The Mcdonald`s Corporation

Being the world`s largest food service chain of fast food restaurants, the McDonald`s Corporation has territories all around the world and serves approximately 68 million customers on a daily basis in around 119 countries. McDonald`s operates over 32,000 restaurants worldwide. Headquartered in the United States, the company started in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald and in 2010, McDonald's revenue reached 24.5 Billion, with an estimated operating income of 7.4 billion. This company established itself in UK, Germany and Australia in the early 1970s.

As Valley (1995:15) says, ''McDonalds has become a symbol of the modernised global economy and one of the cheap lowest-common denominator it fosters- a system which we all use and yet in which, we all feel entrapped''.

In a recent article, "Which is the world's biggest employer" by Ruth Alexander where BBC declares the world`s biggest employers and compiles a list of the top ten, McDonald`s makes it into fourth position with 1.9 million employees. However, 80% of the restaurants are franchises so1.5 million of these people are employed by other companies although they all wear the uniform. 70 to 80 percent of the outlets worldwide are franchises, but the company owns 60 percent of the sites and they are freehold (Market research Europe, 1994). The immense amount of franchise restaurant does not indeed imply that the corporation has no control over their activities. In fact, it has already been argued that the McDonald's franchise system allows the corporation to keep extremely tight controls over its franchise operations (Royle 1999).

A British commentator, Martin Plimmer brings into light an essential fact: ''There are McDonald's everywhere. There is one near you, and there is one being built right now even nearer to you. Soon, if McDonald's goes on expanding at its present rate, there might be one in your house''. McDonald's has currently gained so much power that businesses have acquired nicknames starting with Mc. For example, "McDentists" and "McDoctors", meaning drive-in clinics that are prepared to deal with minor medical problems readily and adequately.

Ritzer's book, "The McDonaldization of the society", highlights the way McDonald exercises a high level of control as being one of the most essential aspects of its progress. Its employees are trained to perform a limited number of assigned tasks in a precise manner. This existing discipline is further strengthened by the technologies employed and the method in which the organization is created to maintain this control, entailing that managers and inspectors make sure that workers toe the line.

McDonalds and Recruitment For McDonalds, one of the most important aspects of the organization is its recruitment department. Applying for a job at McDonalds involves the same method that has to be undertaken whilst applying to any other corporation in the world. Applicants fill in an application form and if successful, they will be invited for an interview.

The average number of employees in a city centre restaurant is between 50-70. Most of the employees in McDonald's restaurants are teenagers and young adult aged between 18 to 24.Such large numbers of employees are due to the fact that most of them are employed part-time. However, every country has different rules and regulations and different pay structure and according to that, employees are hired full-time or part-time. For example, in Pakistan average salary for an adult working full-time in a McDonald's restaurant is around £100 a month. Therefore, in such places it is not necessary to hire part-time workers. In fact, there is no concept for part-time work in such places.

McDonalds operates within a strict hierarchy that differs very slightly across different countries. Hierarchy at both, senior management and operational levels is the same. Every restaurant has one manager with one or two assistant managers. Under them are a few floor managers and area leaders. The hourly-Paid Crew are on the third level of hierarchy.

Similar to the goal of other businesses, the main aim of McDonalds Corporation is profit making. To support this, the process of recruitment has been moulded accordingly. One of the reasons why McDonalds has never encouraged full time employment is to keep the wage level low and thus maintain its profit level. In most countries, part-time workers do not have access to company insurance and other majority of benefits (Perks) which are available to full-time workers. Any change which affects the pay and reward structure will never be introduced by McDonald's. This manner of recruitment entails incentives along with drawbacks for the firm. Due to a large proportion of the workforce based on teenagers working part-time, reward and pay structure for McDonalds has been considerably low as compared to if it would have hired full-time adults with permanent contracts. There is also a large percentage of migrant workers working for McDonalds for the same reason that they are willing to work for less pay and are much less demanding as compared to locals.

Herzberg (1959) discussed a two-dimensional paradigm of factors that affect people's attitudes regarding work. He concluded that such factors as company policy, supervision, interpersonal relations, working conditions and salary are all hygiene factors. Furthermore, he asserted that absence of hygiene factors can lead to job dissatisfaction but their existence does not motivate or create satisfaction. Instead, he stated that motivators were aspects that enriched a person's job. Five factors of job satisfaction include achievement, recognition, the work itself, responsibility and advancement. Herzberg concluded that the presence of these factors lead to long-term positive benefits while on the other hand, hygiene factors only result in short-term benefits.

If Herzberg's theory is applied to McDonald's employment relationships, the hygiene factors have been met. However, for the achievement of long run benefits, motivators need to be introduced. McDonalds appears to manage the employment relationship across societal borders in similar ways through prominently rigid rules and elaborated procedures and has adapted a rather paternalistic management style. In this way, McDonalds takes advantage of the weak and marginalised segments of the labour market and eliminate any workers who may question the managerial set up. Employees at McDonalds have very few chances of further advancement and receive negligible work recognition. Due to this reason, the labour turnover is relatively extremely high.

Therefore, although McDonald's has a low pay structure, its spending on training programs has recently reached high levels which uses up the savings achieved through its part time employee strategy. If Maslow's hierarchy of needs theory is applied to McDonald's, most employees are at the first stage (physiological) out of the five stages. McDonalds has improved its company policy to provide career opportunities that allow employees to develop their full potential. This includes comprehensive training programmes for crew and operations management and career progression that help a `first job` employee to progress through to a senior management position through merit-based promotions.

