McDonalds Case Study

Introduction

This paper will address how McDonald's Corporation came to be as a company and where it is today in terms of growth, compensation, turnover and social strategy. It will then expound upon the corporate strategy and outline this in comparison to the human resource strategy. The text will include information and ideas on how McDonald's Corporation can reduce turnover and improve the human resource function based on the corporate strategy and goals and will discuss the human resource functions and issues that may arise as the company sets to expand its business to different cultures and countries.

Overview

Company Information

McDonalds is the world's largest fast food establishment that started as a drive-in restaurant in 1948. The drive-in restaurant began with brother's Dick and Mac McDonald in 1948, and under the direction of Ray Kroc, became a name in the world of franchises. Kroc opened the first McDonald's in Illinois and purchased the company from the McDonald brothers in 1961 for $2.7 million. The company has been growing rapidly and today has 31,000 restaurants (Anthony, Kacmar, & and Perrewe, 2010, p. 625).

Growth

McDonalds has gone through rapid expansion with a strategy for growth that focuses on the essentials of adding restaurants, obtaining the most profits from existing stores, and improving profits on an international basis. Credit for the unplanned expansion of the company can be attributed to the franchise owners and McDonald's selectivity in the selection process

The restaurant's menu is uniform, but keeps up with the different cultures depending on the country the franchise is housed.

McDonald's competition is international, national, regional, and local retailers of food products. McDonald's is known to compete for the quick service they provide factored in with price, convenience and by offering quality food and service (Anthony, Kacmar, & and Perrewe, 2010, p. 628).

Compensation and Turnover

Employees of the food chain are typically students and like other fast food establishments, they receive low wages; consequently, the turnover rate is extremely high. The executives, staff, and managers are able to participate in profit sharing and the company's strategy is to implement a high-energy culture in line with standardized procedures. The restaurant strives to maintain quality personnel and to reduce turnover. Hiring tools that reduce subjectivity in the selection process are used in the form of a questionnaire that predicts the ability to succeed in the business (Anthony, Kacmar, & and Perrewe, 2010, p. 629).

Social Responsibility

McDonald's Corporation sponsors the successful Ronald McDonald House Charities and houses, which reach out to sick children and their families and provide hope, encouragement and support to families, as well as the Hispanic American Commitment to Education Resource, which helps Hispanic students reach educational goals. The company supports education by providing tuition reimbursement and scholarship programs to employees as well as the community. They provide support to minorities in the workforce, and are stewards in the quest to keep the environment clean. The company reaches out again to the young, thorough providing support to students that exhibit environmental leadership qualities (Anthony, Kacmar, & and Perrewe, 2010, pp. 632-633).

Corporate Strategy

The company focuses on being the best employer, delivering operational excellence to its customers, to achieve growth through expansion and leveraging the company's strong points through innovation and technology. This is achieved through customer satisfaction, serving healthier foods and supplying nutrition information, along with additional menu items, diversity of menu items among the stores, and most importantly, focusing on children who have significant input in the family dining choice. Other strategies include the company's quest to involve unexploited markets and global expansion (Anthony, Kacmar, & and Perrewe, 2010, pp. 631-632).

Human Resource Strategy

Franchise owners and corporate stores are implementing processes to find workers by recruiting minorities to include the disabled, the elderly, and handicap personnel. Many franchise owners are offering crewmembers health benefits and extensive career development programs. Training for managers and franchise owners will often take place in the academic facility, Hamburger University in Oak Brook, Illinois. Youth are provided basic work instruction, and for those that show initiative, quick advancement is achievable. Advancing to corporate headquarters is also attainable as more than half of the company's top management started as crewmembers. McDonald's self-insures their benefits and sponsors profit sharing to include a 401 (k) plan, preferred provider insurance, educational assistance, sabbaticals, and childcare (Anthony, Kacmar, & and Perrewe, 2010, pp. 636-637).

Solutions

Comparison - Strategy

The corporate strategy is consistent with the human resource strategy. The company's focus to be the best employer and the human resource strategy reaches out to obtain the best employees, to hire and train them in their jobs and to reach out to the minority work force to include the aging, handicap and minority workers. Both the corporate and human resource strategies agree, but fail, as employees are evidently unhappy as evidenced by the high turnover rate.

The fact that the corporate strategy is diverse, and the organization strives to maintain a diverse workforce is an excellent concept. Training is stressed and McDonald's Corporation takes an interest in their employees, however there may be issues around the diverse cultures working together. Diversity causes complexity of communication so it will be necessary to provide training to develop communication skills. While employees are provided basic work instruction and can advance quickly, they should simultaneously receive education on how to maintain a positive environment among a diverse workforce.

In order for the corporate strategy to remain successful, the human resource strategy will need revision as corporate strategy takes on a new direction. Additionally, the human resource strategy must remain consistent with other departmental strategies to include finance, procurement, engineering, and marketing. The key process should remain flexible