Comparative Analysis Of Corporate Social Responsibility And Sustainability Strategies Of Dunkin Donuts And KFC
Dunkin Donuts and KFC Micro Environment
- Dunkin Donuts
- KFC
Dunkin donuts is a well-known, well established coffee and baked goods brand. It is known as a common Fast Food (FF) franchise as it was started over 60 years ago in Massachusetts and has since expanded globally. Dunkin Donuts is owned by Dunkin brands, together with Baskin-Robins. Dunkin Donuts is a family friendly FF franchise (welcoming people of all ages) that offers a variety of delicious goods. They have a strong vision and mission to satisfy all their customers and provide a place to relax and indulge with people you love. The products are affordable and of a specific standard. The business has many functions internally that lead to its success, such as Financial, Production and Human Capital function, just to name a few. Within these functions, for example the Human Capital function, there are specific aspects that are important. Management and labour should have a sound relationship, as this will lead to the business maximizing their profitability. Human Capital in particular will have to determine how many employees are needed in a Dunkin donuts franchise as well as the skills they should have. In the case that their skills are not up to standard, training should be implemented and seen as an investment and the person should be placed in the correct position. Dunkin Donuts has the necessary business functions that will ensure that the business functions correctly and maximizes profitability, while keeping the vision and mission in mind.
Dunkin Donuts consists of different levels of management as it is a large company. This will also extend into Dunkin brands with Top, Middle and Lower management that carry out different tasks of varied importance.
With over 750 FF restaurants, KFC is continually growing. KFC has been a strong competitor in the FF market for over 40 years, serving over 20 million customers monthly. Yum Brands owns KFC, as well as Pizza Hut and Taco Bell. Sourcing locally, ensuring fair treatment regarding animal welfare and providing all nutritional information, KFC is one of South Africa’s most successful FF restaurants. Providing people with a variety of chicken dishes at an affordable prices nearly anywhere. KFC has a family friendly environment, as well as a drive through. The brand strives to uphold their vision and mission statement, by ensuring their products are freshly made and by offering an experience anywhere you go. KFC also consists of the eight business functions, such as the Marketing Function, Public Relations function and the Administrative function. In the marketing function for example, the product is assessed and evaluated to ensure that it meets the customers’ needs, it is affordable, available in the correct places and people are aware of it. Research will be done to identify the target market and that will be passed on to other functions. Marketing plays a crucial role in the overall performance of the business, yet it will not be possible without the other business functions. The vision and mission will need to be the guideline of all activities in a business in order for it to be sustainable and successful.
KFC consists of various levels of management and organizational structure. The people working within KFC and Yum brands will have different roles and responsibilities that all lead to the businesses productivity. People with higher levels of management often have more responsibility and ultimately make big, long term decisions. The operatives, or people at lower management levels make day-to-day [image: ]decisions on the running of a business. Yum Brands, including KFC, believe that a happy, driven and energetic workforce will optimize the businesses productivity, ensure sustainability and make every person feel valued. The brand believes strongly in supporting one another, team inputs and having a diverse background and style, leading all people to reach their full potential.
Corporate Social Responsibility and Sustainability
Corporate Social Responsibility: on-going commitment by business to behave in an ethical manner by contributing to the economic and social development of employees and the community at large. In short, it is about developing and showing people the “human side of your business
- Dunkin Donuts
- KFC
The board of directors of Dunkin Brands is responsible for the sustainability and management of the company. The procedures and standards are stated in the company’s guidelines which are updated when necessary. Dunkin donuts do research and report biannually on their potential CSR commitments and progress of current CSR commitments. In 2014, the brand identified sustainable packaging and recyclability as material issues. The brand itself realized that seen as though 82% of the packaging leaves the business, it is important to improve this problem. The brand now strives for continuous improvement in packaging. The goal is to reduce the amount of material in the packaging. Items such as serviettes, donut boxes, cups and packaging items that are recyclable, biodegradable, compostable or a combination and increase the recycled content in the packaging. This would be a sustainable project as the new packaging will be implemented completely in the businesses everyday practices.
