promoting, the House minority leader John Boehner’s website, gopleader.gov.”  http://www.technologyreview.com/computing/26666/?p1=A3&a=f

In another case, a staff member of a Canadian politician created a fake twitter account.  The original intent was to use the account to help get an incriminating audio tape about the politician.  Once that was accomplished, the account continued.  The Tweets claimed to support the opponent but were designed to support the other candidate.  One Tweet read:  “I can see Ford’s appeal. I don’t agree with him on everything, but the man speaks the truth. George needs to improve on that.” http://socialmediatoday.com/davefleet/227540/unethical-social-media-its-worst-rob-ford-s-fake-twitter-account

If you want to see more about the story and the Tweets visit http://torontoist.com/2010/10/rob_fords_team_created_a_fake_twitter_account_and_this_is_it.php.  This second example is political communication.  However, the concern over Twitter being used for astroturfing has applications to public relations so we must think about the ethical concerns over this practice.  In these cases, public relations can think and learn from the mistakes of those outside of public relations.

Question to Consider

1.  Why is it unethical to use any fake Twitter account in public relations?

2.  What makes the use of fake Twitter accounts a type of astroturfing and front group?

3.  If you were to create some basic ethical guidelines for using Twitter accounts in public relations, what would they be?

4.  Why do you think people see different rules applied to social media verses traditional media?

5.  On a related note, what are the ethical implications for paying someone to Tweet in support of an organization? 

6.  How do citizen journalists differ from real journalists?


Danger of Sex Selling: Anti-Booth Babe Movement

July 22, 2010

ComicCon 2010 is being followed from the booth babe controversy created last year.  In 2009, EA Sports held a contest to encourage men to “commit acts of lust.”  That raised issues of the contest increase the abuse of booth babes.  Booth babes is a name given to women who work at convention booths.  At ComicCon they wear scanty outfits to help attract visitors to the booth.  Gizmodo filmed a documentary that documents how perverse attendees mistreat the booth babes.  As one booth babe noted,  “It can get a bit overwhelming and there’s always that underlying fear that someone will cross the line. I have been very fortunate, however, and have not dealt with any overzealous fans thus far. I feel comfortable in all of my costumes. Wearing revealing clothing doesn’t bother me.” http://news.yahoo.com/s/newsarama/comicconwrestleswithboothbabecontroversy

Game developer Agetec has launched and anti-booth babe movement with a web site, http://www.antiboothbabes.com/.  Their point is the focus should be on the games not on the women.  The campaign began at the E3 convention http://ds.kombo.com/article.php?artid=1951. Another issue is whether or not the revealing costumes are appropriate for the younger attendees.  ComicCon banned the erotic models from the Suicide Girls.  Suicide Girls is a web site that posts softcore pictures of goth, punk, and indie-style women. 

The counter view is that the women are part of marketing and it is all harmless fun.  The problem is not with the booth babes but with overzealous fans.  As one booth observed, “It’s just a great social experience to do this sort of work.  Most of these events are pretty easy to do so long as you’re personable, and many are handing out free samples, which tends to put a smile on people’s faces… You might have to be willing to stand out in the hot sun, or put on a costume, but if you can handle that, then it’s the best gig around for someone who likes to be social and bubbly. And you never know who’s going to show up.”

Still purest wonder what is happening to what should draw people to the booths-merchandise.  “My biggest issue with booth babes is that all the parties involved end up feeling dirty,” Ian Cooper, a tech blogger for CodeBetter.com, “Male customers feel cheapened because the sellers assume they purchase based off some illusory promise of sex. And the ‘booth babes’ end up dirty from using sex to sell in the first place. Appeal to me through the quality of your product, that’s what I am buying – not your booth babe.” http://news.yahoo.com/s/newsarama/comicconwrestleswithboothbabecontroversy

Questions to Consider

  1. Do you consider booth babes a reputational threat to ComicCon?  Explain your answer.
  2. What are the ethical implications of a company using booth babes?
  3. What recommendations would you make to ComicCon about developing guidelines for booth babe costuming and attendee conduct?
  4. What does Agetec have to gain from creating the anti-booth babe movement?
  5. What are the risks and rewards of using booth babes?  Consider that over 40% of ComicCon attendees are women.
  6. What role might PR play in the booth babe issue?

