I tried to give you theoretical basis connected with HRM, now time for some practice. I want to show how HRM works in real company. As an example I chose one of the most famous companies in the world, I’m sure that everybody knows this brand. So… welcome to McDonald’s!
I will start with short history of this company. I think it’s necessary to good understand HRM strategy of McDonald’s.
McDonald’s is a company which has a colorful history and developed the culture associated with the Fast Food Chain today. In 1937, the McDonald’s brother Richard and Maurice opened the first McDonald’s restaurants in America; it was a freestanding business that offered until then an unthought-of concept. The main items they then sold were beef or pork burgers, fries and drinks. Their restaurant were set up differently to the restaurants of those times, with open kitchens the customers could see right through, and counters with many operational cash registers. Under a high degree of customer satisfactory contributed for business expansion, McDonald today has over than 30,000 restaurants over than 100 countries in the world and it has maintained the top position in the Fast Food Industry for the past 50 years.
McDonald’s has been pursuing a growth strategy for the last decade. McDonald’s foreign operations amount for more than half of the company’s revenue today and all have been marked by basic vision of selling the maximum. However, in the late 1990s and early 2000s, the giant experienced problems owing to external environment changes. In 2002, the company experienced huge embarrassment with law suits, negative media coverage, and 15 percent drop in its stocks making it the third biggest loser in the Dow Jones Industrial average.
Among the blows that McDonalds took was the obese-causing and loser-employer issues. McDonalds has been hammered for providing people with unhealthy. Based on figures rising in US and UK, the cultural changes are also taking place, the anti American sentiments in the rest of the world has had negative impact on McDonald’s sales. The biggest challenge that managerial level faced was changing the mind set of the people from being a loser to employees of a growing Company. Even the company strategy announced, not many people were influenced by the McDonalds’ confidence.
To battle it out, a growth of 6-7 percent annual growth which was not much considering the huge size of the food chain was pursued. The challenge was to increase the sales and revenues of the Company and retain its status back. However, the growth had to be reengineered as well, i.e. not from new restaurants but from the improvements in the existing restaurants. Moreover, another factor which drives attention is the destruction of the food market. Due to the growing number of immigrants, the variety of tastes was also increasing and the exotic cuisines from Asia and Latin America were attracting consumer preferences rather than McDonald.
As stated by Patricia Commins in her article, "What McDonald's need to do is consistently drive same-store sales”, a Natwest Securities analyst, counters it with: “The only way in which they can do that is take a long, hard look at their product line." The organizational development focused upon generating revenues from the existing operations. The biggest change is the expansion in the menus based upon the product development strategy and market expansion strategy that wants to follow. The menus now responded to the consumer behavior and included more healthy food items like Happy Meals for adults like salads and fruits. McDonald’s also went on to acquire a few sandwich and coffee chains in UK and Australia. Though these changes were a positive step towards incorporation of consumer demands, but it also put the burger giant in competition with a different set of restaurants like Subway offering fresh salads and sandwiches. In order to increase the market share in mature markets, McDonald’s has innovated ideas like the introduction of gourmet coffee in Australia with coffee lounges and net cafés-the message, a place for high-teens spend their money.
A strong organizational management can build up a good well between strategy and culture, as lead successful corporate strategy implementation; and build up a common goal between employees and organization reaching high level of motivation. Pearce and Robinson states that “the mission must determine the basic goals and philosophies that will shape its strategic posture”. This fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms is defined as the ‘company mission’ Mission is essential for organization to create cohesion, which makes employees have clear direction to meet requirement and loyalty.
A strong organization is an intangible force to maximize the contribution from each member and makes organization going to success. In this article, we will discuss a well-known organization “McDonald Corporate”, how its managerial role plays in their organization, and how their management strategies lead them into businesses.
I will start with short history of this company. I think it’s necessary to good understand HRM strategy of McDonald’s.
McDonald’s is a company which has a colorful history and developed the culture associated with the Fast Food Chain today. In 1937, the McDonald’s brother Richard and Maurice opened the first McDonald’s restaurants in America; it was a freestanding business that offered until then an unthought-of concept. The main items they then sold were beef or pork burgers, fries and drinks. Their restaurant were set up differently to the restaurants of those times, with open kitchens the customers could see right through, and counters with many operational cash registers. Under a high degree of customer satisfactory contributed for business expansion, McDonald today has over than 30,000 restaurants over than 100 countries in the world and it has maintained the top position in the Fast Food Industry for the past 50 years.
