McDonalds Corporation

McDonald's Corporation

The case study describes the McDonald's Corporation as an international restaurant company with approximately 31,000 restaurants. The corporation has an overwhelming majority of the market share with its core business fast-food burgers. In the United States the McDonalds Corporation has compiled a wide-margin between this business segment and its competitors. In addition McDonald's is also the largest employer of youth in the United States. The international employment by McDonald's is an average of 1.5 million worldwide. The fast food restaurant and the 1.5 million employees serve approximately 43 million customers per day.

The customers are served by two different business models. The McDonalds Corporation business model reflects two restaurant ownership methods. The first and predominate ownership method is by franchise. This ownership method accounts for approximately 60 percent of the restaurants. The remaining 40 percent of the restaurants are owned and operated by the McDonald's Corporation. The franchisee are independent restaurant owner - operator. However McDonald's requires specific policies and procedures to be strictly adhered to by the franchisees. The policies and procedures are integrated to assure a general uniformed quality product in the worldwide restaurants (franchised or corporate owned). Unfortunately recently even with the uniformed quality products and service the current profit margins and growth in the United States market have stagnated.

With the stagnate market in United States the McDonald's Corporations strategy was adjusted aggressively. The corporate strategy turned to expanding into the international markets. This global market expansion and stagnate U.S. market created a demand for new human resource strategies and leadership/management. The new human resource strategies will need to support the overall core corporate strategies as stated in the McDonald's Corporation case study:

"(1)To be the best employer for its people in each community around the world, (2) to deliver operational excellence to its customers in each of its restaurants and (3) to achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonalds systems through innovation and technology."

The human resource strategies developed by the corporation have been developed over several generations of corporate leadership. The corporate leadership has consistently been developed from an existing pool of internal staff. The process of developing the internal leadership is called "McFamily." The McFamily corporate leadership has designed and developed an expansive human resource strategy. (Hakala, 2008) "Succession planning is a key factor in reducing a company's risk exposure, improving morale and productivity and planning for future growth. It should permeate the organization from top to bottom, constantly seeking out internal leadership and cultivating the next generation of management." The McDonalds Corporation has a very successful internal promotional program. The majority of the leadership within the company has evolved through the McFamily process.

This extensive internal leadership promotional process potentially could have created a lack of vision and environmental scanning within the corporation. This staff development process could be outdated with a corporation that is expanding rapidly throughout the globe. In order to adapt to the global cultures and associated markets the McDonald's Corporation should increase and enhance its cultural boundaries observations. "Boundary Spanning. The process of scanning the environment in an effort to link the organization to its environment" (Anthony, Kacmar, & Perrewe', 2010). The human resource strategies will be required to adjust to the globalization efforts. These global human resource strategies will need to be customized to the specific international regional markets. However the new global human resource strategies will need to remain constant and woven into with the core corporate strategies.

Developing corporate strategies with an organization that has developed-raised leadership through internal promotions could also be contributing to the significant employee turnover within the labor force. The internal leadership growth process is an effective moral, motivational and succession tool. However the balance between internal leadership growth and allowing a mixture of other industrial leadership (outside perspective) could be limiting the success of the corporate and human resource strategies. In addition the self-perpetuating incubation of corporate leadership may also be effecting the decisions to grow and or retract the business. The views and decisions on growth and retrenchment could be achieved by a very narrow leadership perspective. "Growth/retrenchment objectives may be expressed in terms of sales, market share, asset size, return on investment, development of new products and services or selling off product lines, and development of new markets or abandonment of markets" (Anthony, Kacmar, & Perrewe', 2010). With the core corporate leadership being develop from the internal group the innovation and vision of strategy may not be reaching its desired potential.

In order to increase the level of innovation and visioning the corporation could consider diversifying the corporate leadership and/or employ an external organizational development practitioner to assist in identifying additional strategies and visioning potentials. (Anderson, 2012) "Today's organizations are experiencing an incredible amount of change. Organizational development is a field of academic study and professional practice that uses social and behavioral science knowledge to develop interventions that help organizations and individuals change successfully." With an external consultant group (international) the corporation will achieve a higher level of visioning, innovation, perspectives and an ability to develop and effectuate better strategies. (Tomasko, 1987) "Encouraging innovation also requires that corporations tolerate diversity and nurture mavericks."