(PDF) McDonaldization in India

Inter-culture issues of
McDonalds in India

INTRODUCTION...........................................................................................................................1
RECOMMENDATION:..................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Cultural differences are a set of beliefs, behaviour, practices and expressions ascribed to the
members of particular race, ethnicity or nation. For any successful international business there is
a need of understanding the role of culture which could in turn impact the profitability of
business. Mc Donald's is an American based fast food company, instituted in the year 1940 by
Richard and Maurice McDonald as a small restaurant. Currently, operating in more than 119
countries across the globe as a franchisee, affiliate or the corporation, serves around 68 million
customers everyday (Rancati, Gordini and Capatina, 2016). The franchise agent of the chain Ray
Kroc purchased it in 1955 and administered its growth across the globe. Mc Donald's while
operating globally is subjected to cultural differences and to overcome these it has to adapt and
adopt various strategies which are discussed in detail in the case study. The study focuses on
identifying intercultural issues and appropriate business solutions are suggested to overcome the
impacts of intercultural issues.
Case Scenario:
McDonalds is one the fast food restaurants in the world which conduct business in many
countries including UK. Today it has near about 32,000 restaurants in approximate 119 countries
whereby 75% of them are owned by individual owners. It serves products to more than 47
million customers per day. Being the best serving organisation, the main mission of this
company is to become world’s best quick service restaurant (Smith, 2014). To achieve this
mission, it provides outstanding services, best quality of products, cleanliness and value of
business to customers. It indicated that there is no change in quality and standard of its fast food
products all over the globe, taste and freshness of all, are same everywhere in all countries. In
terms of business strategy, main goal of McDonalds is to gain 100% satisfaction of its customers
and as well as keep retention of them for longer period. In this regard, to achieve this goal, in
international market, it has formulated various strategies and policies. Along with this, core
competency of McDonalds is giving convenience when customer wants to eat its products. It
also offers eatables on competitive price which provide best value to customers’ money.
Since every nation has its own culture and tradition, which reflects a unique pattern of
society. Therefore, to enter into a new marketplace especially of new nation, it is necessary for
organisations to focus on social and cultural difference. As per current scenario, McDonalds
want to expand its business in India which is a combination of various communities and
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societies. The reason behind this is that India consider as large eating out market where people
spend huge money on tasty and savoury eatables (Baack, Harris and Baack, 2013). This would
provide a great opportunity to McDonalds to grab its marketplace and generate high revenues.
But to serve fast food products as per Indian taste is the biggest challenge in front of this
company. In addition to this, to serve fast food products in this country, managers of McDonalds
need to evaluate culture and preference of native people. There is a big difference between
traditional culture of people of UK and India. In terms of fast food products, people used to eat
mostly on occasions like birthday events, business parties etc. rather than on regular basis.
Therefore, concerning on this point and other aspects on international business expansion, aid
McDonalds in building effective strategies by which it can attract minds of new customers.
Working in International Teams
Cultural differences are a set of patterns which are distinct to every society or ethnicity or
nation, such as the beliefs, behaviour, expression of thoughts etc. After the advent of
globalisation the cultural differences have become all the more important because the
understanding and knowledge about culture is primary for succeeding in any business
irrespective of the size and sector of an organisation. The profitability of an organisation is
directly impacted by the culture of the place of business. Mc Donald's is a chain of fast food
restaurant headquartered in California, USA and was founded in the year 1940 by the McDonald
brothers initially dealing in hamburgers. The business was then bought by Ray Kroc, who joined
the chain as a franchisee and saw its expansion across the globe (Dibb and Simkin, 2013). The
company has a presence across the globe as it is running business in around 119 different
countries and serving around 68 million customers on daily basis. The company predominantly
deals in hamburgers and various types of sandwiches and variety of other products such as,
french fries, soft beverages and desserts. Different countries have different menus resulting in
deviance from the standard menu, for instance, in India beef and pork are not served because of
the cultural values of the place. Mc Donald's is also serving soups, rice, sea food and beer in
certain countries depending on the cultural value and according to the foods prevalent in that
region.
India is one of the fastest growing economies in the world and is witnessing a global
inclination of businesses with various foreign companies investing in India. While doing
business in India could be beneficial for the international organisations but at the same time there
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are a number of cultural issues which cannot be left unnoticed. In context of Mc Donald's the
cultural issues posed while operating in India are many as India is a mix of various cultural
diversities which are as follows:
 Language – there are 22 official languages recognised by the law in India and
Hindi is the most common and widely spoken and Mc Donald's has to keep in
mind that language should not be a hurdle in understanding perspectives
(Griffitts, 2016). This will be considered as a barrier among the employees
working within the outlet which comes from different culture if they belong from
different continents. One of the major impact which can be identified is on their
understanding and capability of sharing information and ideas which has direct
negative impact upon their individual and organisational performance.
