Globalization and HRM Strategies

Globalization and HRM strategies

A recurrent buzzword in the modern day business community is represented by globalization, which is understood as a phenomenon by which the boundaries of countries become less strict and they allow people, resources, capitals and the economic, political, cultural, technological and other elements to easily move from one location to the other. In this complex setting, the economic agents have transcended boundaries in order to benefit from the comparative advantages of other regions, but also in order to address wider customer markets.

Fast food giant McDonald's is the epitome of business success within the global market place, with a presence in over 100 countries across the globe. At this level, the focus falls on the means in which the company operates within the international community, with emphasis on human resource management, the international business strategy or the potential improvements to international human resource management.

Company description

McDonald's was founded in 1940 in San Bernardino, California, by brothers Richard and Maurice McDonald. Today, the company is on the list of the 500 most powerful and profitable companies in the world, with revenues of over $8 billion in 2011 alone (McDonald's Website, 2013). The organization employs an estimated 400,000 individuals worldwide and has attained high levels of corporate success as a result of its complex business strategy. This, for instance, integrates:

The launching of franchising operations which allow them to share risks and capitalize on the expertise of the local entrepreneurs

The customization of the international menus to fit local needs and cultures, such as the serving of beer in Germany or salmon dishes in Norway

Sustained investments in the company's image, including the addition of healthy choices on the menus (Mourdoukoutas, 2012).

3. HRM and globalization at McDonald's

The human resource strategy of McDonald's is one based on the inclusion of all members within the culture of the firm. The company as such seeks to create a pleasant and stimulating working environment for its employees, and this effort is obvious not only within the United States, but also across the entire chain of international operations. The employer trains its employees in the practical aspects of the job, as well as in the integration within the firm. The company also places increased emphasis on the development of the employees, and presents them with opportunities for career development, such as training programs, flexible working schedules so that they can finish their studies, opportunities for promotion into middle management and so on.

With the massive expansion into the global market place, the human resource strategy at the company has been impacted at multiple levels. The more notable examples in this sense include the following:

The increasing emphasis on diversity management, as the result of the company's operation in a more culturally diverse environment.

The employment of culturally diverse staffs in order to bets appeal to the culturally diverse customers.

This effort has been obvious not only at the levels of employee inclusion, but at the level of business decisions, since McDonald's in now the company with the most numerous franchises owned by women and various minority groups (Pride, Hughes and Kapoor, 2006).

4. McDonald's international business strategy

The business strategy implemented by McDonald's within the global market place is normally similar to the one implemented in the United States, revolving primarily around the satisfaction of the needs and wants of customers. At a more business specific level, the strategy for international expansion has included an intense focus on emerging markets, as these revealed potential for increased demand for the company's products. Additionally, emphasis has been placed on the enlargement of the menus so that they respond to the new emergent needs of the society (e.g. The need for healthier food options), but also to the needs of the local customers.

"Traditionally, McDonald's international strategy was about adapting its U.S. model to local conditions. Increasingly, McDonald's is using local differentiation as a basis for worldwide adaptation and innovation through transferring new menu items and business concepts from one country to another" (Grant, 2010).

In other words, the company seeks to maintain its core business model, which has ensured it long-term success so far, but also to adapt it to the traits of the local markets. Basically, what the company does is to seek a perfect balance between the globalization of its business model and the standardization of its strategies based on the features of the various local markets.

5. Recommendations for improvement

McDonald's approach to international human resource management is rather vast, integrating elements such as cultural diversity and inclusion, as well as the stimulation of employee performance through compensation, benefits and the support for their professional development.

Still, from a critical standpoint, the company has sometimes been accused of overworking its staff members, and paying them low wages. Such low wages are common within the fast food jobs, but they raise even more complex issues when they are offered to already poor people, in developing countries.

"Complaints from employees range from discrimination and lack of rights, to understaffing, few breaks and illegal hours, to poor safety conditions and kitchens flooded with sewage and the sale of food that has been dropped on the floor" (McSpotlight).

In order to avoid these issues with international human resource management, it would be necessary for the company to invest more in the formation of managers from the local communities. These managers would operate the franchise operations across the globe with the thorough implementation of the corporation's business model, yet would also pay attention to local features, such as employment legislations, expected level of salary, employee grievances and so on.