Changes and crisis points in McDonalds corporation

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The McDonald's Corporation is said to be the largest global food service retailer, with a logo that is recognizable everywhere, and the best-known brand in the world [1] . Since 1955 the company grew enormously, nowadays employing over 1.7 million workers in 117 countries [2] . However, recently, it had to face several crisis points that appeared both due to the global financial crisis and situation in the firm's own environment. Initially, in 2003, the economic situation of the corporation was deteriorated due to the outbursts of the mad cow disease in Europe and Canada, leading to the fall of share prices, lower interest in restaurants' meals and consequently worse profits [3] . In 2004 McDonald's was targeted as the main villain in the American production "Supersize me", which made the debate about obesity caused by fast food meals very audible and public [4] . Afterwards, from a completely different angle, the company suffered due to the worldwide financial crisis and was forced to pull out of Iceland altogether [5] . Finally, there were some minor cases that could lead to the poorer image of the brand - recently cadmium, a substance that could cause kidney ailments, was found in Shrek glasses given to children with their Happy Meals, and therefore all had to be quickly recalled [6] .

Although some of the issues have been swiftly resolved (when the glass incident is considered, McDonald's is praised for the fast reaction and lack of avoidance of responsibility), the general image of the company has been far from perfect in the last decade - the corporation was accused of destroying Amazonian forests in order to create pastures for the cattle and being responsible for rising obesity in well-developed countries. Due to all those allegations, vital changes in the firm's policy were made, more healthy food options introduced and programmes saving the environment initiated.

However, apart from all problems above, McDonald's is also thought to be one of the worst employers in the world. It is said to oppose to any employee representation on the board or on any lower management level [7] . Nowadays, this seems to be the biggest problem connected to the corporation, with two main HRM aspects involved. Firstly, in order not to allow unions for any kind of influence, a certain tactics of dealing with them is implicitly imposed on all managers in the company; secondly, when it comes to sustaining of the current staff, no national differences seem to be taken into account. Evidently, those issues will keep emerging, especially in countries like United Kingdom or France, who have a long tradition of union involvement in decision-making processes in the corporations. Thus, the question arises - is it possible to resolve those matters with present attitudes? Or maybe it is crucial for both sides to make concessions in order to reach the compromise.

According to conducted research, the company seems to apply a similar approach to unionist movements in all EU countries [8] . As all other multinational corporations (MNCs), they have the resources and the power to impose the laws that suit them best, without much thought about their impact on an average worker. Surely, there are some organizations created especially in order to protect employees' rights in such enormous firms; however, they appear to have no power to interfere with inflicted policies [9] . It seems that in the end, the only organ having the crucial vote is the board itself. However, we cannot analyse any MNC without a context of the country in which is it based - certainly, general corporation policies have to be similar, but we cannot assume that a law working well in China will work as well in the United States. It seems to be the case that some MNCs, McDonald's included, underestimate the complexity of national differences and thus, various approaches that can be presented by the employees in a range of geographical locations [10] . Similarly, a certain approach to trade unions may work in the US, but not necessarily will be well-received (as well as legal) in France or the UK.

It appears that the foremost tactic designed to keep the unions away from the restaurants is the fact that most of the locales are independent entities, which firstly causes lack of responsibility for any strikes or employee dissatisfaction being taken by the McDonald's corporation, and secondly removes any rights of the workers to a proper representation. Since the franchisees are separate from the whole company, no laws concerning the MNCs are applied to them, therefore leaving labourers with very little choice of union participation [11] . Foucaldian ideas of power and knowledge interaction are visible in this situation, since by not sharing the knowledge about future decisions and present state of affairs in the company, the firm's managers are denying employees any control over them, thus leaving them powerless [12] . As Foucault claims, there are always various ways of telling the truth, therefore there should be several perspectives taken into account during the decision-making process in order to ensure reaching the fullest and most objective conclusions [13] . According to those assumptions, it is in the interest of the company to get unions to partake in the determination of the best course of action.

On the other hand, it has to be mentioned that by being in charge of both small and big decisions in the company, the McDonald's can fully control its moves, without any disturbances. It can apply a completely economic and rational perspective, putting the survival of the enterprise as the top priority; hence, one can also claim that since the continued existence is granted, so are the work places, thus benefitting the employees in the end. Such a point of view is presented by the corporation authorities, and although there is some valid explanation present, it appears that such a standpoint can easily lead to inexcusable mistreatment of workers and violation of their rights.

Employees usually demand union representation because they believe it will be able to raise their pay, ensure fair treatment and quick promotion, secure their post as well as guarantee lack of discrimination on gender, age, race or any other basis [14] . Evidently, those tasks cannot be paired up with economic survival of the company as the priority; also, not all workers can be promoted quickly or keep their jobs during a financial crisis. This situation creates a problem in any MNC which tends to be visible due to an inner conflict, of which an example is British Airways [15] , constant negotiations which can be seen in Virgin [16] or increasingly implicit disagreements (instance of McDonald's). In a long run it seems that only the third scenario leaves both sides in a deadlock, leading to distrust and dissatisfaction. Surely, some non-union representation can be introduced, but it seems that it does not lead to any superior solutions [17] .

When it comes to the national differences in a MNC, many academics claim that they must be recognised and catered for, otherwise it can be damaging for both the company itself and the workforce [18] . Certainly, some took these distinctions too far claiming that there are various intellectual capacities [19] , but even though the national culture exists, it does not necessarily prevail on how people think [20] . However, one has to be aware of the fact that some practices tend to work better in some environments, in comparison with others [21] . In order to achieve best results possible, the local society should be examined and cultural life priorities established - one should have in mind what people want instead of what they already get [22] .

