Analyzing McDonald's Business Strategies and Challenges

The article provides a detailed analysis of McDonald’s various strategic aspects affecting its global business operations. It discusses the company’s organizational structure as reported by Panmore in 2017, highlighting its extensive hiring practices using platforms like Snapchat, according to ...Read More

0Running head: PEOPLE AND ORGANISATIONS
People and Organisations

1PEOPLE AND ORGANISATIONS
Executive Summary
McDonald’s is one of the world’s largest fast-food chains which operate in more than 119
countries. The human resource frame of McDonald's focuses on various factors including
recruitment, retention, training, development, compensation and many others. The human
resource department of McDonald's has established an efficient recruitment procedure to
ensure that only skilled employees are selected in the organisation. The company also uses
multiple sources of recruitment to widen their scope of recruitment. The training and
development programs of McDonald's provide necessary training to managers and workers
which assist them in smoothly operate the daily operations.
There are a few weaknesses in McDonald’s human resource frame which is difficult to
overcome by the company. The employee turnover rate is considerably high which increases
the expenditure in the corporation. Many employees behave rudely with customers which is
detrimental to McDonald’s reputation. The human resource department also finds it difficult
to implement modern technology into their operations. To overcome these weaknesses,
McDonald's can implement various strategies. These can improve their salary packages to
attract and retain talented workers. They can improve their training programs and use modern
technology to enhance the productivity of their workers.

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Table of Contents
Introduction................................................................................................................................3
McDonald’s Incorporation.........................................................................................................4
Strengths of McDonald’s Human Resource Frame...................................................................4
Specialised Training for Managers........................................................................................4
Effective Recruitment Procedure...........................................................................................5
Multiple Sources of Hiring.....................................................................................................5
Employees Training Programs...............................................................................................6
Employee Benefits.................................................................................................................6
Diversity in Workforce..........................................................................................................6
Weaknesses of McDonald’s Human Resource Frame...............................................................7
Rude Behaviour of Workers...................................................................................................7
High Employees Turnover Ratio...........................................................................................7
Difficulty in Finding Talented Workers.................................................................................7
Lack of Competence to Change.............................................................................................7
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
A corporation’s human resource frame focuses on the requirements of peoples along with
their skills, duties, values, interests, and interactions in the organisational environment.
Human resource frame includes various activities relating to the management of human
capital in an organisation, such as recruitment, retention, training, development,
compensation and many others. The corporations with highly efficient and productive
employees are required to effectively manage various aspects of their human resource capital,
such as motivation, required training, avoiding conflict, proper protection of interest and
many others. To improve the productivity of its human resource capital, the management is
expected to commit to the individual learning, direction, supervision, and motivation to
ensure optimal results. This report will focus on analysing the strengths and weaknesses of
“McDonald’s” based on its human resource frame. Further, the report will provide
recommendations to overcome the shortcomings in order to improve human resource process
and achieve business sustainability.

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McDonald’s Incorporation
McDonald's in an American fast food chain which was founded in 1940 in San Bernardino,
California. The company is one of the world’s largest fast-food chains which serve around 69
million customers in a day in over 100 counties. As of December 2016, McDonald's is
situated in more than 36,900 locations, headquarter of the company is located in Illinois,
United States. In 2016, the corporation has revenue of US$24.622 billion, and they have more
than 375,000 employees (McGrath, 2017). McDonald's in one of the most prominent brand
worldwide, and it is known for its key attributes relating to financial soundness, social
responsibility, people management quality of product/services and the ability of management.
The daily business operations require hierarchy in commands as it is a fast food chain and
they are known for their quick services (Alheritiere et al., 2013).
The job structure in McDonald’s restaurants in divided into three parts, restaurant workers,
corporate staffs and franchise owners. A McDonald’s restaurant in prime location hire around
50 to 65 peoples for operating its activities, and the restaurants serve for 24*7 each week. The
crew members constitute as the entry-level position, and it represents a maximum number of
workers, most of the crew staff is part-time workers, and their salary packages are low
(Thompson, 2017). The first managerial position is “swing managers” as per the corporate
structure of McDonald's, although their salary package is slightly higher than crew members.
The highest paid post is assistance managers in a McDonald’s restaurant, and there is only
one assistant manager per restaurant. According to Badkar and Lubin (2012), one in every
eight workers in the United States are employed in McDonald's, most of them include
teenagers. The company is famous worldwide due to the high quality of products, efficient
services, a way of management and affordable prices, which corporation achieve by
implementing an effective human resource management strategy.
Strengths of McDonald’s Human Resource Frame
Specialised Training for Managers
The human resource department of McDonald's is significantly serious regarding the training
of its managers. For training their managers more professionally, McDonald's has its training
program called Hamburger University. It is a 130,000 square foot facility established in Oak
Brook, Illinois by McDonald's to provide training to its managers (Fawad Latif, 2012). The

