1. Ethical Corporation • July-August 2010 Strategy and management 39
DREAMSTIME.COM/ARTAHA
McLibel
Reputation damage writ large
By Judy Kuszewski
McDonald’s decision to sue two activists in the 1990s meant that all its business practices were
laid bare in court, which changed the company for ever
:]]Z 5H:”K, M[é”@ d(] 36H-6%K :%@ D…3é: P:”(H bé:%@6%Q 56K3:“HK [O j”” 968H, $)HéZ OH? ]H[]”H
I d[8F[K :éH 3UH 8:6% 8HKK:QHK [% ?:”“6%Q
6%3[ :%Z [O 57,[%:”@’K 32,000 éHK3:(é:%3K ?[é”@-
?[(”@ %[? “%[? :F[(3 3UH 7[%3H%3K [O 3U:3
]:8]U”H3 6O 57,[%:”@’K U:@%’3 3:“H% 3UH 8:33Hé 3[
“The most
expensive and
?6@H. I[?H)Hé, :”” 8:%%Hé [O 7[%3é[)HéK6HK ! 7[(é3ú. disastrous public
H)HéZ3U6%Q Oé[8 3UH [FHK63Z 7é6K6K :%@ $K(]HéK6;H 9Ué[(QU 3UH 1980K, :””HQ:36[%K [O 3UH 7[8]:%Z’K
8Hú @HF:3H, 3Ué[(QU 3[ :””HQ:36[%K [O ”633Hé 7éH:36[%, 7[8]”6763Z 6% é:6%O[éHK3 @HK3é(736[% ?HéH :6éH@ FZ
relations exercise
H8]”[ZHH 86K3éH:38H%3 :%@ O:73[éZ O:é86%Q ! U:)H 3UH bbd2 –:3(éH ]é[Qé:88H, :K ?H”” :K :]]H:é6%Q ever mounted
@[QQH@ 3UH Q[”@H% :é7UHK [)Hé 3UH @H7:@HK. 6% :é367”HK 6% 3UH v%@H]H%@H%3 %H?K]:]Hé ’K by a multinational
b(3 ]HéU:]K %[%H [O 3UHKH 7[%3é[)HéK6HK U:K 8:Q:;6%H :%@ 6% 3UH N(%@:Z d[ééHK][%@H%3.
FHH% 8[éH @:8:Q6%Q 3U:% 3UH %[3[é6[(K 5716FH” v% :”” [O 3UHKH 7:KHK (:%@ [3UHéK), 3UH 7[8]:%Z’K company”
7:KH [O 3UH 1990K ! @(FFH@ FZ 3UH 0S’K dU:%%H” 4 éHK][%KH ?:K 3[ U:)H 63K ”:? O6é8 KH%@ : @H8:%@ O[é Channel 4 News
%H?K :K $3UH 8[K3 H…]H%K6)H :%@ @6K:K3é[(K ](F”67 :% :][”[QZ :%@ éH3é:736[% [O 3UH :””HQ:36[%K, [é O:7H
éH”:36[%K H…Hé76KH H)Hé 8[(%3H@ FZ : 8(”36%:36[%:” 3UH 3UéH:3 [O : @HO:8:36[% ”:?K(63 (%@Hé bé63:6%’K
7[8]:%Zú. v3 6K : 3:”H [O ,:)6@ :%@ k[”6:3U, :% O:8[(K”Z K3é673 ”6FH” ”:?K, ?U67U éHR(6éH @HOH%@:%3K
(%(K(:” ”HQ:” 7”68:3H, zZééU67 )673[éZ :%@ (%6%- 3[ ]é[)H 3UH 3é(3U [O 3UH6é :””HQ:36[%K. v% 3UH 7:KHK [O
3H%@H@ 7[%KHR(H%7HK. dU:%%H” 4, 3UH bbd :%@ 8:%Z [3UHéK, 3UH éH76]6H%3K
9UH 7:KH 6%)[”)HK IH”H% N3HH” :%@ ,:)H 5[éé6K ! [O 3UH ”HQ:” 3UéH:3K Q:)H 6% 3[ 57,[%:”@’K @H8:%@K,
3UH K[-7:””H@ 5716FH” 9?[ ! F[3U :736)6K3K 6%)[”)H@ é:3UHé 3U:% O:7H 3UH H…]H%KH :%@ (%7Hé3:6%3Z [O
?63U : 7:8]:6Q%6%Q 7[””H736)H “%[?% :K 1[%@[% ]éH):6”6%Q [% : ”6FH” 7:KH 6% : bé636KU 7[(é3.
