FREE ESSAY ON DOES MCDONALD'S OFFER A MODEL WHICH OTHER BUSINESSES SHOULD FOLLOW?

DOES MCDONALD'S OFFER A MODEL WHICH OTHER BUSINESSES SHOULD FOLLOW?

Does McDonald's 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.
McDonald's is now the international market leader for fast food, and has been ever since
its pioneering first restaurant was launched in San Bernardino, California in 1948. 
Historical Background
The original founders of McDonald's, and the fast-food concept, were brothers Dick and
Mac McDonald. In 1948, they modified their drive-in restaurant, creating the standard for
the contemporary fast-food restaurant of modern times. From the introduction of a limited
menu of just nine items, and by focusing on efficient production and service, the
brothers were able to halve the price of their hamburgers to 15 cents. Ray Kroc, who, at
this time was a 52-year-old milkshake machine salesman, heard of the brothers' generation
of around $350,000 in annual revenues, and instantly became convinced that its concept
could work in other cities. Kroc became the first franchisee appointed by the McDonald
brothers, and opened his first restaurant the following year in Des Plaines, Illinois. In
1961, Kroc bought all the rights to the McDonald's concept from the McDonald brothers for
$2.7 million. Kroc was somewhat of an obsessive individual, fixated with rules,
regulations, procedures, and obedience to his strict rules of discipline. Kroc was
especially concerned with maintaining McDonald's 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 1960s, McDonald's invested a great deal of capital into advertising and
marketing campaigns. In 1962, the golden arches were adopted as its corporate logo, with
the introduction of Ronald McDonald as its mascot arriving the following year. In 1965,
McDonald's Corporation went public, and by 1966 was listed on the New York Stock
Exchange. In 1967, its first restaurants outside of the United States were opened in
Canada and Puerto Rico. 1968 saw the introduction of the company's flagship product, the
Big Mac. Throughout the 1970's, McDonald's became involved with a lot of charity work,
establishing its own charity called the Ronald McDonald House, providing temporary
housing for the families of seriously ill children. Kroc had always believed in giving
something back to the community in order to make the world a better place. In 1973,
McDonald's added breakfast items to its menu. The Quarter Pounder was introduced in the
subsequent year, as sales reached $1 billion. 1974 saw the opening of the first
restaurant in the UK, in Woolwich, South London. In 1975, McDonald's introduced
"drive-thru" window service, which allowed motorists to order and receive food from their
cars. Nowadays, this type of business accounts for around half of all McDonald's sales in
the United States. In 1983, Chicken McNuggets were added to the menu, giving customers an
alternative to beef. Founder Ray Kroc died in 1984. Ronald McDonald Children's Charities
was founded in his remembrance to raise funds in support of child welfare. In 1989,
McDonald's became listed on the Frankfurt, Munich, Paris, and Tokyo stock exchanges.
Through the 1990s smaller outlets known as "Express" stores were opened in hospitals,
zoos, airports, and even on ferries. These outlets served a limited menu and lacked some
of the amenities of larger stores. In 1996, McDonalds signed a 10-year agreement with The
Walt Disney Company. This agreement has led to the introduction of restaurants at Disney
theme parks, and the promotion of Disney films through McDonald's. Packaging is the
primary source of advertising, along with the addition of limited edition products added
to the menu. Examples include Pocahontas and The Lion King. 
Franchises
The McDonald's Corporation is the largest worldwide franchised food service organisation.
In the 1960's, Ray Kroc franchised restaurants for the low sum of $950, demanding 1.9% of
sales. As the success of Kroc and his organisation depended on the prosperity of the
franchisees, this mutual interest was a key factor in McDonald's success. In the USA, 87%
of restaurants are owned and operated by franchisees. In the UK, this figure lies at just
over 20%, with 119 of the 577 restaurants being franchised. It is McDonald's' intention
that by the end of this year, franchised restaurants will represent over 30% of the total
UK business. McDonald's charge franchisees a levy on sales. This levy consists of a
service fee of 4%, and a rent charge of 7%. Clearly, an increase in the number of
franchised restaurants leads to the direct effect of an increase in McDonald's' revenues.
