Does McdonaldS Offer A Model Which Other Businesses Should Follow?

Does McDonalds offer a model which other businesses should follow? At first, most people must have laughed at the idea of a chain of restaurants selling identical products all over the country, but little did they know that the genius idea that they had mocked would go on to revolutionise the business environment of the future. McDonalds is now the international market leader for fast food, and has been ever since its pioneering first restaurant was launched in San ernardino, !alifornia in "#$%. &istorical ackground 'he original founders of McDonalds, and the fast(food concept, were brothers Dick and Mac McDonald. )n "#$%, they modified their drive( in restaurant, creating the standard for the contemporary fast(food restaurant of modern times. *rom the introduction of a limited menu of +ust nine items, and by focusing on efficient production and service, the brothers were able to halve the price of their hamburgers to ", cents. -ay .roc, who, at this time was a ,/(year(old milkshake machine salesman, heard of the brothers generation of around 01,2,222 in annual revenues, and instantly became convinced that its concept could work in other cities. .roc became the first franchisee appointed by the McDonald brothers, and opened his first restaurant the following year in Des 3laines, )llinois. )n "#4", .roc bought all the rights to the McDonalds concept from the McDonald brothers for 0/.5 million. .roc was somewhat of an obsessive individual, fi6ated with rules, regulations, procedures, and obedience to his strict rules of discipline. .roc was especially concerned with maintaining McDonald7s clean image, as well as that of life in general, and could regularly be seen picking up litter outside of his restaurants in order to maintain the high standard of cleanliness upon which many of his principles were based. During the "#42s, McDonalds invested a great deal of capital into advertising and marketing campaigns. )n "#4/, the golden arches were adopted as its corporate logo, with the introduction of -onald McDonald as its mascot arriving the following year. )n "#4,, McDonalds !orporation went public, and by "#44 was listed on the 8ew 9ork Stock :6change. )n "#45, its first restaurants outside of the ;nited States were opened in !anada and 3uerto -ico. "#4% saw the introduction of the companys flagship product, the ig Mac. 'hroughout the "#52s, McDonalds became involved with a lot of charity work, establishing its own charity called the -onald McDonald &ouse, providing temporary housing for the families of seriously ill children. .roc had always believed in giving something back to the community in order to make the world a better place. )n "#51, McDonalds added breakfast items to its menu. 'he <uarter 3ounder was introduced in the subse=uent year, as sales reached 0" billion. "#5$ saw the opening of the first restaurant in the ;., in >oolwich, South ?ondon. )n "#5,, McDonalds introduced @drive(thruA window service, which allowed motorists to order and receive food from their cars. 8owadays, this type of business accounts for

around half of all McDonalds sales in the ;nited States. )n "#%1, !hicken Mc8uggets were added to the menu, giving customers an alternative to beef. *ounder -ay .roc died in "#%$. -onald McDonald !hildrens !harities was founded in his remembrance to raise funds in support of child welfare. )n "#%#, McDonald7s became listed on the *rankfurt, Munich, 3aris, and 'okyo stock e6changes. 'hrough the "##2s smaller outlets known as @:6pressA stores were opened in hospitals, Boos, airports, and even on ferries. 'hese outlets served a limited menu and lacked some of the amenities of larger stores. )n "##4, McDonalds signed a "2(year agreement with 'he >alt Disney !ompany. 'his agreement has led to the introduction of restaurants at Disney theme parks, and the promotion of Disney films through McDonald7s. 3ackaging is the primary source of advertising, along with the addition of limited edition products added to the menu. :6amples include 3ocahontas and 'he ?ion .ing. *ranchises 'he McDonalds !orporation is the largest worldwide franchised food service organisation. )n the "#42s, -ay .roc franchised restaurants for the low sum of 0#,2, demanding ".#C of sales. As the success of .roc and his organisation depended on the prosperity of the franchisees, this mutual interest was a key factor in McDonalds success. )n the ;SA, %5C of restaurants are owned and operated by franchisees. )n the ;., this figure lies at +ust over /2C, with ""# of the ,55 restaurants being franchised. )t is McDonalds intention that by the end of this year, franchised restaurants will represent over 12C of the total ;. business. McDonalds charge franchisees a levy on sales. 'his levy consists of a service fee of $C, and a rent charge of 5C. !learly, an increase in the number of franchised restaurants leads to the direct effect of an increase in McDonalds revenues. McDonalds can also boast that it is the largest retail property owner in the world. <uality, Service, !leanliness McDonalds use the finest available products and carefully developed formulae. 'hey also encourage their employees to check products that they prepare or serve. McDonalds believe that @cleanliness is a magnet drawing customers to their restaurantsA DMcDonald7s !rew &andbook "##4E, and therefore aim to ensure that their restaurants are spotless at all times, both inside and out. <uality and cleanliness, however, are wasted without fast, courteous service. McDonalds firmly believe that a smile does as much to bring a customer back as does the best food in the world. McDonalds always reminds its employees that the customer is the most important single factor in their business. 'hey also train their employees to treat everyone, especially the customer, in the way that they would want to be treated themselves. Mystery Diners, employed by the company, visit each store once a month checking that overall customer service re=uirements are met. McDonalds believe that through delivering great levels of <S!, D<uality, Service, !leanlinessE, "22C customer satisfaction can be achieved, enabling them to become the ;.s favourite =uick service restaurant. 'reatment of >orkforce McDonalds state that they value people most by beingF -eliable G )n doing what they say theyll do. Safe G )n operating practices which protect their customers, employees, and reputation. -esponsible G