kéHH%]H:7H (%[ éH”:36[% 3[ kéHH%]H:7H v%3Hé%:-
36[%:”) 6% 3UH 1980K. Deforestation suggestion
N3HH” :%@ 5[éé6K ?HéH 3:“H% 3[ 7[(é3 FZ 3UH j”K[ 7:(QU3 (] 6% 3UH 7[%3é[)HéKZ ?HéH x[U%
F(éQHé 7U:6% O[é 3UH6é é[”H 6% ](F”6KU6%Q : O:73 KUHH3 D”“6%Q3[% :%@ x(”6: I:6”HK, 7[-O[(%@HéK [O 1[%@[%-
! MU:3’K Mé[%Q M63U 57,[%:”@’K ! 6% 1986 3U:3 F:KH@ 7[%K(”3:%3K N(K3:6%jF6”63Z. v% 1987 D”“6%Q3[%
”H)H””H@ : ?6@H é:%QH [O :””HQ:36[%K :Q:6%K3 3UH :%@ I:6”HK 7[-:(3U[éH@ 9UH kéHH% d[%K(8Hé
7[8]:%Z. v3 6%7”(@H@ 7”:68K [O ]é[8[36%Q k(6@H, 3UH F6F”H [O H%)6é[%8H%3:” 7[%K(8Hé6K8,
(%UH:”3UZ O[[@, :%68:” 7é(H”3Z, :%36-(%6[% :736)63Z, ?U67U 6%7”(@H@ : 8H%36[% [O 57,[%:”@’K FHHO
F:@ ?[é“6%Q 7[%@636[%K :%@ 7[%3é6F(36%Q 3[ K3:é):- U:)6%Q FHH% :77(KH@ [O 6%)[”)H8H%3 6% 3é[]67:”
36[% 6% 3UH @H)H”[]6%Q ?[é”@. @HO[éHK3:36[%.
5[K3 @6K3(éF6%Q [O :”” 3[ 57,[%:”@’K ?:K 3UH 9U6K ]é[8]3H@ 57,[%:”@’K 3[ 3UéH:3H% :% This is the latest in our series on
7”:68 3U:3 3UH 7[8]:%Z’K FHHO ?:K 68]”67:3H@ 6% ”[KK 6%V(%736[% 3[ éH8[)H 3UH F[[“ Oé[8 K:”H. D”“6%Q3[% classic corporate responsibility
[O 3é[]67:” é:6%O[éHK3. K:ZK: $v (%@HéK3:%@ 57,[%:”@’K @6@%’3 6%636:””Z stories. Next issue we will focus
I[?H)Hé, :K 5:33 I:6Q :éQ(HK 6% U6K 2003 F[[“ %[367H 3UH F[[“ 7[86%Q [(3, F(3 %[367H@ 6%7éH:K6%Q on blood diamonds and the rise
bé:%@ ’:6”(éHK: 9UH 9é(3U jF[(3 3UH 100 b6QQHK3 %(8FHéK [O Z[(%Q ]H[]”H 7[86%Q 6%3[ éHK3:(é:%3K of the Kimberly Process.

2. 40 Strategy and management Ethical Corporation • July-August 2010
6KK(HK. v ?:K%’3 3[3:””Z ]HéK(:@H@, F(3 :3 ”H:K3 3UHZ’@
The McLibel verdict 8:@H 3UH HOO[é3.ú
The judge in the case found the McLibel Two had proved some of their allegations, and failed to prove others.