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university teaches various courses and practices which are required for restaurant
management to perform their tasks efficiently. There are more than 80,000 mid-managers,
owners and restaurant managers graduated from the university. The employees receive
training from around 32 hours in the first month, and there are more than 5,000 students
enrolled every year. This initiative shows the seriousness of human resource management
towards managers’ training which helps them develop and efficiently manage the operations
of the business (Gould, 2010).
Effective Recruitment Procedure
McDonald’s human resource department has implemented an efficient recruitment structure
which assists them analysing the potential candidates and hire the most suitable employees
from corporation’s growth. The candidates can fill an online application form along with a
quiz for recruitment through online platform; the restaurants also accept walk-in candidates.
There are five “vital ingredients” on which those human resource executives analyse
candidates which are value & respect, friendly nature, welcoming personality, interest in the
job and smooth customer interactions (Qureshi and Hassan, 2013).
The company invests heavily in recruitment staff to ensure that the candidates are selected
wisely and as per the corporation’s requirements. The main advantage of McDonald’s
recruitment policy is that it allows each restaurant to hire their employees, that means most of
the workers are locals and makes the recruitment procedure easier. Many young people under
the age of 20 preferred McDonald's like the first job and contributed to around 60 percent of
the restaurant staff. These strategies allow McDonald's to hire potential candidates who assist
in smoothly managing the daily business operations (Nadolny and Ryan, 2015).
Multiple Sources of Hiring
McDonald’s have multiple sources of recruitment including colleges, placement agencies,
online websites, walk in, and many others. The variety of sources allows the company to
reach and attract a large number of qualified workers; it is beneficial for the HR executives
because they can choose from many applications. McDonald's prefer to high young and fewer
experiences students because they did not demand high salaries and most of their works are
non-technical. According to Taylor (2017), to target young candidates, McDonald's has
decided to use social media application called Snapchat since it is popular between young
generations. The candidates can send their form for a summer job through Snapchat which

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attracts a large number of peoples. These innovations assist HRD to hire potential candidates
for right job which benefits the corporation.
Employees Training Programs
Training is one of the biggest strength of McDonald’s restaurants which assist them in
improving their employees’ abilities and gaining competitive advantage. McDonald’s
restaurants consider it employees their biggest asset and focus on selecting best of candidates
in each restaurant and train them to ensure a high level of customer’s satisfaction (Latif, Jan
and Shaheen, 2013). After the completion of the recruitment procedure, the unqualified
applicants are provided necessary training to improve their working and productivity. The
training primarily focuses on improving the interactions and productivity of employees to
assist in achieving organisational objectives and generate high revenue. The company has
implemented “on the job” training where the new and existing employees work along with
each other to learn their operations. The “on the job training” effectively enables the
employees to learn more skills as they work alongside experienced workers.
Employee Benefits
Human resource department must decide and negotiate compensations of employees which
include salary packages, bonuses, incentives and others. The rewards schemes are an integral
part of McDonald’s business because it motivates the workers. McDonald’s crew level staff
salary is low, but they provide attractive incentive schemes (Keep and James, 2012). The
rewards systems are based on the performance of workers which motivates them to improve
their productivity for higher benefits. As per Neal Blackshire, winner of Employee Benefits
Professional Award 2014 and the rewards manager of McDonald's, the business strategy
should have an effective incentive scheme since it assists in achieving organisational goals
faster. The company treat each employee as an equal individual and promote gender equality
in the workplace.
Diversity in Workforce
According to Singh (2010), McDonald's deeply incorporated diversity policies into their
business structure to avoid discrimination against employees based on gender, race, caste,
colour and religion. The company serves in more than 119 to a wide variety of customers
from different cultures and backgrounds, the HRD ensure that employees did not discriminate
between the customers.