McDonald's can also boast that it is the largest retail property owner in the world.
Quality, Service, Cleanliness
McDonald's use the finest available products and carefully developed formulae. They also
encourage their employees to check products that they prepare or serve. McDonald's
believe that "cleanliness is a magnet drawing customers to their restaurants" (McDonald's
Crew Handbook 1996), and therefore aim to ensure that their restaurants are spotless at
all times, both inside and out. Quality and cleanliness, however, are wasted without
fast, courteous service. McDonald's firmly believe that a smile does as much to bring a
customer back as does the best food in the world. McDonald's always reminds its employees
that the customer is the most important single factor in their business. They 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 requirements are met. McDonald's
believe that through delivering great levels of QSC, (Quality, Service, Cleanliness),
100% customer satisfaction can be achieved, enabling them to become the UK's favourite
quick service restaurant. 
Treatment of Workforce
McDonald's state that they value people most by being:
Reliable - In doing what they say they'll do. 
Safe - In operating practices which protect their customers, employees, and reputation.
Responsible - In making decisions which balance short, medium, and long term
aspirations.
Consistent - In their delivery of quality, service, cleanliness, and value.
Trustworthy - In their dealings with each other, their customers and their business
partners.
The Leader - In advancing their position by being innovative, flexible and goal
orientated.
Customer driven - In listening and responding to their customer needs.
Ethical - In their internal and external policies and practices.
Well Run - Through visionary leadership and focused management.
A Good Employer - In recognising that their employees are the key to customer
satisfaction.
Source: McDonald's Crew Handbook 1996.
Training
It is the aim of McDonald's to create a learning environment, which facilitates the
development of the highest level of skill among all employees. Their training programmes
have been designed to enable all employees to achieve the company's goals of 100%
customer satisfaction, increased market share, and increased profitability. An ongoing
programme of training evaluation enables McDonald's to keep training procedures up to
date, and relevant to the needs of the business. McDonald's believe that training is the
foundation of their success, and that it is an ongoing process that belongs to all of
their employees. The uniform is an example of standardisation, as there is little
variation throughout the world. Different colours are used in certain countries due to
religious circumstances.
Rules and Regulations
About 4 times each year, each restaurant (excluding franchises) is checked rigorously by
Area Managers, who make sure the crew and managers are carrying out operations correctly,
as well as other general checks. Once a year, a restaurant experiences what is known as a
'full field', where area managers, other restaurant managers, and trainee managers
perform a comprehensive check on the whole operation. The results of these inspections
are put into tables, and there is always fierce competition between stores with regard to
scores received. 
Employee Relations
It is McDonald's policy to actively promote from within. Promotion is offered to
employees who show initiative and a desire to advance. Many of McDonald's' finest
managers and senior company personnel have been promoted from crew. This way, skills are
kept in the firm, with training costs minimised. 
McDonald's believe that people are their most important asset. Loyalty and dedication are
the foundation of every successful business, and McDonald's feel that they are especially
fortunate in having so many highly skilled and motivated people. Loyalty points are
awarded to employees who reach certain service milestones. There is a catalogue called
Maritz from which employees can redeem their accrued points in exchange for goods. This
scheme gives employees an incentive to remain loyal to McDonald's, reducing training
costs, and also improving efficiency. Crew 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. These sessions give employees the opportunity to make their views known to the
company. Private medical care is provided to employees who have worked in the company for
3 continuous years. Life Assurance is provided to employees who have completed one year's
continuous service. To try and improve team-working skills and reduce the 60% staff
turnover, McDonald's organise regular nights out and activities for its employees.
