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McDonalds Corporation Case Solution

Solution Id Length Case Author Case Publisher
1762 4663 Words (19 Pages) Marne L. Arthaud-Day, Frank T. Rothaermel McGraw-Hill Education : MH0037
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Workforce and employees is the most important asset of any business and it is really important to ensure that they are motivated and committed to the organization. Motivation can come from the values followed and practiced by the organization among other things. And two of the most important values that must be prioritized and believed in are “Equality” and “Employee diversity”. Both the concepts are based on the foundation of respect so they promote fair treatment of and attitude towards every single employee without any regard given to the age, class, gender, religion, race, sexual orientation, disability, and nationality. Hence, no discrimination of any sort is neither promoted nor approved. When there are employees from various backgrounds, it means that there are diverse ideas, talents, and thinking capabilities. This leads to problem-solving in lesser time due to ‘cognitive diversity’ as per Harvard Business Review research in 2017 (Reynolds & Lewis, 2017).

Following questions are answered in this case study solution

  1. Introduction

  2. About McDonalds

  3. Benefits of Equality and Diversity

  4. McDonald’s workplace diversity approaches

  5. McDonalds equality approaches

  6. Conclusion

  7. Recommendations

Case Analysis for McDonalds Corporation

The following report highlights the benefits of equality and employee diversity in the workplace before providing a brief overview of the case company which is McDonalds. Furthermore, it also includes the analysis and evaluation of the approaches taken by McDonalds towards diversity and towards equality. The thorough analysis is followed by a suitable closure and a list of recommendations for the organization on the basis of it.

2. About McDonalds

McDonalds was initiated by a brother and sister in 1940 in California as a hamburger place. The logo was launched in 1953 in Arizona and the small fast food company turned into a franchise chain. If the company is viewed in terms of revenue, then it is the biggest restaurant chain globally. The revenue generated in 2017 was 22,820 million USD$. Approximately, 69 million customers are served globally in more than 37 thousand outlets that span across more than 120 countries (Chicago Tribune, 2015). According to research, McDonalds also stands in top 5 when it comes to largest employer ranking globally with almost 1 million employees in 2018 out of which 120,000 are in UK alone (Stimage, 2018). The most important goal of the company is to deliver excellent food for good value in an ambience that is joyous, playful and affectionate. Other aims that closely follow the one mentioned are paying back to society by being a socially responsible organization and generating exceptional returns for the shareholders of the company. Currently in UK, there are around 1,300 McDonald’s restaurants and 1,100 of these are operated as a franchise (McDonalds, 2019e).

There are 3 major values that the company adheres to:

  • Responsible Leadership: McDonalds is dedicated to utilize the scale and size of its operations for something outstanding. It wants the same excellence for its people, for the industry in which it is operating and for the valuable planet Earth. This is achieved through limiting to just essential ingredients and through being conscious about the nutrients added; through minimizing the waste produced and ensuring that the raw materials are acquired from an ethical supplier; through assisting the less fortunate and by through setting an example of fair and equitable employer (McDonalds, 2019a). 

  • Progressiveness: Innovation is really imperative in today’s dynamic market so one of the values of McDonalds is to keep believing in new ideas, to implement new techniques and to incorporate recent inventions within the business model. An example is the drive thru method of serving which currently generates 70% of revenue in United States (Patton, 2015). 

  • Local Integration: McDonalds is currently operating in 120 countries but it adapts to the culture and fulfils the needs of each country remarkably. This is one of the reasons why it is so successful. Most of the time, the restaurants are owned and run by the locals which makes the community happy (McDonalds, 2019a).