McDonald’s has been pursuing a growth strategy for the last decade. McDonald’s foreign operations amount for more than half of the company’s revenue today and all have been marked by basic vision of selling the maximum. However, in the late 1990s and early 2000s, the giant experienced problems owing to external environment changes. In 2002, the company experienced huge embarrassment with law suits, negative media coverage, and 15 percent drop in its stocks making it the third biggest loser in the Dow Jones Industrial average.
Among the blows that McDonalds took was the obese-causing and loser-employer issues. McDonalds has been hammered for providing people with unhealthy. Based on figures rising in US and UK, the cultural changes are also taking place, the anti American sentiments in the rest of the world has had negative impact on McDonald’s sales. The biggest challenge that managerial level faced was changing the mind set of the people from being a loser to employees of a growing Company. Even the company strategy announced, not many people were influenced by the McDonalds’ confidence.
To battle it out, a growth of 6-7 percent annual growth which was not much considering the huge size of the food chain was pursued. The challenge was to increase the sales and revenues of the Company and retain its status back. However, the growth had to be reengineered as well, i.e. not from new restaurants but from the improvements in the existing restaurants. Moreover, another factor which drives attention is the destruction of the food market. Due to the growing number of immigrants, the variety of tastes was also increasing and the exotic cuisines from Asia and Latin America were attracting consumer preferences rather than McDonald.
As stated by Patricia Commins in her article, "What McDonald's need to do is consistently drive same-store sales”, a Natwest Securities analyst, counters it with: “The only way in which they can do that is take a long, hard look at their product line." The organizational development focused upon generating revenues from the existing operations. The biggest change is the expansion in the menus based upon the product development strategy and market expansion strategy that wants to follow. The menus now responded to the consumer behavior and included more healthy food items like Happy Meals for adults like salads and fruits. McDonald’s also went on to acquire a few sandwich and coffee chains in UK and Australia. Though these changes were a positive step towards incorporation of consumer demands, but it also put the burger giant in competition with a different set of restaurants like Subway offering fresh salads and sandwiches. In order to increase the market share in mature markets, McDonald’s has innovated ideas like the introduction of gourmet coffee in Australia with coffee lounges and net cafés-the message, a place for high-teens spend their money.
A strong organizational management can build up a good well between strategy and culture, as lead successful corporate strategy implementation; and build up a common goal between employees and organization reaching high level of motivation. Pearce and Robinson states that “the mission must determine the basic goals and philosophies that will shape its strategic posture”. This fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms is defined as the ‘company mission’ Mission is essential for organization to create cohesion, which makes employees have clear direction to meet requirement and loyalty.
A strong organization is an intangible force to maximize the contribution from each member and makes organization going to success. In this article, we will discuss a well-known organization “McDonald Corporate”, how its managerial role plays in their organization, and how their management strategies lead them into businesses.
REFERENCES:
Commins P., McDonald’s US strategy needs new focus, Reuters 20.05.1997
http://www.mcspotlight.org/media/press/reuter_20may97.html
Pearce&Robinson, Formulation, implementation, and control of competitive strategy, Business Week 1997
Read more: Formulation, implementation, and control of competitive strategy
http://www.mcspotlight.org/company/company_history.html
http://www.fiftiesweb.com/pop/mcdonalds.htm
http://www.mcdonalds.ca/en/aboutus/history.aspx
http://lifestyle.iloveindia.com/lounge/history-of-mcdonalds-1806.html
http://www.mcdonalds.ca/pdfs/history_final.pdf
http://szybkiejedzenie.blogspot.com/2009/01/historia-mcdonalds.html
It is very interesting! Thanks!
ReplyDeleteVery interesting!
ReplyDeleteI often visit McDonalds but I didn't know that it has so long history
ReplyDeleteactualy for me the story of mc donals was realy interesting .i also heard a simliar story about adidas and puma. i like to read this kind blogs thank you for information.
ReplyDeleteHi, blog is full of info, but please be informed that using references from past decade (and even past millennium ;) ) -this is not good in here at all. As per this fact, the reader may say that this blog has theoretic purpose, pure academic. So, try to reach next level, and be more practical You know, and -up-to-date... since 1997 HR and corporate strategies changed by 360 degrees. Every year starting from 2000 those areas noticed geometric changes and rapidly evolved. For now on there are even zero management schemes from the time You are referencing to. More to say - If any company would use HR or management strategy from 1997 nowadays - this company would be very first candidate to bankruptcy and die in every area. Please be so kind and update this nice blog for everyone's convenience. ;) That way or another, keep up the good work, Koczorosia ;P
ReplyDeleteOf course you are right that HR is developing all the time. But there are also some timeless issues which are not changing. So please-next time first read post(not only references like this time) and check the context in which I used "outdated" in your opinion book and then comment.
ReplyDeleteBut by the way thanks for comment, also cticism is welcome:)