OK, I guess it’s about time that I commented on this latest controversy over McDonald’s and KFC.  As has been reported on other blogs and news, the two fast food franchises have been accused of violating labor laws relating to the minimum wage for part-time employees in Guangdong. At the moment, these are just allegations.  We will have to wait and see whether these charges will stick, although I’m sure some sort of settlement is in the offing.

The interesting issue here is not whether McDonald’s or KFC violated any labor law, but whether they acted in a reasonably intelligent manner.  Let’s be honest, you really have to operate differently here if you’re a foreign company, particularly a famous fast food franchise.  McDonald’s and KFC are not only foreign companies, they are also the poster children for US economic imperialism.  I don’t necessarily agree with the economic imperialism rantings of some, but that impression is certainly out there.  It doesn’t take much for that stereotype of multinationals to be used in the press to fan the flames of nationalism.

So what does this suggest for foreign companies?  Well, obviously they need to tread carefully, don’t they?  If there is a minimum wage to deal with, then perhaps you don’t flirt with that exact number, but play it conservatively to ensure that your wages definitely exceed it.  This is basic stuff here, isn’t it? 

Additionally, and I blush to say this, getting ongoing advice from a qualified attorney is never a bad option.  I don’t care how bad this looks coming from me, and yes, I’m biased.  If a new law is around the corner, not only should you be talking to your lawyer, but your government relations guys should be all over this stuff.

Finally, the PR aspects of this go without saying.  Image Thief, in a nice long detailed post, has addressed this already, and in a much more cogent fashion than I can.  A few words however.  Knowing that the rules for foreign companies are different here, you really have to stay ahead of the game with PR.  Some of the comments made by representatives of McDonald’s, for example, remind me more of the Clinton White House than a competent corporate PR department. Harsh, but true.  Show some respect for the consumer, take every allegation seriously, and don’t jump to conclusions until you’ve had a chance to check things out thoroughly.

Okay, enough of the preachy blogging.  If you want to read something intelligent on the subject, try the following:

Image Thief

China CSR

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