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Weaknesses of McDonald’s Human Resource Frame
Rude Behaviour of Workers
There have been many cases reported by McDonald’s customers in which the employees
conducted rude or unfriendly behaviour. It has become difficult for human resource
department to solve these problems since the number of employees is significant high
(McDonalds. Even after providing sufficient training, it is difficult for HRD to control the
behaviour of employees since human nature is volatile and affected by various factors. The
brand image of McDonald's is adversely affected due to the negative conduct of employees
which reduce its growth in the market.
High Employees Turnover Ratio
Retention of workers is one of the primary challenges for McDonald’s human resource
department. There are several factors due to which McDonald's employee turnover ratio is
high, for example, most of the workers are young who join the job as a part-time work while
studying in college or summer job. After the completion of their studies, they prefer to leave
the job (Yuece, 2012). The ill-tempered manager is one of the key factors of high employee
turnover in McDonald's; the workers did not prefer to work for managers with rude or short-
tempered attitude. Other elements are low salary packages offered by the company;
McDonald's provide considerably low salary packages to their workers which did not
convince them to keep their job for a long time (Valax, 2012). The high employee turnover
increases the expenditure for McDonald's since it increases their recruitment and training
costs.
Difficulty in Finding Talented Workers
McDonald's is situated in a larger number of areas in the world, and the human resource
department finds it difficult to find talented employees with friendly behaviour in bucolic
areas. Each franchise owner conducts the recruitment procedure, and many of them did not
do a good job in selecting qualified workers (Mathe, 2011). The bad attitude and work of
employees reduce the reputation of McDonald's as a brand since each franchise represents its
values.
Lack of Competence to Change
Many experts believe that the human resource structure of McDonald's did not change as per
the change in marketing policies. The HRD staff is old fashioned which creates various

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problems for the growth of the company. The company is not able to update their services
and products as per the latest technology, which gives their competitors a competitive
advantage. For example, Burger King has introduced a paperless recruitment process
throughout their restaurants which assist in creating faster and simpler recruitment process
(Sardar and Talat, 2015). The human resource department is still using traditional methods of
recruitment whereas other competitors are implementing modern technology for their
advantage. As per the research of Carter, McDonald’s profits are decreasing due to their
inability to implement modern technology into their processes such as cooking, drive-thru or
human resource management.
Recommendations
Following are few suggestions that McDonald's can implement in order to overcome the
shortcomings of its human resource department:
 Establishing an efficient salary structure is a prime requirement for the company since
it will reduce their employee turnover ratio. Other salary structure should provide
better salary packages other than their incentive schemes which will attract qualified
workers in the organisation.
 Implementation of modern technology into various processes, including human
resource frame, because it can reduce the time and improve the result of the
recruitment process.
 The training programs of McDonald's are the primary strength of its human resource
department, but they are requiring improving their process to ensure that employees
have a positive attitude towards their job. Proper supervision in each restaurant is also
necessary to ensure that employees are not behaving rudely with customers.

