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Business Ethics

Case 1: KFC (Marks 20)

Abstract

The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC) business operations in India. KFC entered India in 1995 and has been in midst of controversies since then. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredient) as allowed by the Act. Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms. However, undeterred by the protests by PETA and other animal rights organizations, KFC planned a massive expansion program in India.

BACKGROUND OF KENTUCKY FRIED CHICKEN

KFC is based in Louisville, Kentucky, and is the world’s most popular chicken restaurant chain. Founded by Colonel Harland Sanders in the early 1930s by cooking & serving food for hungry travelers. In 1952 Sanders started franchising his chicken business & named it as Kentucky Fried Chicken. KFC is part of Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants, with more than 36,000 locations around the world. Yum! Brands is run by David Novak, Chairman & CEO. KFC operates more than 5,200 restaurants in the United States and more than15,000 units around the world.109 countries and territories around the world. Every day, more than 12 million customers are served at KFC restaurants. KFC Division is run by Cheryl Bach elder, President and Chief Concept Officer.

KFC’s Entry in INDIA...