McDonald's supports its employees through university, giving grants of up to ?1500 per
year depending on the type of course. It also runs its own Junior Business Management
Programme for 18-21 year olds, with a starting salary of ?16,500 per year. It also offers
its employees the opportunity to become part of the corporation through buying McDirect
shares.
Standardisation
A key feature of the McDonald's model is the manner in which all of their operations are
standardised. Production line techniques are implemented in restaurants to achieve the
fast preparation of uniform quality products. With a limited menu and patented formulas,
the corporation ensures that products remain homogenous over distance and time. The
fixtures and fittings of restaurants are largely identical throughout the world, with
minor variations to account for cultural differences. 
The McDonalds model exerts an enormous amount of control over its franchisees and
customers, forming the fundamental basis of the business. Employees respond to customers'
requests with scripted questions, ensuring the fast delivery of service, and same
experience time and time again. Control over employees has been increased over the last
decade due to technological advancements, such as EPOS (Electronic Point of Sale)
systems, which eliminates the need for the operator to use arithmetic, or remember
prices. Customers are subtly controlled by the uncomfortable seating and standardised
menus. This reflects the quantitative aspects of the quick-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. Contractors are
required to share knowledge of food processing techniques, allowing the corporation to
retain consistency and control of all aspects of the business. 
The Influence of McDonalds
McDonald's objective is to become the UK's favourite Quick Service Restaurant
To do this, the company has set the following objectives:
1. To provide total customer satisfaction
2. To increase market share
3. To increase profitability
Every day, McDonald's supplies food and drink to over 28 million people worldwide, of
which 1.2 million are Britons. Despite the limited choice 7% of Americans choose to eat
there every day. The Golden Arches have become the best-known logo in the world.
Nowadays, few children fail to notice the flamboyant red and yellow frontages that are
located in most shopping centres and high streets throughout the country. McDonald's have
realised that most people succumb to this convenient way of keeping children happy. 
McDonald's target the young. As their 750 page Operations Manual states, "Children are
often the key decision-makers concerning where a family goes to eat." And, of McDonald's
chief PR strategy, the clown Ronald McDonald, it said, "Ronald loves McDonald's and
McDonald's food. And so do children, because they love Ronald. Children exert a
phenomenal influence when it comes to restaurant selection." McDonald's advised their
marketing and advertising department to do everything they can to appeal to children's
love for Ronald and McDonald's. McDonald's 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 McDonald's
corporation to maximise its profits through efficient operations. Only the largest
corporations can exert this amount of power over its suppliers, and therefore most
companies could not adopt the McDonald's model regarding its relationship with
suppliers.
Culture
One of McDonald's major achievements was breaking through the food culture barrier. Most
countries are eager to preserve their own specific culinary culture, however through
successful global advertising, McDonald's operates 24,800 outlets in 115 countries.
Egypt, Kuwait, Russia, and China have all been developed with the worlds largest
restaurant situated in Beijing, which has over 700 seats and 1200 staff. McDonalds has
worked extensively on establishing franchises on a multinational scale. In both Moscow
and Yugoslavia, the corporation had to set up the infrastructure in conjunction 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 customize
outlets to cater for specific cultural needs. Variations in menu are a key characteristic
of cultural variety. In much of Europe beer is served, and in America yoghurt, salads and
pizza are on the menu. Stores are also varied with restaurants ranging from small express
outlets in Tokyo, where high retail costs put pressure on space, to the larger
restaurants such as the 700 seat outlet in Moscow, which attracted queues of over a
thousand people on it's first day of operation.
McDonald's Influence on Society
Different businesses and services have adopted a McDonald's style nickname. For example,
in the USA, drive in dentists, which deal with minor problems, are known as McDentists.
This shows that McDonald's has a reputation for speed, though it also gives evidence that
McDonald's is thought of as a basic, simple service, which admittedly isn't too far from
the truth. This is an example of the McDonaldisation of society.
