McDonald’s Case Study Assignment

Thousands of people love the irresistible taste of Pepsi and because of that it is one of the most famous carbonated soft drinks to this day. The PepsiCo started off their glorious franchise from the Pepsi soft drink in 1893 by Caleb Bradham, who made it in his drug store where the drink was sold. In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy, due to financial losses acquired by speculating on wildly fluctuating sugar prices as a result of World War I. After the horrible bankruptcy, the Pepsi-Cola Company went for sale, and so Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful, and soon Pepsi’s assets were purchased by Charles Guth, the President of Loft Inc. The Loft Candy Company was a candy manufacturer with retail stores that contained soda fountains. On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered the opportunity to purchase the Pepsi-Cola Company and they decline on each occasion. It took time for the company to actually bloom to popularity. During the Great Depression, Pepsi finally gained popularity following the introduction in 1936 of a 12 ounce bottle.

They got their 12 ounce bottle ad out in an interesting style. The Pepsi-Cola Company used a radio advertising campaign featuring a jingle to get the word out. The jingle is arranged in such a way that the jingle never ends. Pepsi encouraged the price-watching consumers to switch, obliquely referring to the Coca-Cola standard 6.5 ounces per bottle for the price of a nickel, instead of the 12 ounce Pepsi sold at the same price. Coming into a time of economic crisis, the campaign succeeded in boosting Pepsi’s status, and because of that, the Pepsi-Cola Company doubled in profits. Pepsi’s success under Charles Guth came while the Loft Candy business was faltering. Since he had initially used Loft’s finances and facilities to establish the new Pepsi success, the near bankrupt Loft Company sued Guth for possession of the Pepsi-Cola Company. In a long legal battle, with the case reaching the Delaware Supreme Court, Guth ultimately lost everything. Walter Mack was named the new President of Pepsi and guided the company through the 1940s.

Mack, who supported progressive causes, noticed that the company’s strategy of using advertising for a general audience either ignored African Americans or used ethnic stereotypes in portraying blacks. He realized African Americans were an untapped niche market and that Pepsi stood to gain market share by targeting its advertising directly towards them. He hired Hennan Smith, an advertising executive, to lead an all-black sales team, which had to be cut due to the onset of World War II. In 1947, Mack resumed with his plan, hiring Edward F. Boyd to lead a twelve man team. They came up with advertising portraying black Americans in a positive light. One interesting ad that they did was a picture of a smiling mother holding a six pack of Pepsi while her son (a young Ron Brown, who grew up to be the Secretary of Commerce) reaches up for one.

Racial segregation and the Jim Crow laws were still in place throughout much of the U.S, so Boyd’s team faced a great deal of discrimination as a result, from insults by Pepsi workers to threats from the Ku Klux Klan. Besides the negative side of things, Mack’s niche market was so successful, that Pepsi’s market share as compared to Coke’s shot up dramatically. After the sales team visited Chicago, Pepsi’s share in the city overtook that of Coke’s for the first time. This focus on the market for black people caused some consternation within the company and among its affiliates. It did not want to seem focused on black customers for fear white customers would be pushed away. When Mack left the company in 1950, support for the black sales team faded and it was cut. Analyse the elements required for effective recruitment, selection and training within contemporary organisations.

Rebranding “Mc Job” as a career involves company’s appreciation, recognition and future promotion that break the ice of the old perception of “Mc Job” to create brand new work environment in the QSR industry.

Company History and Background.
McDonald’s is one of the famous brands that have existed over the last 52 years. The company started in 1955 by Roy Croc and the first restaurant was opened in Des Plaines, US. This restaurant is no longer running and has been turned into a museum. The company is committed to improving their operations and thereby enhancing the customer’s experience (McDonald’s 2010).