 Religion – though the changing lifestyle patterns of the people has made the fast
food industry evolve in India but still Indian society is rooted in traditions and
various religious beliefs. Mc Donald's has should be sensitive towards the
religious beliefs in order to manage business in India, for instance, beef burger is
not offered in India because cow is considered to a sacred and holy. As the most
of the people in India are Vegetarian so, there is quite difficult for McDonald to
sustain their market with the help of non vegetarian dishes. In this regard, they
have to focus on market needs and requirements of local people and try to
innovate in their offerings to match up and provide their best in the market.
 Values and Customs – as India is a mix of cultures there are varied range of
values and customs possessed by the people. Since the belief system of people is
so varied Mc Donald's might find it difficult in analysing its objectives.
Therefore, it has to come up with attractive promotions to attract customers.
There are different type of cultures are prevail within the nation and every
individual have their different values and ethics according to which they perform
their daily functions (Lane, 2015). This will result in conflicts in near future
which reduces the overall productivity of an outlet and negatively impacts their
sustainability and profitability.
 Aesthetics – the people in India value home cooked food and traditional food and
there are many food joints offering local delicacies with spicy and vegetarian
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food, similarly, Mc Donald's should focus on the setting a traditional menu over
the standard menu.
 Concepts of time – India has a different poly chronic culture, meaning thereby
the attitude of people about punctuality is a bit relaxed here and the priorities are
changed according to importance, therefore Mc Donald's has to go through a
cultural awareness training in order to understand Indian concept of time and
build a strategy for dealing with it (Babin and Zikmund, 2015).
 Building relationships – in India people tend to set business on trust and
intuitive feeling by stressing more upon cultivating relationships, therefore, Mc
Donald's has to understand the strategy rather than straightly rushing into the
business.
Hofstede Cultural Dimension Theory:
This theory is developed by Geert Hofstede which gives a framework of cross-cultural
communication. It has provided a six dimensional model which allows organisations who want
to expand business in international market, to make comparison between cultures of different
nations (Pappas, 2017). It includes Power Distance Index (PDI); Individualism v/s Collectivism;
Uncertainty avoidance; Masculinity v/s Felinity; Long-term v/s Short-term orientation and
Indulgence v/s Restraint. These dimensions entail the effects of society culture on strategies and
functions of organisations which deal in international market. As per current scenario, as
McDonald has already conducted its business at global level but in order to enter into Indian
Market, it needs to concern on various factors. It includes cross-culture, preference, culture,
living standard and more. To analyse these factors according to Hofstede Cultural Dimension
theory, an analysis has been done on culture difference of UK and Indian Market in following
manner:-
Individualism Versus Collectivism: This stage of Hofstede model categories culture on the
basis of strengths and weakness of the people within the community. It is divided into two types
that are Individualism and collectivism. In relation to McDonalds, the company is planning to
expand its business in India where they will face certain problems related to the culture. As per
observation, it has been identified that India is country of multi-culture where people uses
different languages and religion in their daily basis living life. Here, according to this dimension
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of Hofstede overall community of the country is divided into two parts (Hofstede Culture
Dimensional Theory, 2018). Both of them are described as below:
 Individualism: In this, the community gives more priority to their work. As employees of
this culture do not give much preference of company and its work. Instead of this, they
highly give importance to their personal work. In addition to this, people belongs to this
culture are conscience about their own privacy and freedom. They also work hard to gain
high rewards by agreeing for challenges. It can be said that they believes in giving respect
to other individual along with this they also demand for the same. In context to
McDonald, if the company wants to expand their business then they are required to
initially understand actual type of employees and the culture from which they are
belonging. After this identification, it will be easier for the company to persuade its
employees by availing them their desired working environment and workplace.
 Collectivism: On the other hand, collectivism culture states that in this employees as well
as organization both gives importance on building relationship as well as skills with each
other. This is done for the purpose of gaining long term benefit for both. In this, a mainly
employee believes in earning high profitability ratio by giving equal importance to their
colleagues by giving them opportunity to perform their work well with more effective
efforts. This helps in building positive relation among employees at work place and also
results in minimum execution of issues and conflicts in working environment. In relation
to McDonald’s, it can be said that this kind of people is more effective and beneficial as
culture of chosen country shows more relevancy towards the collectivism (Pike, 2015).
As people of this country are giving more importance to the human relations so that they
can perform their work smoothly with healthier relations.