On the financial side, McDonalds earned profit of approximately US$5.2 billion and generated revenue of around US$22 billion in 2017 (McDonald's Corporation, 2017). Currently, the company’s share price in the stock market is approximately $214. 

i. McDonalds HR Values

The success of McDonalds is not just the result of innovation, operational practices, market insights, and competitive strategies but also the human resource strategies that are practiced in the company globally. There are 4 major principles for the human resources that are followed with immense commitment by every individual in the organization. The principles are derived from the overall corporate values and they are:

  • Respect and Recognition: All the employees are treated with honour and dignity and are not treated on the basis of their position in the company or background. Every individual is respected and everyone’s good work is recognized and appreciated (McDonalds, 2019b).

  • Values and Leadership: All the employees know the goals, objectives, and principles of the company so they always act in the best interest of the organization. Moreover, ideas and opinions are welcomed and listened to. All the messages are communicated in the most effective manner so that employees are aware of the significance of their part of work in achieving the goals (McDonalds, 2019b).

  • Competitive Pay and Benefits: In order to keep employees motivated and to prevent dissatisfaction, wages are similar to or higher than the market wages. Also, there are several benefits for employees such as life insurance, vacations, and recognition programs etc. (McDonalds, 2019b).

  • Learning and Development : A lot of importance is given to the career progression and personal development of the employees. They are given trainings and coaching which help them build relevant skills and expertise and progress personally and professionally (McDonalds, 2019b).

3. Benefits of Equality and Diversity

There are several benefits associated to practicing equality and diversity in the workforce in today’s organizations. Firstly, if the employees are from varied backgrounds then the overall understanding of market will be higher because customers are also from different backgrounds. If a product requires understanding of certain segment of customers, then the employees who belong to that segment can provide invaluable advices and ideas as they can relate to such customers. Secondly, diverse workforce allows an organization to cut down all the language barriers as it has employees who have different native languages. So, communication barriers are eliminated and messages are easily translated with the help of relevant employee (Clarke, 2019).

Moreover, increasing diversity and equality in the workplace also increases workforce satisfaction. This is true because when all the staff members are treated with honour and are given fair chances, then their esteem needs are satisfied which according to Maslow’s hierarchy of needs stands on the fourth place and is vital for motivation of employees (Maslow, 1943). When the motivation level and employee satisfaction increases, then the absenteeism rate and employee turnover goes down, and the relationship between the employees is improved resulting in better and less stressful work environment. Due to these factors, the reputation of the organization is improved in front of the internal and external stakeholders. Also, the overall productivity of the company goes up hence resulting in increased bottom line. Additionally, when a company is open to diverse workforce and has a remarkable reputation of a fair employer, then the pool of candidates willing to work for the company is enlarged increasing the chances of recruiting more capable and better candidates (Esty, Griffin, & Hirsch, 1995).

4. McDonald’s workplace diversity approaches

Diversity and inclusion are major parts of the company’s culture and environment. It started from 1970 when the CEO of McDonalds devised a diversity framework. Later, in 1980, an official position for the head of diversity was created and the head was recruited to manage the wide range of employees working at McDonalds to serve the wide range of customers. Soon, it became a leader in and gain prominence through practicing diversity and inclusion across the world (McDonalds, 2019c). 

According to the President of the company, Jan Field, the workplace diversity and equality are one of the most important values of the organization that flows from the meeting rooms to the kitchen and restaurant staff. According to him, the objectives set by the business cannot be achieved until such an environment is created for the employees where they can perform their best and such an environment cannot be created without eliminating discrimination and political groupings of employees with similar background. Similarly, the Global Chief Diversity Officer, Pat Harris, believes that focus on the diversity and equality programs and ensuring that they are practiced in every level of the organization has resulted in amplifying the company’s future sustainability. She further confirms that the organization is linked to various local as well as national affinity bodies. McDonalds has a well-structured and gratifying heritage of only working with those people and companies that support and share the ideology that results in practicing diversity and equality (Singh, 2010). 

The words and speeches of top management on diversity and equality practiced in their company are supported by the facts and figures:

  • 73% of the company’s overall employees, 43% of the franchise employees and 55% of the raw material distributors are females and people of colour. 