McDonald’s retails more than 32.000 restaurants in 118 countries. According to the company reports these restaurants serve approximately 50 million burgers each day. McDonald’s is one of the world’s most well-known and valuable brands. McDonalds serves the world some of its choice after foods such as The Big Mac, McChicken Sandwich and Chicken McNuggets. This is one area that differentiates the company from other fast-food restaurants. The attitude of the organization towards work and standards is obvious from the words Roy Kroc who stated system and attain higher positions if they can prove their abilities.

It is worth noticing that the company claims that 20 out of the top 50 management staff started in McDonald’s restaurants, including the CEO, Don Thompson and also 67,000 McDonald’s restaurants managers and assistant managers started as restaurant staff (McDonald’s 2010). This is significant considering that “if you have got time to lean, you have got time to clean” (McDonalds, 2010). McDonald’s opened their first UK restaurant in Woolwich, London in 1974, today the company has over 1,250 restaurants across the UK McDonald’s (UK) employs over 67,000 people, 43,000 within the company restaurants and a further 24,000 are employed by the franchisees. On average the company serves over 2.5 million customers every day. According to Peter Beresford (McDonald’s 2006) people in the organization are very important, and so is their continuous development.

Human resource management plays an important role in the success of a company. Most of the companies are very keen to pay attention towards their employees. Mainly HRM is all about managing people at work. The most important part of human resource management is Training and Development. It plays a key role in every organisation though few people disagree about the importance of training and development in the success of organisation. As defined by Storey in 1995, ”HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.

Recruitment and Selection
In the McDonald’s, recruiting process is run throughout the year. Like other organisations, McDonald’s recruit internally and externally, and they for the most part recruit their managers and Assistant managers internally rather than externally, because it is easier and less training is needed due to the candidate is well known about the job. Just about 50% of McDonald’s salaried managers are promoted from within McDonald’s. In addition, for preparing the job description, McDonald’s describe the job title, department, location, the responsibilities, the job purpose and duties. McDonald’s uses the application form with questions which are typical questions, to know what qualification the applicant has, such as knowledge, skills, experience, and etc. Application form fill-up and make the answer of question is the first step for applicant at crew member level. For the recruitment process, Interview is the most crucial part for McDonald’s potential employee. From the short listed candidate, McDonald’s call for interview with area manager or store manager at their flexible nearest branch. From the face to face interview, interviewers can know about applicants, such as behaves, confidence, knowledge, and basically how the applicants come across as a person. At crew member level, interview is the second step for applicant.

At this step, short listed candidates involve selecting a small number of applicants for the next stage. This selecting process will be carried on until the right numbers of candidates are found with the wanted quality. As a result, the recruiting team can be able to distinguish easily the strong applicants from the weak hundreds of applicants. McDonald’s inform to the successful candidate over mobile phone or by email within one week. One day, McDonald’s arrange an induction for a new employee that may turn him or her into a long term, loyal member of staff. In the McDonald’s, the induction process begins even before the candidate is offered the job.

Overcoming the McJobs perception
McDonalds began to concentrate on employer branding. Officials felt that branding was a powerful tool that could be used to engage employees and by doing this McDonalds could break the misconceptions associated with the term McJobs. Commenting on the importance of employer branding, Fairhurst said, ”at the end of the day if your employer brand is not authentic to the organisations values, it’s worth very little”. The customers won’t buy into it, the public won’t buy into it and crucially the employees won’t buy into it. Fairhurst felt that the misconception associated with the McJobs title had damaged the employer brand image of McDonalds. So he came up with a series of advertising campaigns in which he tried to encourage people to change their minds. In September 2005 McDonalds launched a television campaign to promote the advantages of a McJob and to enhance its image as an employer brand. The campaign entitled “my first job” was set up to position McDonalds as a preferred place of employment and McJobs as a stepping stone to a successful career. Many more advertisement followed in which McDonalds showed how its employees who started at a lower level were able to achieve higher levels/positions in the company. One advertisement aired showed how Jim Skinner who worked as a restaurant employee at McDonalds had gone on to become the CEO of the company.