Happy or Unhappy Meals? The Conflict between CSPI and McDonald’s

July 9, 2010

This month the Center for Science in the Public Interest (CSPI) announced it would sue McDonald’s over the use of toys in Happy Meals.  The announcement was part of a letter sent to McDonald’s demanding it change its ways.  The toys are said to lure children into a life of unhealthy eating and even obesity.  The toys are deemed “unfair” and “deceptive” advertising that is illegal in many states. 

“McDonald’s is the stranger in the playground handing out candy to children,” said CSPI litigation director Stephen Gardner. “McDonald’s use of toys undercuts parental authority and exploits young children’s developmental immaturity—all this to induce children to prefer foods that may harm their health. It’s a creepy and predatory practice that warrants an injunction.”  http://www.cspinet.org/new/201006221.html

Happy Meal toys have been part of the Beanie Baby fad and have had links to numerous movies, television shows, and cartoons.  The list of toys include Star Wars, Hello Kitty, Spiderman, and Shrek.  These are powerful draws for small children and even some adults.  However, adults should be able to make informed choices about nutrition and health but small children cannot.  Parents argue that cannot ignore the nag factor and give in to demands from their small children for unhealthy Happy Meals.  Even with some healthy options, the Happy Meals are generally unhealthy with fat, sugar, and salt.  In essence, CSPI contents that MacDonald’s socially irresponsible.

McDonald’s waited a few days then responded strongly to the CSPI threatened lawsuit.  McDonald’s CEO Jim Skinner said “Happy Meals are a fun treat, with right-sized, quality food choices.”  The message was part of a letter written in response to the letter from the CSPI.  McDonald’s maintains that it offers choices to parents including healthy options such as apples and milk. 

“’Walt Riker, McDonald’s vice president of global media relations, said CSPI’s letter crossed the line with their “unprofessional rhetoric and insulting tone.’ The Happy Meal, Riker said, is a popular and positive experience that can be a part of a healthy meal. ‘There are plenty of options and combinations that would fit within a daily diet,’ Riker said, adding that in the U.S., the company advertises a Happy Meal with white-meat nuggets, low-fat milk and apple dippers.” http://chicagobreakingbusiness.com/2010/07/mcdonalds-ceo-stands-up-for-happy-meal-toys.html

As is common, social media has become a part of this lawsuit/health debate.  Angry stakeholders have posted negative comments to the CSPI Facebook page about the lawsuit.  Here is a sample post:

“I do agree with the mission of CSPI, to make our food safer and more nutritious. However, I do not agree with this lawsuit. It is still the job of the parents, not an agency, to protect their children and make healthly choices on their behalf, and to lead them into the future with the tools necessary to make their own choices on nutrition.”  http://www.facebook.com/pages/Center-for-Science-in-the-Public-Interest-CSPI/240937060405?ref=search

There is a concern that the CSPI is going too far and that the lawsuit is frivolous.  People feel there are more important issues for the CSPI to address and that the Happy Meals are really a personal issue for parents and should not involve the courts or government regulation.  http://www.marketwire.com/press-release/Parents-Debate-Center-Science-Public-Interests-Facebook-Page-About-McDonalds-Lawsuit-1282901.htm

Questions to Consider

  1. Are Happy Meals unfairly attracting children to unhealthy food?  Defend your answer.
  2. What merit is there in the CPSI’s actions even if you think they go too far?
  3. How effective do you think the McDonald’s defense is for the issue?  Justify your answer.
  4. What makes this case a public relations concern? 
  5. What does McDonald’s stand to lose in this case?
  6. How is social media helping or hurting McDonald’s in this case?
  7. What are the ethical concerns in this case?

