MC DONALDS HRM CASE STUDY
Introduction
McDonald’s is a company which has a colourful 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 ’s (1995) 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. This roller coaster ride has largely been attributed to the leadership of ,
who has instituted strategic changes and made the Company soar once again.
Among the blows that McDonalds took was the obese-causing and loser-employer
issues. McDonalds has been hammered for providing people with unhealthy food that makes
them obese and is an indirect contributor to other health problems (, 2004). 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 ’s 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 ’s 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 (1997) 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 ( , 2003). 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