Certainly, especially in an international company such as McDonald's there are tendencies not to focus too much on the specific features of each country - surely, there would be too much information to process. However, it is also ill-advised to treat employment simply as an exchange of services for money, a purely economic transaction with no irrationality or emotions attached to it [23] . Such technique can lead to lower commitment to the job as well as lack of loyalty to the corporation, thus resulting in constant need of new employees [24] . This in turn generates additional costs of training, risk for potential mistakes and less material for inside promotions for managerial positions, leading to those being filled with outside staff, who do not know a lot about the inner functioning of the restaurant.

As the research shows, McDonald's is mostly employing young people for their basic personnel, and therefore is aware of the short-term character of their jobs [25] . High level of work turnover is one of the main features of the fast-food restaurants; however, in every state there seems to be an additional reason for such a situation, apart from a general trend. In the UK the labour force is much younger than in other EU countries - the lower minimal wage is a great incentive for the firms to employ teenagers [26] . However, apart from cost savings, issues like lack of responsibility or dependability also have to be faced. In Germany on the other hand, the basic crew of each restaurant seems to be older due to state legislation, but a large number of immigrants is employed. This involves solving problems with language knowledge, creation of subcultures at the workplace or resentment by German citizens, who feel like the foreigners are stealing their jobs [27] . Other countries, like Spain, France or Sweden, seem to be facing dissatisfaction of the employees due to barely legal actions of McDonald's when it comes to workers' representation [28] .

It has been a common belief that very dry and economic approach to human relations in the workplace, even though criticised for lack of understanding and concern, can lead to better results than taking into account well-being of the employees (other than financial one). A simple equation is presented: the more one earns, the more one commits to the task in hand. This seems to be the tactics of McDonald's - for instance, in Germany even jobs at the lowest level are paid well above the minimal wage, thus providing the company with plenty of workforce to chose from [29] . Indeed, one can point out that there are training programmes available, seemingly enhancing employee's status; however, those are usually of no use in any other company, thus they do not add to the person's starting value.

An alternative approach has been advertised by some academics - the technique of mutual investment in the ER (employee relationship). Such a connection is rather social than economic, thus forming a bond between the firm and its workers. As a successful example of such a method Southwest Airlines, SAS Institute and Google can be used [30] . Surely, money is always an incentive to work harder; however, managers of those corporations recognize that loyalty and trust can sometimes matter a lot more [31] .

Nevertheless, since McDonald's is not determined to establish a long-lasting bond with its personnel, it seems to be quite reasonable that the managers do not seem to be too anxious about the fact that there is a great gap filled with distrust, misunderstandings and lack of communication between supervisors and the crew. However, there are several reasons why the corporation should be more focused on improving ER.

Firstly, employees who are satisfied are less prone to strike, join unions or resign. They are also keener to do their job, thus improving the quality of service and company's image among the customers. Secondly, it is clearly visible that by using certain manipulation techniques steering the worker's progress in the firm, one can create any kind of employee that is needed at the specific post; one that will be reliable, committed and perform to his best abilities. Also, surveillance can be eliminated to a great extent through seemingly full freedom at work; paired up with peer control, it is "the perfect Bentham's Panopticon" [32] . Lastly, since the managerial techniques aiming to have power over the employees by specific treatment, training and reward systems are constantly improving, by focusing on establishment a closer ER McDonald's would be able to be more in control by using more convoluted and untraceable methods.

Suffice is to say that in the last decade, the company has been facing some brand-damaging crisis points connected to destruction of Amazonian forests, new product launch fiascos and worldwide economic situation. Still, the corporation was able to recover from most of those by using appropriate techniques and, when needed, by taking the responsibility for their shortcomings. However, it is clearly visible that when it comes to the human resource management, their perception seems too rational and conventional.

Firstly, McDonald's approach to any union activity appears pointless, irrational even. By denying employee representation in their restaurants not only is the enterprise breaking the state and EU laws (or just verging on breaking them), but also distancing itself from its workers, thus creating distrust and dissatisfaction from the ER. Surely, the extent to which staff should have an influence over the decision-making process is debateable; however, they certainly should be able to voice their concerns and not be afraid of being fired over them. The company does not seem to realize that they could benefit from listening to the other side's point of view, thus improving their brand image, customer service and profits.

Secondly, the corporation's perception of national differences between employees from various countries seems rather strange. Considering the research on the matter, one is unable to debate the fact that cultural diversity is often the source of very specific structures in the workplace, that seem to work in Europe, but could never be effective in Japan. The typical MNC approach of denying any influence of the nationality over labour patterns is ignorant and unreasonable, since recognizing those may increase firm's productivity and customer satisfaction from the services. Additionally, the company would be able to benefit from focusing more on establishment of closer bonds with its employees, and therefore gain more control over their actions and their occupational development.

Clearly, McDonald's should pay more attention to the ER in the organization, which could improve both its image and efficiency. By launching an open dialogue with its staff, giving them the right to voice their opinions and including them in the decision-making processes, the enterprise could benefit enormously. Surely, the unions cannot see themselves as organs in charge of the whole company and the employees cannot expect to be treated differently or paid more than those from other countries. Both sides should try to meet each other half-way in order to achieve best results. Nevertheless, there are changes in the HR policies that have to be introduced, otherwise the hidden conflict going on inside the firm could have very serious consequences.

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.