The success of McDonald's can be attributed to efficiency, calculability, predictability,
and control. McDonald's uses optimum methods of production, and also has an effective
body of rules and regulations, which ensure highly efficient work. McDonald's also states
"it provides the best available way to get from hungry to full." (G. Ritzer.2000. The
McDonaldization of Society. Pg 36). Calculability can be measured by McDonald's emphasis
on the quantitative aspects of the products sold. "As a culture, we tend to believe that
bigger is better" (George.Ritzer.2000. The McDonaldization of Society. Pg.9). Customers
are made to feel that they are getting a bargain, are therefore can justify spending
their money on a particular item. Predictability is a fundamental aspect of McDonald's'
success. It gives the public assurance that products and services will be the same over
time and in all vicinities. McDonald's have discovered that people have come to prefer a
world of no surprises, and therefore try to make the McDonald's experience as similar as
possible, in terms of service and food. There are numerous advantages of adopting the
McDonald's model. Nowadays, there is a wider availability of goods and services, which
have a greater sphere of influence. It is far more convenient for the public to obtain
products and services, due to the increased number of outlets, and uniform quality of
goods and services. The McDonald's model has also brought about the availability to more
economic alternatives to high priced customised goods. The introduction of quantification
now enables comparison to be made between goods and services, in terms of size. This
society has adopted a 'bigger is better' attitude. Finally, this new model has helped the
establishment of equal treatment, regardless of race, class, or gender. 
Naturally, there are disadvantages to this rational system employed by McDonald's. The
first oversight being that this type of system constantly generates irrational
consequences. The environment is becoming affected by chemicals, which are essential in
order for the standardisation, uniform shape, size and quality 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 Ethiopia can be attributed at least
partly by the uncontrolled deforestation that is taking place. It is also quite ironic
that some less developed countries, where most children are undernourished, are actually
exporting their staple crops as animal feed. This 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. McDonald's has a direct involvement in this economic imperialism, which keeps
most indigenous people deprived and hungry, while many whites become overweight.
Thirty-six out of forty of the world's poorest countries export food to the USA, the most
prosperous country. McDonald's has also been condemned concerning misuse of resources.
McDonald's South American Cattle consume 10 times the amount of grain and soy that humans
do. Of the 145 million tons of grain and soy that is fed to livestock, only 21 million
tons of meat and by-products are used. The waste is therefore 124 million tons per year,
which has a monetary value of $20 billion. This amount of money could be better used to
feed, clothe, and house the entire world population for one year.
Conclusion
This essay has explained how the McDonald's model has become a characteristic of the
contemporary international economy, and has helped create thousands of jobs and improve
many economies. However, each benefit has brought with it a drawback. People in
developing countries are starving, purely so that our developed society can be provided
with excess food. Chemicals, necessary for the uniformity of its products, are destroying
the environment and putting lives at risk due to increased nitrate levels. McDonald's
have also brainwashed a great number of people, including vulnerable young children, into
believing that the McDonald's experience is pain-free. I feel that if other businesses
decide to follow this model, the world could become too standardised, causing losses in
national identities and cultural differences. 
The finest element of the McDonald's model lies in its rationality, and I strongly feel
that this aspect should be considered by businesses looking for a model to follow.
However, as stated earlier, rational systems tend to generate irrational consequences,
and it is the impact on society as a whole that a business must consider before adopting
a similar code of practice. I feel that if too many businesses follow this model, it
wouldn't make the world a better place, but simply a bigger breeding ground for
exploitation, pollution, and concealment. 
Bibliography
Shook, C. / Shook, R. (1993) - "Franchising: the business strategy that changed the
world." London. Prentice Hall.
Ritzer, G. (1996) - "The McDonaldisation of Society." California: Pineforge Press.
Daniels, J. L. (1993) - "McDonaldisation revisited. Critical essays on consumer culture."
Westport: Praeger Publishers.
McDonald's Corporation (1996) - "Crew Handbook." London.
Microsoft? Encarta? (1999). Microsoft Corporation.
www.mcspotlight.org