)n making decisions which balance short, medium, and long term aspirations. !onsistent G )n their delivery of =uality, service, cleanliness, and value. 'rustworthy G )n their dealings with each other, their customers and their business partners. 'he ?eader G )n advancing their position by being innovative, fle6ible and goal orientated. !ustomer driven G )n listening and responding to their customer needs. :thical G )n their internal and e6ternal policies and practices. >ell -un G 'hrough visionary leadership and focused management. A Hood :mployer G )n recognising that their employees are the key to customer satisfaction. SourceF McDonald7s !rew &andbook "##4. 'raining )t is the aim of McDonalds to create a learning environment, which facilitates the development of the highest level of skill among all employees. 'heir training programmes have been designed to enable all employees to achieve the companys goals of "22C customer satisfaction, increased market share, and increased profitability. An ongoing programme of training evaluation enables McDonalds to keep training procedures up to date, and relevant to the needs of the business. McDonalds believe that training is the foundation of their success, and that it is an ongoing process that belongs to all of their employees. 'he uniform is an e6ample of standardisation, as there is little variation throughout the world. Different colours are used in certain countries due to religious circumstances. -ules and -egulations About $ times each year, each restaurant De6cluding franchisesE is checked rigorously by Area Managers, who make sure the crew and managers are carrying out operations correctly, as well as other general checks. Ince a year, a restaurant e6periences what is known as a Jfull field, where area managers, other restaurant managers, and trainee managers perform a comprehensive check on the whole operation. 'he results of these inspections are put into tables, and there is always fierce competition between stores with regard to scores received. :mployee -elations )t is McDonalds policy to actively promote from within. 3romotion is offered to employees who show initiative and a desire to advance. Many of McDonalds finest managers and senior company personnel have been promoted from crew. 'his way, skills are kept in the firm, with training costs minimised. McDonalds believe that people are their most important asset. ?oyalty and dedication are the foundation of every successful business, and McDonalds feel that they are especially fortunate in having so many highly skilled and motivated people. ?oyalty points are awarded to employees who reach certain service milestones. 'here is a catalogue called MaritB from which employees can redeem their accrued points in e6change for goods. 'his scheme gives employees an incentive to remain loyal to McDonalds, reducing training costs, and also improving efficiency. !rew meetings are held about once a month to discuss policy, procedures, products, and problems in the restaurant. Smaller sessions are also held a few times each year for the purpose of discussing ideas, suggestions and problems. 'hese sessions give employees the opportunity to make their views known to the company. 3rivate medical care is provided to employees who have worked in the company for 1 continuous years. ?ife Assurance is provided to