McDonalds and unions McDonalds and unions have always been at tug of war since the corporation started its operations, being inversely proportional to each other. One of the main reasons behind why McDonald's has always been against the presence of unions is because the existence of union implies higher wages, better working conditions, paid leaves, permanent work opportunity, considerable rights, chances for career advancement, retirement pension funds and in some cases, automatic recognition. In U.S restaurants, anyone who had an association with any trade union was dismissed immediately. There are several reports that discuss how during the 1970s, the corporation had also put applicants through a half-hour lie detector test, largely to determine whether or not they had any sympathy for trade unions. However, McDonalds never accepted that it used to conduct such tests. There were several cases in which unions have tried to show their presence in McDonald's restaurant's world over and have ended up either in lengthy and expensive law suits or corporation dismissing employees. In the worst scenario, it shuts down its franchises and more importantly even shuts down its operations in the whole country, simply to avoid the existence of unions. In the past, in order to accomplish its aim of hindering the presence of unions, the corporation has undergone every measure to completely bring unions to an end.

In Puerto Rico, McDonald's employees were unionised up to 1974, but the company was sold to a new franchisee. Following a dispute, McDonalds closed all its stores and stopped all its operations in Puerto Rico. In 1980, McDonalds reopened with a non-union labour. In 1979, in Germany, a letter was sent from the personnel department of McDonalds including strict instructions to the store manager to refrain from recruiting any union sympathisers. In the 1980s, there were disputes with the NGG union, and eventually the company signed a union agreement in 1990. In France in 1994, ten managers were arrested by the French authorities for infringing legal legislation and trade union rights. One of the most important and well-known case took place in Ireland. A seven month strike resulted in recognition of the ITGWU union. Former McDonald`s workers and union activists from the 1979 strike at two stores in Dublin, Anne Casey and Sean Mrozek, explained the existence of discontentment regarding low pay and poor working conditions. After the strike ended with a labour court commanding that McDonald`s should recognise the union, the main union activists were sacked or otherwise victimised for union activity. In 1985, two union activists achieved a victory at a labour court after claiming victimisation and immoral expulsion.

Therefore, findings suggest that McDonalds tried to operate without trade unions and used its preferred form of employee relations policies. In a number of European countries, sectoral level collective agreements were imposed on McDonalds but these failed to have a large positive impact on the corporation's mode of operation or the condition of workers. This resulted in bad publicity for the corporation.

In Germany, work councils have considerable protection in law. However, McDonalds has been searching for legal loopholes in most national systems despite supportive legislation. The corporation has minimised the impact of work councils through many avoidance strategies.

In the United States of America, where there is a minimal presence of trade unions, labour turnover is at its peak and wage is lower and more employed on a part-time basis with little access to company benefits. However, McDonalds has dealt with the issue of European trade unions over time. The corporation has responded to statutory mechanisms of worker participation, such as work councils and union delegates.

McDonalds states that it certainly believes that its company structure adequately fulfils the needs of its employees in all possible ways and that its management teams are accomplishing their tasks in much better manner. To decrease the critics, McDonalds introduced floor meetings in its restaurants in which assistant managers and floor managers discussed problems with the crew members on an ad-hoc basis. However, solutions to the problems would only be provided if employees worked in accordance with the company manual and employees were not given any authority in making decisions on a franchise level. All the major problems were forwarded to the restaurant managers who would then send those issues to the head office from where further instructions were given. However, employees complained that it was the same old system with no difference but just with a new "wrapping". However, in United Kingdom and Germany, the corporation has to some extent let unions be a part of their operations. In Germany, for example, where there does not exist any option apart from accepting the presence of unions, the corporation has to acknowledge the emergence of unions. One of the effects that can be noted is that in Germany there are more full time workers than in United Kingdom, where the presence of trade unions are comparatively weaker than in Germany. One of the reasons underlying why there are more full time and older employees in Germany is that the German workforce mostly consists of immigrant workers who are more motivated to earn and are less willing to complain. Furthermore, these workers risk their jobs since they are in a situation where McDonalds is the only job provider in case they fail to acquire any other jobs in the market. It can be said that the corporation provides opportunities to those people who are on the periphery of the labour market and are unable to seek access to other jobs in the market. By doing so, Mcdonalds becomes involved in their exploitation.

Conclusion

There are always two sides to a picture. Even though Mcdonald's policies are portrayed as being unsatisfactory and poor, yet they are successful and are seen as being the world's largest food chain in the foreseeable future. It is still one of the world's largest growing and recognizable brand. Its customers are loyal and do not discontinue going to their restaurants. From 2008 to 2010, McDonald's revenues grew by 5% and profits increased by a billion dollars. For long-run implications, dissatisfied employees possess low morale and could therefore bring about immense damage to the corporation as a whole. This sheds light on the importance to focus on monitoring employee satisfaction.

Currently, Mcdonalds pays considerable attention to the importance of the well-being of their employees in terms of long-run growth of the corporation and has started management programmes which could provide employees with career development and recognition. It has started providing employees company benefits and less stressful work schedules. The corporation is taking into consideration policies to pursue consistent growth, reflecting flexibility and the willingness to change what is wrong. Since the corporation continues to build on such policies, it will ultimately achieve endless success in terms of revenues, employee satisfaction, market share, brand recognition and customer satisfaction.

McDonald`s firmly believes that the success of the restaurants is achieved through the people it employs. The company aims to recruit the most excellent people, to retain them by offering continuous training relevant to their position and to promote them the moment they are prepared. Its recruitment policies, procedures and practices reveal the company`s dedication towards accomplishing its aim.

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