9UH 3H%@H%7Z [O 8[K3 éH76]6H%3K [O 57,[%:”@’K
Proved: Not Proved: ”HQ:” 3UéH:3K 3[ :7R(6HK7H 7éH:3H@ : 7Hé3:6%
• Child exploitation via company advertising • Complicity in rainforest destruction 8[8H%3(8 3U:3 O:)[(éH@ 57,[%:”@’K 6% O(3(éH
”HQ:” F:33”HK. ’6[%: ,[%K[% ?é[3H 6% 1HQ:” v%3686@:-
• Falsely advertising McDonald’s food as “nutritious” • McDonald’s food causes cancer and heart disease
36[%, ](F”6KUH@ 6% 2000: $bZ 6%)[“6%Q 3UH ”:? 6%
• Cruelty to animals • Implicated in starvation in the developing world K(]][é3 [O 63K éH](3:36[%, 57,[%:”@’K U:K FHH% :F”H
• McDonald’s food represents a health risk • Bad working conditions 3[ 7éH:3H :% 68]éHKK6[% 3U:3 :%Z 7é63676K8 3U:3 6K
to long-term customers ?63U@é:?% :K : éHK(”3 [O 3UH 3UéH:3 [O : ”6FH” :736[%
• McDonald’s is “strongly antipathetic” 8(K3 6% K[8H ?:Z U:)H FHH% 2(%”:?O(”’.ú
to unions and pay low wages MU:3 KH3 N3HH” :%@ 5[éé6K :]:é3 ?:K 3UH6é éHO(K:”
3[ @[ ”6“H?6KH, H)H% ?63U %[ ”HQ:” éH]éHKH%3:36[%
:%@ %[ 8H:%K 3[ K(]][é3 3UH8KH”)HK 3Ué[(QU 3UH
:%@ :K“6%Q R(HK36[%K.ú 9UH ”HQ:” :@)67H ?:K %[3 ”[%Q ]é[7HKK.
H%7[(é:Q6%Q. IH K:ZK: $MH ?HéH 3[”@ FZ : )HéZ
KH%6[é ”:?ZHé 6% 1[%@[% ?H ?HéH )HéZ (%”6“H”Z 3[ Writs blitz
]éH):6” ! (%”HKK, 3U:3 6K, ?H ?:%3H@ 3[ 2]”:Z ][“Hé’. j%@ ”[%Q 6%@HH@ 63 ?:K. Mé63K ?HéH KHé)H@ 6%
MH ”[[“H@ :3 3UH ”HQ:” K63(:36[% :%@ OH”3, 6% O:73, ?H NH]3H8FHé 1990, 3UH 7:KH ?H%3 3[ 3é6:” 6% x(”Z 1994
7[(”@ ]éH):6”.ú :%@ H%@H@ 6% ,H7H8FHé 1996, ?63U 3UH 7[(é3
MUH% 57,[%:”@’K ”H:%H@ [% D”“6%Q3[% :%@ V(@Q8H%3 U:%@H@ @[?% 6% x(%H 1997. jO3Hé [)Hé 100
I:6”HK 3[ éH3é:73 3UH é:6%O[éHK3 :””HQ:36[%, 3UH ]:6é ?63%HKKHK, :%@ 86””6[%K [O ][(%@K K]H%3 FZ F[3U 3UH
](3 O[é?:é@ 3?[ 7[%@636[%K. ’6éK3 3U:3 57,[%:”@’K bé636KU 7[(é3K :%@ 57,[%:”@’K ! 3UH 7[8]:%Z’K
68]”H8H%3 : ?H””-3U[(QU3-[(3 H%)6é[%8H%3:” 7[K3K ?HéH HK368:3H@ :3 4108 ! 3UH 5716FH” 3é6:” ?:K
][”67Z :7é[KK 63K []Hé:36[%K. j%@ KH7[%@ 3U:3 3UH 3UH ”[%QHK3 3é6:” [O :%Z “6%@ 6% D%Q”6KU ”HQ:” U6K3[éZ.