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Conclusion
To conclude, the human resource frame of McDonald's has various strengths and weaknesses.
The primary strength is their training program which ensures that managers and employees
are able to perform their job with efficiency. The recruitment process of McDonald's is
significantly effective, and they use multiple sources to hire employees. The company
promote and support diversity in their workplace and strongly oppose discrimination based
on race, caste, colour, or gender. Along with various strengths, there are few weaknesses in
McDonald's human resource frames, such as rude behaviour of employees to the customers
and considerably high employee turnover ratio. The operation of McDonald's spread
throughout the world, therefore, the HRD find it difficult to hire talented employees in many
bucolic areas. The lack of HRD ability to adopt the latest technology into their operations is
another weakness of the company. To avoid these issues, McDonald's can give effective
salary packages to attract employees. They can also improve their training process and
implement modern technology to overcome their weaknesses.

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References
Alheritiere, A., Montois, S., Galinski, M., Tazarourte, K. and Lapostolle, F., 2013.
Worldwide relation between the number of McDonald's restaurants and the prevalence of
obesity. Journal of internal medicine, 274(6), pp.610-611.
Badkar, M. and Lubin, G., 2012. 18 Facts About McDonald's That Will Blow Your Mind.
Business Insider. Retrieved from < http://www.businessinsider.com/19-facts-about-
mcdonalds-that-will-blow-your-mind-2012-4?IR=T >
Fawad Latif, K., 2012. An integrated model of training effectiveness and satisfaction with
employee development interventions. Industrial and Commercial Training, 44(4), pp.211-
222.
Gould, A.M., 2010. Working at McDonalds: some redeeming features of McJobs. Work,
employment and society, 24(4), pp.780-802.
Keep, E. and James, S., 2012. A Bermuda triangle of policy?‘Bad jobs’, skills policy and
incentives to learn at the bottom end of the labour market. Journal of Education
Policy, 27(2), pp.211-230.
Latif, K.F., Jan, S. and Shaheen, N., 2013. Association of Training Satisfaction with
Employee Development aspect of Job Satisfaction. Journal of managerial sciences, 7(1).
Mathe, K., 2011. The Effects of Franchisee Gender on Consumer Perceptions of Performance
and in Quick Service Restaurants.
McGrath, M., 2017. World's Largest Restaurant Companies, 2017: McDonald's Slips While
Darden Makes Gains. Forbes. Retrieved from <
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companies-2017-mcdonalds-slips-while-darden-makes-gains/#486455ef3822 >
Nadolny, A. and Ryan, S., 2015. McUniversities revisited: a comparison of university and
McDonald's casual employee experiences in Australia. Studies in Higher Education, 40(1),
pp.142-157.

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Qureshi, A. and Hassan, M., 2013. Impact of performance management on the organisational
performance: An analytical investigation of the business model of McDonalds. International
Journal of Academic Research in Economics and Management Sciences, 2(5), p.54.
Sardar, R. and Talat, M.A., 2015. What managers believe as important while recruitment in
fast food industry within Norway: A case study of Burger King and McDonalds (Master's
thesis, University of Stavanger, Norway).
Singh, A., 2010. McDonald's Makes Diversity About the Bottom Line. Forbes. Retrieved
from < https://www.forbes.com/sites/csr/2010/09/08/mcdonalds-makes-diversity-about-the-
bottom-line/#2bc0114e506a >
Taylor, K., 2017. McDonald's is planning to hire thousands of workers using Snapchat.
Business Insider. Retrieved from < http://www.businessinsider.in/McDonalds-is-planning-to-
hire-thousands-of-workers-using-Snapchat/articleshow/59113233.cms >
Thompson, A., 2017. McDonald’s Organizational Structure Analysis. Panmore. Retrieved
form < http://panmore.com/mcdonalds-organizational-structure-analysis >
Valax, M., 2012. Beyond McDonald's CSR in China: Corporation perspective and report
from case studies on a damaged employment reputation. Asian Business &
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Yuece, I., 2012. SWOT Analysis of McDonald’s and Derivation of Appropriate Strategies.