  • The charity program run under the company is called Ronald McDonald House of Charity. It saved 298 families of ill children which cost approximately US$250 million per year. 

  • There is a well-established promotion and employee development program which has led to 90% of decision-making staff to come from within the company who were previously working at lower positions. 

  • The majority of employees who are present at senior management level are associated with the company for more than a decade (Singh, 2010). 

In order to ensure that the employees reciprocate the diversity and equality practiced by the company, there are several seminars and workshops conducted across the organization such as Winning with Inclusion and Diversity, Asian Career Development, and Gender Speak – Working together successfully etc. The company also has a lot of strong employee support groups such as the organization’s African American Council, Women’s Leadership Network and the Hispanic Employee Network among others (McDonalds Corporation, 2018). 

In addition to this, McDonalds was selected as one of the best places to work according to Corporate Equality Index 2019 conducted by Human Rights Campaign Foundation (Human Rights Campaign Foundation, 2019 ). It has also gained numerous appreciations such as:

  • Named one of the best employers across the globe (Forbes, 2018).

  • Recognized for being one of the best company for minorities to work (Fortune, 2018).

  • Awarded for the best organizational diversity strategy (HR Magazine, 2010).        

  • Acknowledged as one of the top 50 workplaces for diversity (Black Enterprise, 2018).

i. Gender diversity 

Currently, women have a share of 30% of the officer positions and 41% of the top management positions. Additionally, around 60% of the manager level positions are held by women (Emerald Group, 2014). The company has a strong emphasis on building the skills and expertise of women employees to ensure that there is no discrimination or inequality. There are numerous programs and strategies implemented to promote diversity in the company. A recent example is the initiation of a new program on the Women’s Day called: “Better Together: Gender Balance & Diversity”. The goal of the program is to ensure that by 2023 the company will achieve equal representation of both the genders at every level of the organization. This will allow women to progress in the professional arena and will generate greater contribution from them for the success of the business. Moreover, the company officials signed Women Empowerment Principles of United Nations to stamp the organization’s dedication towards advancement (McDonalds, 2019f).

According to the Chief Officer of the company, David Fairhust, equal representation of both the genders in the workforce is a massive strength that a company can possess. Being one the largest employers of women, McDonalds is driven to create and present an inspiring workplace where each and every individual is respected and given equal chances and opportunities to succeed. The company also works to influence and impact others such as the franchise owners, raw material distributers, and other partners to incorporate equality and promote diversity in the workplace. The newly launched program hence aims to achieve this goal too by continuously striving hard and hitting the targets set (Kelso, 2019).

The program’s strategy involves four pillars through which the company will form important milestones and handle a variety of activities to encourage gender balance:

  1. Representation: one of the major goals of the company is to achieve equal level of female representation in all the ranks of the organization so that the ratio of the number of men working for every women working in the company is 1 or close to 1 at every level of the organization. Currently, in the Restaurant and Food Industry, 52% of restaurant staff and 71% of waitresses are women. However, only 18% of women work in the top management position where men dominate. On the other hand, in McDonalds, women have a share of 30% of the officer positions and 41% of the top management positions (Davis, 2019).

  2. Rising: the rising pillar is to ensure that both the genders are provided with equal growth, career progression and personal and professional development opportunities. 

  3. Recognition: in order to motivate the women employees and to recognize their hard work, efforts must be made to appreciate their progress and acknowledge their impact. 

  4. Reach: to get a global impact and to change the gender inequality worldwide, the company will extend support and encourage the franchise owners, raw material distributers, and other partners to adopt the same strategies (Davis, 2019).

Along with all these strategies, the company is also operating several educational and development projects for the women. One such program is “Women in Tech” which is being run with the objective of teaching women employees the expertise of data sciences, cyber security, AI etc. so that they learn new skills and can advance in their careers at a higher pace. Microsoft has collaborated with McDonalds for the program so that several women get a chance to attain valuable capabilities which are very important in today’s competitive world (Davis, 2019).

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