The Unhappy Meal: Santa Clara looks to ban unhealthy children’s meals with toys

April 28, 2010

An issues that been appearing off and on in the news for years has been childhood obesity in the U.S.  Kids in the U.S. eat unhealthy foods and generally weigh too much resulting in health problems.  The argument is that fast food restaurants target children with the marketing thereby encouraging them to eat unhealthy food.  Fast food restaurants spent over $1.6 billion in 2006 to target children.  One ploy is to put toys in the meals designed for children.  Children want the toys, children nag their parents, parents buy the meals, children eat unhealthy meal, and children become unhealthy.  We can argue with the links in this chain of logic but it is the fundamental argument in this case.  The Santa Clara County Board of Supervisors considered a proposal that “the proposal would forbid the inclusion of a toy in any restaurant meal that has more than 485 calories, more than 600 mg of salt or high amounts of sugar or fat. In the case of McDonald’s, the limits would include all of the chain’s Happy Meals — even those that include apple sticks instead of French fries” (latimes.com/business/la-fi-happy-meals-20100427,0,6290206.story).

The idea is that the proposal would pressure fast food restaurants into creating more nutritious meal options for children.  A key concern is all the sodium, sugar, and fat that can be found in existing children’s meals.  Here is summary of the proposal from its creator:

“Ken Yeager, the Santa Clara County supervisor who is behind the effort, says the toys in kids’ meals are contributing to America’s obesity epidemic by encouraging children to eat unhealthful, fattening foods.  ‘People ask why I want to take toys out of the hands of children,’ said Yeager, who is president of the Santa Clara County Board of Supervisors. “But we now know that 70% of the kids that are overweight or obese will be overweight or obese as adults. Why would we want to burden anybody with a lifetime of chronic illness?’” (latimes.com/business/la-fi-happy-meals-20100427,0,6290206.story).

Every issue has at least two sides.  So who is arguing for unhealthy food that will children obese?  The answer is the California Restaurant Association (CRA) who see the issue differently.  Here is how their interpretation of the issue:

“’Ultimately, parents decide what their children eat and whether a meal includes a toy or not – that is the role of a parent,’ the CRA’s President + CEO Jot Condie said. ‘Based on our survey of the county’s residents, parents prefer to continue making those decisions, as opposed to following Supervisor Yeager’s proposal that would take that choice away. Saving us from our kids is overreaching. Most parents can resist their children’s pressure to get a toy. The county government does not need to serve as the parent of the parents.’

Most restaurants offer healthy options, such as fruit, sandwiches, milk, juice and water with kids’ meals. The variety of offerings continues to grow, but ultimately consumers want a choice in what items they can select for a kids’ meal when dining at a restaurant. Seventy-three percent of Santa Clara County residents agree that they should have the option of purchasing a meal at a restaurant that includes a toy or a gift.

“The restaurant industry works with policymakers every day to craft serious, comprehensive solutions to public health issues, including childhood obesity,” Condie said (http://www.calrest.org/go/CRA/news-events/newsroom/poll-santa-clara-county-residents-against-toy-ban/).

The CRA took their message to the people of Santa Clara through newspaper advertisements.  The CRA also conducted a poll and found that 80% of residents felt lawmakers should not be involved with this issue.  The poll had a sampling error no more than 4.1 percentage points with a 95 percent level of confidence.  However, we do not know the exact wording of the question in the survey used for the poll (http://www.calrest.org/go/CRA/news-events/newsroom/poll-santa-clara-county-residents-against-toy-ban/). 

While in isolation the toy ban does not seem like much of an issue.  It is a limited proposal covering a very small geographic area.  However, the larger issue of childhood obesity in the U.S. is a serious concern.  Moreover, the childhood obesity issue is repeatedly being linked to fast food restaurants so there is reason for the restaurant industry to be concerned.

Questions to Consider

  1.  How viable is the CSR response that food choice is the responsibility of parents?
  2. How do the marketing actions of restaurants undercut parental decision making about what their children eat?
  3. What are the ethical considerations of marketing to children?  Should restaurants adopt a code governing marketing to children that covers the healthiness of the food being promoted?
  4. Which side of the issue would you support and why?
  5. How was each side using public relations in this issue management effort?
  6. What is the benefit of the CRA managing the issue rather than individual fast food restaurants?
  7. How might the issue of childhood obesity be a serious threat to the reputations and sales of fast food restaurants?

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