7[8]:%Z @H)H”[] : 8H:%K 3[ FH :F”H 3[ 3H””, 3Ué[(QU MUH% 63 7:8H, 3UH V(@QH’K )Hé@673 ?:K K[8H3U6%Q
3UH K(]]”Z 7U:6%, ?UH3UHé 63K 8H:3 @6@ [é @6@ %[3 [O : )673[éZ O[é 57,[%:”@’K. x(@QH L[@QHé bH””
7[8H Oé[8 :éH:K 3U:3 U:@ éH7H%3”Z FHH% O[éHK3H@. O[(%@ 3UH @HOH%@:%3K U:@ %[3 ]é[)H@ K[8H [O 3UH
D”“6%Q3[% :%@ I:6”HK H)H%3(:””Z 8H3 ?63U :””HQ:36[%K 6% 3UH ]:8]U”H3 ! 6%7”(@6%Q 3U[KH
57,[%:”@’K, F(3 FHO[éH 3UH6é 8HH36%Q, D”“6%Q3[% éH”:36%Q 3[ é:6%O[éHK3 @HK3é(736[% ! F(3 U:@ ]é[)H@
K:ZK, 3UH 7[8]:%Z KH%3 63K @6éH73[é [O ](é7U:K6%Q [3UHéK. N3HH” :%@ 5[éé6K ?HéH [é@HéH@ 3[ ]:Z 3UH
K(]]”Z :é[(%@ 7é6367:” 8:é“H3K 3[ QH3 K?[é% :OO6- 7[8]:%Z 460,000 6% @:8:QHK, ”:3Hé éH@(7H@ 3[
@:)63K Oé[8 “HZ K(]]”6HéK. $9UHZ KU[?H@ (K 3UHZ 440,000.
U:@ :% H%)6é[%8H%3 ][”67Z, 3U[(QU 63 ”[[“H@ b(3 3UH )673[éZ ?:K U[””[?. zHéU:]K 8:Q%:%6-
K3637UH@ 3[QH3UHé. 9UHZ @6@ 3éZ 3[ KU[? 3U:3 8[(K”Z, 3UH 7[8]:%Z K3:3H@ 63 ?[(”@ %[3 KHH“ 3[
O[””[?6%Q 3UH 7[%3é[)HéKZ 3UHZ’@ ”[[“H@ :3 3UH 7[””H73 3UH 8[%HZ ! F(3 6% 3é(3U, 3UH @:8:QH @[%H 3[
“McDonald’s
DREAMSTIME.COM/PAULPRESCOTT
showed us
they had an
environment
policy, though
it looked stitched
together”
John Elkington
Global icons need global sustainability

3. Ethical Corporation • July-August 2010 Strategy and management 41
REUTERS/KIERAN DOHERTY
57,[%:”@’K éH](3:36[% ?:K :”éH:@Z K[ [)Hé-
?UH”86%Q 3U:3 3[ 7U:KH : ]:6é [O ]H%%6”HKK,
?H””-8H:%6%Q :736)6K3K [)Hé K(7U 8[@HK3 @:8:QHK
?[(”@ U:)H U(é3 3UH 7[8]:%Z O:é O(é3UHé. j%@,
57,[%:”@’K ?:K %[3 :?:é@H@ 7[K3K, K[ U:@ 3[ 7[)Hé
63K 4108 ”HQ:” H…]H%KHK.
v% 3UH ]é[7HKK [O 3:“6%Q 3UH ]:6é 3[ 3é6:”,
57,[%:”@’K H%K(éH@ 3U:3 H)HéZ :””HQ:36[% :Q:6%K3
3UH 7[8]:%Z ?:K H…:86%H@ 6% 86%(3H @H3:6” 6%
[]H% 7[(é3. M63%HKK K3:3H8H%3K, @[7(8H%3:éZ
H)6@H%7H :%@ ”HQ:” :éQ(8H%3K ?HéH []H% 3[ 3UH
”6QU3 [O @:Z ! :%@ 3[ 3UH QH%Hé:” ](F”67 3Ué[(QU 3UH
8H@6: :%@ 3UH O:8[(K 57N][3”6QU3 ?HFK63H ! ”6“H
%H)Hé FHO[éH. v% :@@636[% 3[ U:)6%Q FHH% O[(%@ 3[
U:)H ]é[)H@ K[8H [O 3UH ]:8]U”H3’K :””HQ:36[%K,
3U6K éH](3:36[%:” @:8:QH Q:)H N3HH” :%@ 5[éé6K :
K(FK3:%36:” 8[é:” )673[éZ.
9UH 7:KH 6K : D(é[]H:% H…:8]”H [O 3UH K[-7:””H@
N”:]] (K3é:3HQ67 ”:?K(63 :Q:6%K3 ](F”67 ]:é3676]:36[%) Morris and Steel: made of stern stuff
]UH%[8H%[% ! ”:?K(63K @HK6Q%H@ 3[ KR(H”7U 7é636-
76K8 [O : 7[8]:%Z [é Q[)Hé%8H%3 :QH%7Z [% :% 9UH éHK(”36%Q 8[é:3[é6(8 [% j8:;[% K[Z: 6K K36”” 6%
6KK(H [O ](F”67 6%3HéHK3. 9é:@636[%:””Z, 3UH N”:]] K(63, ]”:7H.