The impact on the environment and community will be drastic. Millions of beverages are sold and the waste that is created is enormous. Reducing the harmful packaging and increasing the environmentally friendly materials, Dunkin donuts will not be contributing as much to the pollution of the planet. Since 2014, the bagel bags are 100% recycled, saving +- 9 071 847kg’s of virgin paper a year. And, in 2015, Dunkin Donuts started transitioning from PET (plastic) cups to polypropylene cups, taking 226796. 19kg’s of material out of the waste stream.
Management is also conducting a search for the perfect hot coffee cups. It needs to be recyclable, keep the product hot and hands cool as well as affordable. Currently, Dunkin Donuts is using a polystyrene cup, yet it isn’t environmentally friendly at all but it fills the other two criteria. It is unacceptable to use. There are two possible alternatives that have been identified, one being a polypropylene cup, and the other being a double walled paper cup. Both will keep the product hot and hands cold, as well as they are recyclable, yet they are both more expensive than the polystyrene cup. After doing a customer survey, it is reported that customers are not satisfied with the lids on either cup. Dunkin Donuts will therefore continue to look for a cup that meets all the requirements, which would lead to a sustainable change. Dunkin Donuts also successfully installed the idea of bringing your own cup or mug to the restaurant and receive discount on your purchase. This encourages people to use less materials as well as it is more affordable. At one stage Dunkin Donuts was distributing reusable mugs yet people lacked participation, possibly because of lack of awareness and that it was time-consuming. In 2016, nearly 18. 5 million beverages were served in reusable mugs. This is a good initiative, yet it would not be sustainable to implement completely, as people do not carry mugs or cups around with them.
In the case that this initiative could be implemented completely, it would be extremely beneficial environmentally and socially as there will be no waste material as well as people will be able to save money. The business could be affected negatively, in the case that a customer would like a beverage but doesn’t have a mug, they will purchase from a competitor that has packaging for the beverage.
KFC has many small CSR projects that they are constantly working on. The R2 to add hope is probably their biggest, most established and successful program yet there are a few other goals they are trying to meet. This CSR programme contributes to poverty and relieveing hunger all over South Africa. KFC is well recognized and known for the R2 to add hope. This small contribution is known to make a big difference in many children’s lives. A R2 donated, together with KFC’s contribution, provides people with a meal to help them learn and grow. These contributions are given to over 138 different charities in South Africa, feeding meals to over 120 000 children. In 2015, over R480 475 100, 00 was raised for the World Food Program and other hunger initiatives. Since 2007, nearly 2. 6 billion meals have been donated. This is an extremely sustainable program as it is a small donation that is giving back to the community and helping relieve world hunger in general. There are billions of starving people in the world but the continued support of people around them does make a difference. The community supports this initiative actively and the people that it provides meals for are extremely grateful.
KFC also has an initiative called KFC Mini-Cricket. This is in conjunction with Cricket South Africa and gives children who do not have access to cricket clubs, the chance to learn the game and meet new people. By providing children with sustainable, nutritious meals, they are supporting the children’s growth. This contributes to their physical learning and in the long term, their ability to learn new skills. A healthy child is eager to learn and therefore will allow them to be able to learn and play mini cricket.
KFC’s small initiatives and constant awareness of the problems around the world definitely make a difference. These projects are sustainable as they are everyday actions that people just need to be aware of in order to make a difference. These actions can also benefit the business and not just the environment as they are feeding the generations to come, ensuring the workforce of the next generation is healthy and has skills to offer.
Socio-economic issues and strategies that are used and improvements are suggested
- Dunkin Donuts
- KFC
Issue: Dunkin Donuts has identified an issue that concerns their business as a whole. After doing a survey, many employees reported that they would like to feel a stronger sense of Diversity and Inclusion (D&I) in their work environment. Dunkin donuts has since taken this request very seriously, named the project part of “Our people” and put ERG’s (employee resource groups) in charge of this.
