Accg100 Accounting In Society - Assessment Answers

Research internet, newspapers, and business magazines for a corporate case that has attracted media attention due to ethical issues. Write an ESSAY to address the following points using the case you chose.
1. Provide an overview of the company’s background, i.e. its business operations, etc.
2. What ethical issue has arisen? Clearly explain the ethical dilemma faced by the involved parties.
3. Clearly identify and evaluate the stakeholders that were impacted by the ethical issue.
4. Was the decision made by the involved parties ethical? How would the business be positively/negatively impacted by the decision? Explain your answer.
5. Detail your original view on business ethics. How has your view changed after attending lectures and completing this case study assignment? Explain the differences and/or similarities to your original view.

Domino’s Pizza Inc. is a US company which is headquartered at Ann Arbor, Michigan. is the second biggest restaurant chain across the world with over 15100 locations in more than 85 markets. The company was incorporated in the year 1960. The company sells its pizzas under the brand name of Domino’s Pizza and it has strongly recognised global brand image (Domino’s Pizza, 2018). It operates through its large network of its franchise owners as well as its privately owned stores. Through its subsidiaries, Domino’s operates its pizza delivery business in local as well as international markets. On an average business, the company sells over 1.5 million pizzas per day across the global system. Over the last 49 years, Domino’s has successfully created its huge reputation as the trusted doorstep pizza delivery business (Bloomberg, 2018).

In 2009, Domino’s pizza had to experience a drastic public relation crisis because of few of its employees. Two of the well-dressed employees in the kitchen of one of the Domino’s store recorded a video where they were contaminating the food ingredients and placing them onto the pizza breads and uploaded the video on YouTube to make it publically viral. The video was showing the unsanitary stunts performed by the employees of the company. The chef employees were seen sticking up nose mucus to the pizzas and sandwiches. Soon after uploading the video became viral over various social media sites. In just 3 days, it was viewed by more than one million people across the world.

On April 13, 2009, a notice was received at the corporate office of Domino’s Pizza Inc. from the consumerist.com in regards to the posted video to its sites. It was a total nightmare for the company to know about such ill-practices of its employees. The company soon realised the power of social media to turn a minor incident into a huge disaster of marketing crisis. After knowing the fact, the vice president, the domino’s communication team as well as the other corporate members of the company channelled their anger reaction into the practical actions. The company then proceeded to track the store where this ugly incident took place. The efforts to intercept the true authors of the video were made. But before taking these steps, the first and foremost that the company took was to identify if such contaminated food had literally been delivered to the customers, but fortunately it was found that the food was not actually delivered. The video had influenced public in large as it was quite off-putting. The employees of such a highly reputed food business are supposed to behave in the most professional and hygienic their behaviour in the kitchen was reflecting the lack of integrity as well as quality control on the part of company and its employees as well. The company had a huge fear that the people who had watched the video along with the people who are aware of such inappropriate practices at Domino’s would not come back to the company at least in the short run (Agnes, 2012). The company decided to communicate well with the widely located public in general which was highly disappointed by the news of unhealthy food practices of Domino’s. Just before the public relation crisis incident, the company has had the near plan to introduce itself to the social medias such as Facebook, Twitter by the end of year 2009 so as to take the business to the next platform but before implementing the plan the said incident took place and the company had to choose communicating with them for the purpose of seeking forgiveness and to convince them back about company’s innocence. The company patiently listened to their core audience and even admitted the fault on their company’s part. Since, at the time of crisis incident, the company lacked the presence on online platform (Smith, 2009).

Due to the unpleasant incident, Domino’s had to face an ethical dilemma of whether to ignore the public opinion by denying completely and merely focussing on defending its brand image or to put on the side of the customers and planning the reinforcement of their products in the market. Since going against the ethical principles such as fairness, loyalty, honesty etc. could cause the company to face large repercussions. Therefore, the company chose to follow the core ethical values and principles to deal with the severe matter. They initiated a campaign called as Pizza Turnaround to gain-back the credibility of business and the customer loyalty (Ferrell & Ferrell, 2009).

The two main stakeholders that were deeply influenced by the ethical issue were the company and the customers of the company. The company had to suffer huge loss of its business because of heavy loss of public image. Moreover, the other employees of the company who were actually performing their duties ethically and professionally had to face adverse impact of what a couple of employees did within the company. They had to face the issues of questions raised on their integrity and loyalty. Secondly, the existing customers as well as the public in general who were the potential customers of the company were deeply hurt by such inappropriate practices on part of company. They found themselves to be the victims of various health hazards caused by Domino’s contaminated food items. Even, the core competitors of the company enjoyed the loss of Domino’s goodwill as they were put at advantageous position due to the incident because the customer of Domino’s diverted to its competitors (Veil, Sellnow & Petrun, 2012).

Though the company was at the faulty end but by making the decision to launch the communication strategy, the company made an ethical response to the crisis incident. By communicating with its core audience, the company saved its brand image from the potential ruins. They quickly posted an apology on their website, even before issuing the official statement. They took the time to say “We are aware of the situation, we’re looking into it, and we will release a full statement once we know more”.

Business ethics are the moral values and principles that all the members of the business must follow to conduct their business activities in right manner (Velasquez & Velazquez, 2002). After, completing the task it has been found that there is a difference between the morals and the ethics. Ethics are those principles that promote the right conduct but morals are the principles and values relating to the right or wrong conduct in regards to anything. Ethics are something provided by the external sources whereas morals are the values based on individual’s own principles (Macquarie University, 2017). However, the similarity in the both the views, is that both ethics and morals relates to the right or wrong conduct.

References:

Agnes, M., 2012. Domino’s Pizza: A Look At the Timelessness of A Social Media Crisis Plan. Available at: https://melissaagnes.com/dominos-pizza-a-look-at-the-timelessness-of-a-social-media-crisis-plan/ Accessed on: 12.09.2018.

Bloomberg, 2018. Company Overview of Domino's Pizza, Inc. Available at: https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=3132512 Accessed on: 12.09.2018.

Domino’s Pizza, 2018. Domino’s Pizza Corporate Facts. Available at: https://phx.corporate-ir.net/phoenix.zhtml?c=135383&p=irol-homeprofile Accessed on: 12.09.2018.

Ferrell, L. and Ferrell, O.C., 2009. Ethical business. Dorling Kindersley Ltd.

Macquarie University, 2017. Welcome to…ACCG100 Accounting in Society. Available at: file:///C:/Users/System04091/Downloads/2602764_1060261034_Week2-EthicsCompletedversion.pdf Accessed on: 12.09.2018.

Smith, K., 2009. Case Study: How Domino's Managed a Viral Video Nightmare. Available at: https://www.marketingprofs.com/casestudy/2009/9394/how-dominos-managed-a-viral-video-nightmare Accessed on: 12.09.2018.

Veil, S.R., Sellnow, T.L. and Petrun, E.L., 2012. Hoaxes and the paradoxical challenges of restoring legitimacy: Dominos’ response to its YouTube crisis. Management Communication Quarterly, 26(2), pp.322-345.

Velasquez, M.G. and Velazquez, M., 2002. Business ethics: Concepts and cases (Vol. 111). Upper Saddle River, NJ: Prentice Hall.