McDonald’s; one of the biggest corporate disasters?

During the 1990’s, a group of 6 activists met together to write a booklet entitled “What’s wrong with McDonald’s”. The publication was full of allegations against the way McDonald’s was handling the different areas of its business, and the effect they were having on the environment. For example; they sell unhealthy food, exploit their workforce and are cruel to animals.

It is clear that a booklet outlining the flaws in McDonald’s would severely damage their reputation, that is, if the whole world became aware of the booklet. McDonald’s decided to sue the activists, of which they all pulled out, apart from 2, Mr Morris and Miss Steel. This could be seen as one of the biggest mistakes the corporate world has seen, a huge error of judgement. Firstly, the case took 7 years to be resolved (the longest in British history) which enabled the book to be translated into 26 languages. Secondly, McDonald’s had to pay in excess of £100 Million in legal fees and even though they won the case, they did not receive any compensation as Morris and Steel did not have any money. Finally, the reason they won the case is because two of the facts in the booklet were found to be untrue, one claiming that McDonald’s was at least partly responsible for destroying the South American rain-forests, which was clearly far-fetched but the fact that the rest of the information was found to be true really harmed McDonald’s.

The fact of the matter is, even though they won the case, the only winners here are the activists. If they had just left the booklet to be distributed around London (where it was created and launched) it is likely that it wouldn’t of had much reach, but instead it was made known to the world due to incredibly bad judgement.

It just goes to show the potential power of a few people and how determination goes along way.

In business terms, this was a disaster for their reputation and brand perception, and even though they are still the 7th biggest brand in the world (Interbrand 2012) it shows that even the biggest corporate and worldwide brand can have its weaknesses. McDonald’s have come along way since this disaster but the blunder is unlikely to be forgotten anytime soon.

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