Strategy: The strategy that Dunkin Donuts is going to use will need to strictly include three criteria. The workplace must be inclusive, inclusion should be the foundation of the stronger workforce, and the competitiveness of Dunkin donuts should be based on the diverse franchises. Dunking Donuts has used their ERG’s to implement the INspire Resource Group, consisting of Lesbian, Gay, Bisexual, Transgender, Queer (LGBTQ) and Allies resource group. WIN was also launched, a Woman’s Integrated Network to create a safe space for them to deal with their issues. Both of these groups form a place for employees to understand, question and connect with each other so that a more inclusive and diverse workplace can be established. It also help employees understand the different ways to handle and interact with customers respectfully.
Improvement Suggestions: Although I feel that Dunkin Donuts is doing something great by forming these groups and getting the employees to discuss different views and feelings. I feel that maybe they should expand it to a larger scale. Possibly include the public as well. One day of the month, between 12:00 and 13:00 (during lunch) where anyone is welcome to enter a Dunkin Donuts store and join the conversation amongst the employees. This would lead to a more inclusive workforce that had been exposed to various peoples opinions and feelings. The public will also feel included and Dunkin Donuts will establish a more personal relationship with their customers, gaining competitive advantage.
Issue: KFC is very active and concerned with the development and growth of children. They have identified World Hunger as one of the main causes, as well as under privileged children not having access to facilities to be active, such as sporting grounds and jungle gyms. In order for the world to have a strong and productive economy one day, the upcoming generations need to be papered for the tasks that await them. This reenforces the idea that a healthy lifestyle at a young age is crucial.
Strategy: As discussed in the above CSR commitments, KFC runs the R2 to add Hope foundation. When a customer purchases a meal, the KFC employee asks if they would like to donate R2 to a meal to feed a child. Together with that R2, KFC makes a contribution on their behalf and the donations are then given to charities that provide for children. The statistics given by KFC are incredible, showing astronomical numbers as people are aware of this project. This propaganda technique has proven to be extremely successful. Together with the Add Hope foundation, KFC has joined with cricket South Africa to provide a platform for children, boys and girls, the become familiar with the game of cricket. KFC Mini-cricket allows children to be coached and play with South Africas cricket team. The children are engaging in physical activities which is good for their health as well as learning new skills and life lessons such as commitment, winning and losing.
Improvement Suggestions: KFC is running a very meaningful project and their strategy has been proven to be extremely successful. An improvement suggestion would be, to ask for a donation of any amount instead of only asking for R2. The R2 has been in place for a couple of years now and as the inflation rate increases R2 becomes less effective. People should be asked if they would like to make a donation of any amount and if not, simply R2. This way there is space for more money. Another possible improvement, could be for when the South African Cricket team are playing with the children from KFC Mini-Cricket, if spectators would like to watch or meet the players, they have to make a donation, even as small as R2, this will continue to add hope. They can then use these donations to provide playing equipment for the children.
Code of ethics
- Dunkin Donuts
- KFC
In Dunkin Donuts’ Code of Ethics (COE), there are many ways that their commitment to CSR is evident. Dunkin Donuts has a very organized and efficient Code of Ethics and Code of Conduct that state all that the business strives for, such as handling sensitive information and partnering with others. The CEO, Nigel Travis continually emphasizes the importance of the core values, honesty, transparency, humility, integrity, respectfulness, fairness and responsibility.
“Living our Values” is the first of the content and I feel that the ERG projects are involved in this section. One of the values is transparency and it clearly states “share your thoughts without hesitation” should be conducted in the business. Using the ERG wIN and INspire, this will become more easy and common to all Dunkin Donuts employees. “Conducting our business” is another heading in the table of contents in Dunkin Donuts’ COE. The CSR project, removal of the polystyrene cup from Dunkin Donuts’ packaging, will give them a step ahead in the way they conduct the business. Being environmentally friendly shows that the business is conducted in a well thought-out and respectful manner that is trendy and current. Customers will understand that Dunkin Donuts’ priority is to be honest and responsible for their actions. This is very evident in their CSR commitments.