employees who have completed one years continuous service. 'o try and improve team(working skills and reduce the 42C staff turnover, McDonalds organise regular nights out and activities for its employees. McDonalds supports its employees through university, giving grants of up to K",22 per year depending on the type of course. )t also runs its own Lunior usiness Management 3rogramme for "%(/" year olds, with a starting salary of K"4,,22 per year. )t also offers its employees the opportunity to become part of the corporation through buying McDirect shares. Standardisation A key feature of the McDonald7s model is the manner in which all of their operations are standardised. 3roduction line techni=ues are implemented in restaurants to achieve the fast preparation of uniform =uality products. >ith a limited menu and patented formulas, the corporation ensures that products remain homogenous over distance and time. 'he fi6tures and fittings of restaurants are largely identical throughout the world, with minor variations to account for cultural differences. 'he McDonalds model e6erts an enormous amount of control over its franchisees and customers, forming the fundamental basis of the business. :mployees respond to customers re=uests with scripted =uestions, ensuring the fast delivery of service, and same e6perience time and time again. !ontrol over employees has been increased over the last decade due to technological advancements, such as :3IS D:lectronic 3oint of SaleE systems, which eliminates the need for the operator to use arithmetic, or remember prices. !ustomers are subtly controlled by the uncomfortable seating and standardised menus. 'his reflects the =uantitative aspects of the =uick(service food industry, increasing the number of customers by reducing idle time. Standardisation within the McDonalds model is apparent in both the restaurants and their suppliers. !ontractors are re=uired to share knowledge of food processing techni=ues, allowing the corporation to retain consistency and control of all aspects of the business. 'he )nfluence of McDonalds McDonald7s ob+ective is to become the ;.s favourite <uick Service -estaurant 'o do this, the company has set the following ob+ectivesF ". 'o provide total customer satisfaction /. 'o increase market share 1. 'o increase profitability :very day, McDonalds supplies food and drink to over /% million people worldwide, of which "./ million are ritons. Despite the limited choice 5C of Americans choose to eat there every day. 'he Holden Arches have become the best(known logo in the world. 8owadays, few children fail to notice the flamboyant red and yellow frontages that are located in most shopping centres and high streets throughout the country. McDonalds have realised that most people succumb to this convenient way of keeping children happy. McDonalds target the young. As their 5,2 page Iperations Manual states, @!hildren are often the key decision(makers concerning where a family goes to eat.A And, of McDonalds chief 3- strategy, the clown -onald McDonald, it said, @-onald loves McDonalds and McDonalds food. And so do children, because they love -onald. !hildren e6ert a phenomenal influence when it comes to restaurant selection.A McDonalds advised their marketing and advertising department to do everything they can to appeal to

childrens love for -onald and McDonalds. McDonald7s have very close relationships with their suppliers, even making sure that their different suppliers communicate with one another regarding procedures, and the introduction of new technology, in order for the McDonald7s corporation to ma6imise its profits through efficient operations. Inly the largest corporations can e6ert this amount of power over its suppliers, and therefore most companies could not adopt the McDonald7s model regarding its relationship with suppliers. !ulture Ine of McDonalds ma+or achievements was breaking through the food culture barrier. Most countries are eager to preserve their own specific culinary culture, however through successful global advertising, McDonalds operates /$,%22 outlets in "", countries. :gypt, .uwait, -ussia, and !hina have all been developed with the worlds largest restaurant situated in ei+ing, which has over 522 seats and "/22 staff. McDonalds has worked e6tensively on establishing franchises on a multinational scale. )n both Moscow and 9ugoslavia, the corporation had to set up the infrastructure in con+unction with governments to provide the consistent standard of restaurants found around the world. McDonalds is fully committed to becoming the global leader paying for the processing plants needed to supply these outlets. McDonalds has worked closely with franchisees around the world to allow them to customiBe outlets to cater for specific cultural needs. Mariations in menu are a key characteristic of cultural variety. )n much of :urope beer is served, and in America yoghurt, salads and piBBa are on the menu. Stores are also varied with restaurants ranging from small e6press outlets in 'okyo, where high retail costs put pressure on space, to the larger restaurants such as the 522 seat outlet in Moscow, which attracted =ueues of over a thousand people on its first day of operation. McDonald7s )nfluence on Society Different businesses and services have adopted a McDonalds style nickname. *or e6ample, in the ;SA, drive in dentists, which deal with minor problems, are known as McDentists. 'his shows that McDonalds has a reputation for speed, though it also gives evidence that McDonalds is thought of as a basic, simple service, which admittedly isnt too far from the truth. 'his is an e6ample of the McDonaldisation of society. 'he success of McDonalds can be attributed to efficiency, calculability, predictability, and control. McDonalds uses optimum methods of production, and also has an effective body of rules and regulations, which ensure highly efficient work. McDonalds also states @it provides the best available way to get from hungry to full.A DH. -itBer./222. 'he McDonaldiBation of Society. 3g 14E. !alculability can be measured by McDonalds emphasis on the =uantitative aspects of the products sold. @As a culture, we tend to believe that bigger is betterA DHeorge.-itBer./222. 'he McDonaldiBation of Society. 3g.#E. !ustomers are made to feel that they are getting a bargain, are therefore can +ustify spending their money on a particular item. 3redictability is a fundamental aspect of McDonalds success. )t gives the public assurance that products and services will be the same over time and in all vicinities. McDonalds have discovered that people have come to prefer a world of no surprises, and therefore try to make