:K :]]”6H@ 6% 3UH 0N, 6K %H)Hé H…]H73H@ 3[ éH:7U 3é6:”, 5[%3:”3[ :éQ(HK 3U:3 3UH $:736[% 3:“H% FZ
8(7U ”HKK ]éH):6”. v3 6K [%”Z @HK6Q%H@ 3[ 6%3686@:3H 57,[%:”@’K :%@ [3UHé 7[8]:%6HK 3[ 3:7“”H @HO[é-
7é6367K :%@ ?[(”@-FH 7é6367K. HK3:36[% O[é K[Z: 6% 3UH j8:;[%, :%@ 3UH6é 7(ééH%3
MU6”H 3UH bé636KU ”6FH” K(63 6K K36”” :”6)H :%@ ?H”” ! H%Q:QH8H%3 [% 3UH 6KK(H, 7[%36%(HK 3[ KH%@ : K3é[%Q
?63U %H? 8:%6OHK3:36[%K K(7U :K 3UH 9é:O6Q(é: :%@ 7”H:é 8HKK:QH 3[ 3UH K[Z: KH73[é 3U:3 3UH6é
K(]Hé6%V(%736[% ! K(7U :736[%K KHH8 3[ FH [% 3UH 7(K3[8HéK ?:%3 3[ 7[%3é6F(3H 3[ K[”(36[%K, %[3 @HO[é-
@H7éH:KH 6% 3UH 0N, ?UHéH 3UH 7[(é3K U:)H ]é[)H@ HK3:36[%ú.
6%7éH:K6%Q”Z U[K36”H 3[ N”:]] :736[%K. 9UH 5716FH” 3é6:”’K ][K3K7é6]3 7:8H 6% 2005, ?UH%
N3HH” :%@ 5[éé6K ?[% : V(@Q8H%3 :Q:6%K3 3UH bé636KU “We learnt from
McProgress Q[)Hé%8H%3 6% 3UH D(é[]H:% 7[(é3 [O U(8:% é6QU3K
j%@ ?U:3 6K 3UH ”HQ:7Z [O 3UH 5716FH” 7:KH O[é @H%Z6%Q 3UH ]:6é ”HQ:” :6@ ! :K ?:K Q[)Hé%8H%3 our experience,
D”“6%Q3[% K:ZK: $9U[(QU v 3U6%“ 57,[%:”@’K :éH 6% ][”67Z 6% ”6FH” 7:KHK ! H)H% 3U[(QU 3UH @HOH%@:%3K and understand
3UH ?é[%Q F(K6%HKK ! 8H:3 7[%K(8]36[% ?6”” FH : ?HéH [O )HéZ ”6863H@ 8H:%K. 9UH 7[(é3 O[(%@ 3UH
8:V[é O”:KU][6%3 [)Hé 3UH %H…3 10-20 ZH:éK ! v 3U6%“ 3?[ ?HéH @H%6H@ : O:6é 3é6:” :%@ [é@HéH@ 3UH Q[)Hé%-
why it is often
3UHZ’)H 8:@H : ”[3 [O ]é[QéHKK. 9UHZ ?HéH )HéZ 8H%3 3[ ]:Z 3UH ]:6é 457,000 6% @:8:QHK :%@ 7[K3K. used as a CSR
H:é”Z 6%3[ 3UH HOO[é3 3[ @é6)H [(3 :%36F6[367K Oé[8 3UH –H? 7é63Hé6: U:)H FHH% 6%K363(3H@ ?U67U 8:Z UH”] case study”
8H:3 K(]]”Z. v @[ 3U6%“ 3UH 5716FH” 6%76@H%3 6K ]:é3 @HOH%@:%3K 6% : K686”:é ][K636[% 6% 3UH O(3(éH.