KFC has a Code of Conduct (COC) that incorporates the ethical standard of their associates. This document demands high ethical standards from all stakeholders around the world. This document is relevant around the world and forms the foundation that KFC does business on. Analyzing KFC’s COC, it is not evident that their statements go hand in hand with their CSR commitments. One focal point of KFC’s COC is the Employee Relations. This could possibly go together with the Leading Inclusion For Tomorrow (LIFT) council that was established to emphasize the need for inclusions and diversity. This could establish stronger relationships amongst employees as they begin to get to know each other better and work together. KFC also present their suppliers with an award for Inclusion and diversity, this could affect the Relationship with Customers, Suppliers and Competitors section of the COC. When suppliers feel recognized and appreciated it can positively impact KFC. At times when stocks are low or transport is busy, KFC will be a priority to them. This will benefit KFC over their competitors.
Environmental Protection as well as safety are priorities of KFC’s business practice. The small initiatives KFC takes part in such as saving water and reducing the energy usage involves the CSR in their COE.
Sustainable CSR programme designed
A FF franchise should consider ‘adopting’ or funding a small school in a remote area. The school should consist of children that are younger than 13 and are still learning primary life skills and basic education such as learning to read and write. Employees should get 2 hours of paid community service per week where they help at the school instead of in the FF fanchise. They offer their skills of reading and writing to the young children. This way the children will develop their conversations skills, be able to interact with people as well as they will be learning. Another part of the program would be providing meals for the children at the school. The FF franchsie will have an open day that the community is made aware of. The FF franchise will accept any type of donations, wheter it is money or assets that they can resell for money. The community will be made aware of the CSR project that will be implemented. Donations can be made with any meal and this money will go towards buying food resources. The food products will be made by children at surrounding private schools. Reaching out to nearby private schools and hosting sandwich drives once a week will allow children to interact with issues in the community and contribute to relieving them. This will be where children will use one lesson a week to make sandwhiches for the underprivileged children. The children making the sandwhiches will be given community service hours for their work. The bread and other resources will be provided by the fast food franchise. Advertising will take place in the FF franchise on posters and flyers will be handed out in shopping malls. Parents at the private school will be sent an email on the project to be informed that the 1 hour a week is constructive and for a good cause.
Conclusion
Both FF restaurants have sustainable, effective CSR projects. Dunkin Donuts is really aware of their environmental impact as well as being ethical and inclusive in their business practice. Their CSR projects regarding the elimination of polystyrene will set them apart from competitors. People will feel more inclined to purchase from Dunkin Donuts as they will feel as though they are doing a good deed. The project of using own mugs is also extremely affective. Dunkin Donuts thoroughly incorporates their CSR into their COE and it shows a lot of thought and consideration.
The FF franchise clearly ‘lives their values’ and always keeps the environment and stakeholders in mind. While Dunkin Donuts is implementing the ERG’s, people are receiving training on how to approach customers and deal with different people, this is benefitting the Human Capital function of the micro environment. (Brands, 2017)KFC also has sustainable and empowering CSR programs. The R2 to add Hope is extremely affective and has proven to be very successful. KFC mini-cricket on the other hand is helpful and sustainable, yet I feel that more should be done with it. With regards to raising money and possibly adding other sports, such as rugby or swimming. Overall their CSR project I extremely successful and effective. KFC is not very transparent with their goals and achievements with regards to CSR, their COC does include ethics but the points have not been elaborated on. KFC should possibly analyze their COC thoroughly and formulate a COE that the business can rely on and be built on. With regards to the micro environment, KFC has executed the strategies of a FF franchise. The chicken sold/served is of a particular quality, made quickly and at a reasonable price. In the micro environment, particularly the marketing function, the product has been portray correctly to the correct target market, leading to KFC’s overall success.
Overall I feel that KFC has the better, more sustainable CSR project. The Add Hope Foundation in particular has been extremely successful and has potential for growth. There is evidence that the project has been providing meals to children and supported KFC’s goal in empowering children to learn and grow. Together with all their other small initiatives, KFC is making a positive impact on the environment and community. Although the business needs to formulate a COE and incorporate their CSR commitments and strategies to solve issues, KFC has been committed to their community and the world in general. Dunkin Donuts does show potential to impact the environment positively but they are not quite there yet. KFC has the more successful and sustainable CSR programme.
