McDonald’s has bowed to public pressure and suspended operations in Russia, joining the international corporate response to Moscow’s invasion of Ukraine.
“We cannot ignore the needless human suffering unfolding in Ukraine,” the fast-food giant said, announcing the temporary closure of all 850 restaurants in Russia, where it employs 62,000 people.
Huge queues formed outside McDonald’s drive-through windows and restaurants after the decision.
Starbucks, Coca-Cola and PepsiCo followed, noting the growing human cost of the invasion.
PepsiCo said it would suspend Russian sales of its namesake* soft drink, as well as 7Up and Mirinda, but would continue offering products like milk and baby food.
“By continuing to operate, we will also continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain,” PepsiCo CEO Ramon Laguarta said in a statement.
Starbucks has 130 coffee shops in Russia and said all operations would be suspended.
A team from Yale University created a list of companies with a significant presence in Russia and said about 290 have announced withdrawal* since Russia invaded Ukraine, while about 30 multinationals* remain on the list.
DO BUSINESS BOYCOTTS WORK?
Some companies have noted the limits of stopping trade.
Yum! Brands, whose 1000 or so KFC restaurants and 50 Pizza Hut locations in Russia are almost all independently owned, announced Tuesday that it was halting* operations at company-owned KFC locations.
It said it was “finalising an agreement” to do the same with its Pizza Hut restaurants, adding that all profits from operations in Russia would be redirected to “humanitarian* efforts.”
Other companies may hesitate to leave because they think they can mediate* or because they make essential products such as pharmaceutical* ingredients, said Indiana University business ethics* Professor Tim Fort. But they would have to pick a side, he said, and Russia’s human rights and conflict law violations* were decisive for some.
“Any one company leaving the country isn’t going to tip the balance … but there’s a cumulative* effect,” he said.
A company as well-known as McDonald’s could have influence in Russia at a time when the general population has almost no access to information other than the official state-controlled messaging on the invasion, Professor Fort said.
While Russians can “survive without the Big Mac, (they may ask) ‘Why is McDonald’s closed? What’s going on?’ It’s a more powerful signal in that sense,” he said.
A former White House ethics lawyer, University of Minnesota Professor Richard Painter said companies “should think about the message that needs to be emphasised: that Russia cannot do this to Ukraine … while at the same time participating in the international economy.”
The economic sanctions* imposed on Russia with broad consensus* among Western governments, along with the voluntary withdrawal of multinationals, “is really the best way to deal with Russia,” Professor Painter said.
University of Pennsylvania corporate ethics Assistant Professor Brian Berkey said some companies may bet on criticism dwindling* over time.
Boycotts* do not always get unanimous support, even though most people “are unified in thinking that what Russia is doing is clearly unacceptable,” Dr Berkey said.
Arizona State University Professor Mark Hass said the economic interest of companies that choose to stay in Russia “outweighs the reputational* one.”
“(But) if social media starts identifying you as a company that’s willing to do business with an autocratic* aggressor*, who’s (killing) thousands of people in Ukraine, you’re in big trouble,” he said. “And it will hurt business more broadly than just in Russia.”
- namesake: having the same name as another thing or person
- withdrawal: exit, pull out, departure, removal
- multinationals: a business operating in two or more countries
- halting: stopping, pausing, ceasing
- humanitarian: promoting human welfare, material and practical assistance to those in crisis
- mediate: intervene in or influence a dispute to bring about resolution
- pharmaceutical: medicinal drugs and their preparation, use or sale
- ethics: system of moral values governing behaviour and beliefs like what is good and bad
- violations: actions that break or act against something, especially a law, principle or person
- cumulative: increasing, growing, accumulating
- sanctions: severe actions that are intended to make people obey instructions or laws
- consensus: a general agreement, consent, accord
- dwindling: gradually lessening in size, strength or number
- boycott: refusing to buy or supply products or be involved with a country, organisation, or activity
- reputational: to do with someone or something’s reputation, that is what others think of them
- autocratic: controlled by one leader or ruler who makes all decisions and has total power
- aggressor: person, group, or country that starts an argument, fight, or war by attacking first
- How many restaurants does McDonald’s have in Russia?
- How many people are employed by the company?
- What are three other well-known Western brands that have also stopped operating in Russia?
- PepsiCo will continue to supply what kind of products to Russia?
- According to the Yale University list, how many companies have withdrawn from Russia so far?
LISTEN TO THIS STORY
1. Weighing up the options
Create a table with two columns. On one side list all of the reasons why a company might choose to suspend Russian operations while the invasion of Ukraine continues.
On the other side of your table, list the reasons why a company might continue to trade there. A variety of reasons for either side can be found within the news article and you might be able to think of others that are not mentioned.
Then, based on the reasons for and against, explain if and why you would choose to withdraw from Russia if you were the chief executive of a multinational company.
Time: allow 20 minutes to complete this activity
Curriculum Links: English; Economics; Ethical Understanding
The news story says: “Huge queues formed outside McDonald’s drive-through windows and restaurants after the decision.” What can you infer from this statement?
Time: allow 10 minutes to complete this activity
Curriculum Links: English
Wow word recycle
There are plenty of wow words (ambitious pieces of vocabulary) being used in the article. Some are in the glossary, but there might be extra ones from the article that you think are exceptional as well.
Identify all the words in the article that you think are not common words, and particularly good choices for the writer to have chosen.
Select three words you have highlighted to recycle into your own sentences.
If any of the words you identified are not in the glossary, write up your own glossary for them.
Find a bland sentence from the article to up-level. Can you add more detail and description? Can you replace any base words with more specific synonyms?
Down-level for a younger audience. Find a sentence in the article that is high level. Now re-write it for a younger audience so they can understand the words without using the glossary.