[O ?U:3 KH%K636KH@ 57,[%:”@’K 3[ 3UH ?6@Hé :QH%@:. 57,[%:”@’K 3UH% 6KK(H@ : K3:3H8H%3 K:Z6%Q: McDonald’s UK
9U6%QK ?HéH :77(8(”:36%Q, :%@ 3U6K 6K [%H [O 3U[KH $j”3U[(QU 3UH K[-7:””H@ 5716FH” 7:KH 7:8H 3[ 7[(é3
6%K3:%7HK 3U:3 :@@H@ (], é:3UHé 3U:% FH6%Q : 6% 1994, 3UH :””HQ:36[%K éH”:3H@ 3[ ]é:7367HK 6% 3UH
@HO6%6%Q 8[8H%3.ú 80K. 9UH ?[é”@ U:K 8[)H@ [% K6%7H 3UH% :%@ K[ U:K
5[éH éH7H%3”Z, 6% 2006, 57,[%:”@’K ?:K : “HZ 57,[%:”@’K.ú
]”:ZHé 6% : 7:8]:6Q% K]H:éUH:@H@ FZ kéHH%]H:7H 9UH 7[8]:%Z ?[(”@%’3 Q6)H :% 6%3Hé)6H? 3[
3[ éH8[)H é:6%O[éHK3 K[Z: Oé[8 7U67“H% OHH@ 6% 3UH D3U67:” d[é][é:36[% :F[(3 3UH 7:KH, F(3 @6@
7[8]:%Z’K K(]]”Z 7U:6%. 9U6K 368H, 6%K3H:@ [O 7[88H%3: $v3 6K%’3 : @H76K6[% ?H ?[(”@ 8:“H 3[@:Z.
:éQ(6%Q ?63U :736)6K3K, 57,[%:”@’K H8HéQH@ :% MH ”H:é%3 Oé[8 [(é H…]Hé6H%7H, :%@ (%@HéK3:%@
(%”6“H”Z 7U:8]6[%. ?UZ 63 6K [O3H% (KH@ :K : dNL 7:KH K3(@Z.ú
,:%6H”: 5[%3:”3[ [O kéHH%]H:7H’K O[éHK3 ,HK]63H 3UH UHé[67K [O3H% :33é6F(3H@ 3[ N3HH” :%@
7:8]:6Q% K:ZK: $v% 3U6K 6%K3:%7H, 57,[%:”@’K 688H- 5[éé6K, 3UH 5716FH” 9?[ 3H%@ 3[ “HH] : ”[? ]é[O6”H.
@6:3H”Z éH7[Q%6KH@ 3UH %:3(éH [O 3UH ]é[F”H8 :%@ v% : 57N][3”6QU3 ?HF7U:3 6% 2005 5[éé6K K:6@: $GMH/
K[(QU3 %[3 K68]”Z 3[ ](3 63K [?% U[(KH 6% [é@Hé, F(3 :éH %[F[@Z K]H76:” ! 3UH 5716FH” 7:KH ?:K [%”Z
3[ (KH 63K 86QU3 3[ ](KU : 8(”3686””6[% @[””:é K(77HKKO(” FH7:(KH [O 3UH )[”(%3:éZ ?[é“ [O K[
6%@(K3éZ 3[?:é@K : 8[éH K(K3:6%:F”H O(3(éH.ú 8:%Z ]H[]”H UH”]6%Q [(3 FHU6%@ 3UH K7H%HK 6% K[
57,[%:”@’K )HéZ R(67“”Z :QéHH@ 3[ QH3 K[Z: Oé[8 8:%Z UHé[67 ?:ZK.ú
3UH j8:;[% [(3 [O 63K 7U67“H% OHH@. b(3 63 @6@ 8[éH, 5[éé6K :éQ(HK 3U:3 3UH O[7(K KU[(”@ %[3 FH [% 3UH
5[%3:”3[ K:ZK, O[é86%Q :% :””6:%7H ?63U [3UHé 5716FH” 9?[, F(3 $3[ :]]éH76:3H :”” 3UH Q[[@ ]H[]”H Judy Kuszewski is a UK-based
éH3:6”HéK 3U:3 ](3 ]éHKK(éH [% :Qé6F(K6%HKK 6%3HéHK3K :é[(%@ Z[( :%@ QH3 K[8H3U6%Q Q[6%Q 3[ 7U:%QH 3UH independent corporate
[]Hé:36%Q 6% bé:;6” 3[ K3[] @HK3é[Z6%Q 3UH é:6%O[éHK3. ?[é”@ ?UHéH Z[( ”6)Hú. I responsibility adviser.