This paper examines McDonald's Corporation's human resource management practices within the context of its broader corporate strategy. It covers the company's segmented global structure, cost leadership and differentiation approaches, and workforce motivation through reward and recognition schemes. The paper also explores McDonald's international leadership development programs — including LAMP and regional LDPs — and their role in sustaining competitive advantage in emerging markets. Additionally, it addresses key operational challenges the company faces, such as high employee turnover, health-conscious consumer trends, intense competition, and the reputational pressures associated with minimum wage debates and franchise labor practices.
McDonald's Corporation is one of America's largest fast food and burger chains, involved in franchising and operating restaurant chains worldwide. Given its immense operational base, the company has been subdivided into four segments: the U.S. segment; the High Growth Market segment; the Lead Global Market segment; and the Corporate and Foundational Market segment. The first division handles fast food outlets and delivers smartphone apps for orders and promotions. The second division is responsible for operations in Britain, Australia, France, Canada, and Germany. The third is tasked with franchise expansion and outlet operations within China, Korea, the Netherlands, Italy, Poland, Switzerland, Spain, and Russia. The final corporate division handles the company's administrative functions.
First launched on April 15, 1955 by Raymond Albert "Ray" Kroc, the company's current headquarters is located in Oak Brook, Illinois. The company's primary offerings include cheeseburgers, hamburgers, fries, carbonated drinks, chicken-based foods, breakfast items, milkshakes, desserts, and wraps (Forbes, 2017).
The company operates using a corporate approach grounded in functional excellence and business development. Rigorous development plans are applied to foster continuous expansion and innovation. Associated strategic goals shape McDonald's functional activities, particularly in reacting to economic shifts and rivals' strategies. Market shifts pressure McDonald's — as they do all companies — into adjusting or changing its approaches. The company therefore alters its general and concentrated development plans over time to guarantee long-run sustainability (Hess, 2010).
Cost leadership represents the chief generic strategy and objective of McDonald's. As Porter explains, this broad strategy entails minimizing costs in order to provide offerings at affordable rates. McDonald's is one example of an inexpensive fast food provider whose menu is comparatively less expensive than Arby's and other rivals. However, the company also banks on extensive differentiation as an auxiliary generic policy; this approach entails product and business development in a way that affords the company distinctiveness relative to competitors. Its McCafé range is one clear example of broad differentiation effectively implemented (Gregory, 2017).
The second tactical goal connected with the cost leadership approach is vertical integration. The company, for instance, runs manufacturing units that produce homogenous ingredient mixes. Additionally, product innovation has been closely associated with broad differentiation (Gregory, 2017).
McDonald's workforce reflects the company's effective adoption of schemes — including benefits and rewards — that increase worker engagement and motivation. Employees express satisfaction with compensation as well as other aspects of the employment experience. By maintaining consistency between its corporate approach and its reward scheme, McDonald's has increased both productivity and performance. This corporate alignment was achieved by directing the workforce toward five key components of an enriched client experience, and by bringing the company's recognition approach in line with these principles (Crawford, 2015).
McDonald's incentivizes and promotes desirable behavior through a couple of bonus schemes within its company-owned outlets. Mystery shopping results are used to award a 50p-per-work-hour bonus (over a fortnight) every month to every individual working in its top ten percent of outlets. Competitive goals are attained via the company's benefits structure. While it maintains a flexible benefits program, the company does not operate a rigid annual enrollment plan (Crawford, 2015).
Any firm that offers personnel development and training initiatives profits in several important ways. First and foremost, team and individual competencies are enhanced. Secondly, training facilitates the transmission of corporate knowledge, which aids tactical goal accomplishment. Training carries additional advantages as well: personnel become more satisfied with their jobs and thus more motivated to perform at their best; cost-effectiveness increases; the workforce is better positioned to adapt to change; inventiveness and initiative are promoted; and personnel turnover decreases through employer brand reinforcement and organizational value proliferation (Latukha, 2016).
"Training benefits and five-element client experience strategy"
"LAMP and regional LDPs across global markets"
"QSC&V standards, talent retention, and workforce metrics"
"Turnover, health trends, competition, and regulatory pressure"
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