the McDonalds e6perience as similar as possible, in terms of service and food. 'here are numerous advantages of adopting the McDonalds model. 8owadays, there is a wider availability of goods and services, which have a greater sphere of influence. )t is far more convenient for the public to obtain products and services, due to the increased number of outlets, and uniform =uality of goods and services. 'he McDonalds model has also brought about the availability to more economic alternatives to high priced customised goods. 'he introduction of =uantification now enables comparison to be made between goods and services, in terms of siBe. 'his society has adopted a Jbigger is better attitude. *inally, this new model has helped the establishment of e=ual treatment, regardless of race, class, or gender. 8aturally, there are disadvantages to this rational system employed by McDonalds. 'he first oversight being that this type of system constantly generates irrational conse=uences. 'he environment is becoming affected by chemicals, which are essential in order for the standardisation, uniform shape, siBe and =uality of the products desired in this modern society. Developing countries are also being put at risk by the effects of deforestation and defoliation. Disasters in Sudan and :thiopia can be attributed at least partly by the uncontrolled deforestation that is taking place. )t is also =uite ironic that some less developed countries, where most children are undernourished, are actually e6porting their staple crops as animal feed. 'his feed is then used to fatten cattle for the production of burgers for sale in developed countries. Millions of acres of the best farmland in underprivileged, developing countries are being used for developed countries benefit. McDonald7s has a direct involvement in this economic imperialism, which keeps most indigenous people deprived and hungry, while many whites become overweight. 'hirty(si6 out of forty of the worlds poorest countries e6port food to the ;SA, the most prosperous country. McDonald7s has also been condemned concerning misuse of resources. McDonald7s South American !attle consume "2 times the amount of grain and soy that humans do. If the "$, million tons of grain and soy that is fed to livestock, only /" million tons of meat and by(products are used. 'he waste is therefore "/$ million tons per year, which has a monetary value of 0/2 billion. 'his amount of money could be better used to feed, clothe, and house the entire world population for one year. !onclusion 'his essay has e6plained how the McDonald7s model has become a characteristic of the contemporary international economy, and has helped create thousands of +obs and improve many economies. &owever, each benefit has brought with it a drawback. 3eople in developing countries are starving, purely so that our developed society can be provided with e6cess food. !hemicals, necessary for the uniformity of its products, are destroying the environment and putting lives at risk due to increased nitrate levels. McDonald7s have also brainwashed a great number of people, including vulnerable young children, into believing that the McDonald7s e6perience is pain(free. ) feel that if other businesses decide to follow this model, the world could become too standardised, causing losses in national identities and cultural differences. 'he finest element of the

McDonald7s model lies in its rationality, and ) strongly feel that this aspect should be considered by businesses looking for a model to follow. &owever, as stated earlier, rational systems tend to generate irrational conse=uences, and it is the impact on society as a whole that a business must consider before adopting a similar code of practice. ) feel that if too many businesses follow this model, it wouldnt make the world a better place, but simply a bigger breeding ground for e6ploitation, pollution, and concealment. Bibliography Shook, !. N Shook, -. D"##1E G @*ranchisingF the business strategy that changed the world.A ?ondon. 3rentice &all. -itBer, H. D"##4E G @'he McDonaldisation of Society.A !aliforniaF 3ineforge 3ress. Daniels, L. ?. D"##1E G @McDonaldisation revisited. !ritical essays on consumer culture.A >estportF 3raeger 3ublishers. McDonald7s !orporation D"##4E G @!rew &andbook.A ?ondon. MicrosoftO :ncartaO D"###E. Microsoft !orporation. www.mcspotlight.org >ord !ountF 1"55