The implication of the external “McJob” definition is to suggest that McDonald’s does not have any of the appropriate Human Resource recruitment and retention policies in place within their organisation, which as stated previously gives the impression that it is not a suitable career choice for many people, despite the fact that they might have the qualities and skills that the company requires. As outlined within Maslow’s “Hierarchy of needs” theory (Armstrong 2006), employees need to feel valued and respected and this is an integral part of what motivates them within the workplace. This value not only needs to be extended to them by the employer (Leat 2007), but also by the society within which they live. Being labelled as a person with a “McJob” position implies the opposite effect; that being to devalue rather than increase the value and esteem with which their community holds them. Therefore it increases the risk of the McDonald’s employee seeking alternative employment in order to avoid the associated stigma. This situation would add to the corporation’s recruitment and retention problems, making the task of the Human Resource department even more difficult.

Motivation
Motivation is one of the reasons, why people work in the companies for the long period. Motivation system should include not only monetary motivation, but this should also include different types of bonuses and benefits for employees. It is also important to use empowerment in the motivation. In service organizations it is expected, that empowerment will be reflected in service quality, as employees will show the possibility to meet customer’s needs. This will also attract more loyal employees who will “pay-back” the training costs by remaining with the company. Empowerment as motivational construct should be analysed as understanding of empowerment by meeting individuals needs for power and control. Here we would like to underline, that employees appreciates the possibility to take personal decisions and deal effectively with situation and problems they really face during their work (Lashley, 2004).

Many firms offer their employees bonus plans that take into account personal performance, team performance (or project performance) and firm profitability that is distributed over 3 to 5 years. Payment on commission has been common on the sales end for years. But the industry is now seeing more operations employees earning the bulk of their compensation through bonuses and or commissions. Benefits to a compensation program do not have to cost a great deal of money. And the message they send to the employee can mean increased loyalty and reduced turnover. Many rewards now focus on helping the worker succeed as both an employee and as an individual. Common incentives include reimbursement for tuition on qualified programs, retirement plans, child-care subsidies, and flexible schedules to attract working parents. Additional benefits may include:

Trips and weekend excursions, Leased cars, Awards, certificates, plaques, honours, Memberships in professional organizations, Subscriptions, Computers/laptops, phones, Software, paid days off, Improving the work environment. What other companies may learn

When attempting a rebranding process other companies may take a lot from saga of the ‘McJob’ case study. Firstly, starting with the core of the organisation, the employees, and their positivity all and all is second to none. As per the Bight futures study, 90% of people working in McJobs showed high levels of engagement, 85% said they thought the job was better than they expected, and 83% could see a positive change in themselves. Also the creation of new jobs and the opportunity for a career, ie in 2009 research conducted by ‘Leeds Metropolitan University’ revealed that McJobs were an important means of social mobility as thousands of staff who had joined as crew members at McDonalds with not very high qualifications and gone on to carve out a successful career for themselves at the company.

Conclusion
Strategy we suggested involves ways of attracting new graduate/undergraduate employees. “I’m Lovin’ McJob” campaign is oriented on values and opportunities generation “Y” is looking for. Suggested ways of recruiting, motivation and training will motivate young people to stay in quick service industry as well as change McJob perception. With the new concepts stresses on respect and loyalty to fresh graduates and final year undergraduates, new perceptions will begin to perceive as they are delivering what they promised. Being accurately evaluate the money and time a company spent to hold the campaign would determine the success based on the quality and effort they put into the campaign. McDonalds believe the recruitment qualities will increases that applicants believe in their promises.

References

1. McDonald’s (2010), (2006).
2. www.Businessteacher.org
3. Mortimer R. (2007) ‘The U.S. follows the U.K’s lead on McJobs’. 4. www.ukessays.com ‘Managing people’.
5. Armstrong M. (2006) ‘A handbook of Human Resource Management Practice’. 6. Leat M. (2007) ‘Exploring Employee Relations’.
7. www.managementissues.com (2006) ‘Not bad for a McJob’. 8. Lashley B. (2004). ‘Can microcredit make a difference.