Power Distance Index (PDI): In this dimensions people gives more priority to the one
who owns power. Here, cultures of the countries are categorized on the basis high power and
Low level of powers. In relation to McDonald, the company is very much popularize and is
known by maximum people across the world. This company is expanding its business in India.
Hence, it is important for its management team to give importance to evaluate cultural factor of
the country. In context to the India, the country is Low in the power index of culture. As it
follows hierarchical system and owns centralized organizations. It will be helpful for the
company to expand its business in this country so that they can also delegate their responsibility
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among employees. In addition to this, they also involve employees in decision making process as
they are the only one who will be affected by the same after execution of decision in working
practices.
Masculinity versus Femininity (MAS): This dimension of Hofstede models of culture
categories it on the basis of Masculinity and Femininity. High range of masculinity in culture
states that people living in the country have more ego and they highly prioritise status. Along
with this, people of the masculinity give more preference to money as with this they can fulfil
their demand and needs both (Cavusgil and et. al., 2014). On the other hand, culture belongs to
femininity gives preference to relationships and mainly focuses on the quality of their life. In
relation to the McDonald, the company is new for culture of India. Hence, it is important for
them to the initially build their relationship with people living over there. It includes
collaboration with the team mates so that employees can perform their job role by coordinating
with colleagues. High level of femininity is beneficial for the McDonald, as this company is
expanding its business in the India. According to culture of India, people of this country are
prioritising its customers so that they can establish their business effectively. It will also
contribute in enhancing growth rate of the company for long duration of time.
Uncertainty Avoidance Index (UAI): In this dimension of Hofstede theory, it is
important for McDonald to evaluate actual culture of the India. It is divided into two types that
is high range of degree of Uncertainty avoidance Index and low range of degree of Uncertainty
avoidance Index. In relation to India, the country is High in this index as the people live in this
country are free to express and share their experience as well as anger with the other people .
Along with this, people of India are allowed to take their own decision without compromising
with each other. They are even allowed to change their decision according to the requirement of
country as well as market. It will be beneficial for McDonald, as they can expand their business
easily and can also discuss and share their polices with the employees in order to implement
them effectively. Along with this, they can even change or formulate new policies according to
the requirement of business.
Pragmatic Versus Normative (PRA): In this dimension of Hofstede, it has been
identified that culture of people belong to same country varies on the basis of every individual
(Baker and Magnini, 2016). Here, it has been identified that people are mainly of two types that
is pragmatic and normative. It can be said that pragmatic people are the one who do not like to
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communicate much. Instead of this prefers to perform their own work without involving much
people in it. On the other hand, normative people give more priority to their work and gives
importance to their own values and rights.
RECOMMENDATION:
There is a huge difference between UK and Indian market where American like to eat
healthy foods and people of India on savoury and tasty eatables. India has a large marketplace
which is considered as second most populous country in the world. Here people belong to
different culture and various traditions. McDonald serves a wide variety of fast food products
including vegetarian and non-vegetarian. But to enter into Indian market, this company needs to
develop a new menu which includes a line of vegetarian items and match with local taste and
preferences. According to survey, it has believed that India is only country where people are high
religious and bounded by traditions. They do not eat any kind of beef or pork items therefore,
McDonald needs to develop its new menu as per tradition of this nation. Along with this, in order
to overcome from cultural issues, it has recommended to McDonald to build effective strategies
and policies as per Indian market. Further, it needs to provide different sections for dealing with
vegetarian and non-vegetarian food products till it serves to Indian customers. In addition to this,
even ice-creams and milk-shakes or other soft-serves should made egg-less as well as only
vegetable oil used for cooking process. Along with this, spices and herbs which are used for
making burgers, aloo-tikki and other items should be mixed as per Indian taste.
India is a versatile country. With a total of 29 states and a population of more than 1.3
billion, it is an amalgamation of people with different cultures and mindsets. McDonald’s, to
effectively establish its business in India, must focus on these cultural aspects. There are many
factors which could help McDonald’s easily set up its business in India. One of these major
factors is considering religious sentiments of the people of the country. Majority of people living
in India are Hindus, who worship cows and gives important various other animals. McDonald’s
must avoid using any beef or pork products in their items to respect their religious sentiments.
The second major factor is the taste of people of India. India is a land of rich spices, and people
never hold themselves back of using these spices in their dishes. McDonald’s too must focus on
such use of spices to develop taste in their products according to the preference of Indians. The
third on perhaps one of the crucial factors for McDonald’s to establish itself in India is that
people in the country are divided as vegetarians and non-vegetarians. However, there has been a
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shift amongst customers to go vegetarian; still there are many customers who prefer non-
vegetarian food. This issue can be a major factor which could influence its success in Indian
markets. McDonald’s must focus on establishing different kitchens in their outlets along with
different utensils to prepare these foods separately. Emphasis should also be given on packaging
of these products for customers to distinguish between the two.
Furthermore, to run business successfully, the main role is played by employees who help
in giving best services to customers. With this assistance, McDonalds need to give employment
to high skilled workers who are experienced in dealing with people belong to different-different
culture. The staff must be trained properly to serve the customers according without behaving in
manner that could hurt their cultural beliefs. Such practices would allow them to build strong and
positive perception about the company and would help McDonald’s to be a local leader in the
country. In order to deal with Indian people, it is suggested to managers of this company to adopt
Autocratic Management Style. One of the main reasons behind this is that at peak period
(occasions) where high foot of customers are seen at restaurants, this style of management help
in quick decisions. This would help to ensure that people receives the best services at restaurants
in short interval of time. Giving fast services on occasional period like on Diwali, Christmas and
other festival time, McDonalds will get opportunity to achieve its set mission. Furthermore,
another reason for adopting autocratic management style by managers of McDonalds is that it aid
to provide best training to staff members. The people who are better trained in certain tasks will
help McDonald in giving fast to customers at busier times.
As McDonalds has operated business on global level so, different cultures are present
within its business. In this regard, to build effective team, its managers are needed to follow Task
Culture for developing high collaboration between employees of different culture. Along with
this, it is also recommended that managers and leaders of McDonald’s should follow situation
leadership as most of the companies in modern world that are dealing in food and beverage
sector like restaurants are using this leadership only. This can help organisation main in making
right decisions on correct time and whenever it is required for making any changes. McDonald’s
can make alterations as per the requirements on the basis of this leadership while performing
tasks like serving to consumers at the restaurant and so on. This leadership style has been
recommended because on a regular basis many of consumers do comes in the restaurants for
having food. It has been analysed that they may consist with different moods and culture.
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Therefore, following this type of leadership might help organisation in performing tasks even
when customers and other employees are having different cultures. Apart from this, following
this type of recommended leadership can help McDonald's in gaining ample number of
competitive advantages which might help organisation main in reaching to its goals in specific
and set time frame. On the other hand, it has also been recommended for this organisation to
recruit employees and at the same time when they are having different cultures train them
accordingly so that at they can easily contribute their level of capabilities with each other. This
would help both organisation and employees in making effective relationships while having
different cultures.
CONCLUSION
From this assignment, it has examined that intercultural differences poses a major challenge
for organisations when it comes to global business management. Therefore, while managing
business across continents there are certain barriers which are faced by the companies such as,
language barriers, cultural backgrounds, perceptions etc. While talking about the global business
management of Mc Donald's it could be witnessed that the cultural understanding plays a crucial
role for successful launch of a product in that particular place while it also helps in marketing
and publicity of the product. Therefore, organisations are required to build effective strategies
and policies by concerning on cross-cultural aspects. This would help in overcoming from issues
which may develop when a company moves its business international market.
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REFERENCES
Books & Journals
Baker, M.A. and Magnini, V.P., 2016. The evolution of services marketing, hospitality
marketing and building the constituency model for hospitality marketing. International
Journal of Contemporary Hospitality Management. 28(8). pp.1510-1534.
Cavusgil, S.T., and et.al., 2014. International business. Pearson Australia.
Baack, D.W., Harris, E.G. and Baack, D., 2013. International marketing (Vol. 3). Sage.
Babin, B. J. and Zikmund, W. G., 2015. Exploring marketing research. Cengage Learning.
Dibb, S. and Simkin, L., 2013. Marketing essentials. Cengage Learning.
Griffitts, M., 2016. Human resources marketing and recruiting: Essentials of internship
management. Handbook of Human Resources Management, pp.103-118.
Lane, P., 2015. Human resources marketing and recruiting: essentials of employer branding.
Handbook of Human Resources Management, pp.1-30.
Pappas, N., 2017. Effect of marketing activities, benefits, risks, confusion due to over-choice,
price, quality and consumer trust on online tourism purchasing. Journal of Marketing
Communications. 23(2). pp.195-218.
Pike, S., 2015. Destination marketing: essentials. Routledge.
Rancati, E., Gordini, N. and Capatina, A., 2016. Conceptualizing and Measuring Content
Marketing in Luxury Firms: An Exploratory Analysis. In Global Marketing Strategies
for the Promotion of Luxury Goods (pp. 109-132). IGI Global.
Smith, A., 2014. Breaking the chain: The screen industry and disintermediation. Metro
Magazine: Media & Education Magazine, (182), p.104.
Online
Hofstede Culture Dimensional Theory. 2018. [Online] Available through<
https://www.mindtools.com/pages/article/newLDR_66.htm>.
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