Which aspects of McDonald's organisational culture are considered to be strong compared to competitors - Dissertation Example

?Introduction Organizational culture is a topic that is well-studied, and it basically means that organizations have a certain set of values and beliefs that are unique to that organization. Because culture needs to be spread, and there must be a method for this method to spread, this is a topic of consideration and is the focus of this paper. In particular, a vision is something that permeates organizations and, if this vision is positive and committed to by the employees of the company, the vision can make the organization great. This vision thus guides the organization, and underpins the culture. Another variable is that of leadership, as leadership has a great effect on organizational culture. Toxic leaders may lead to toxic work environments, so the organizational culture would be adversely affected. Conversely, effective leaders may lead to effective teams, and this would positively affect the organizational culture. The different kinds of leaders, and how these leaders operate, is another focus of this paper. Lastly, since McDonald’s is a multinational corporation, the concept of cultural distance must be touched upon. This is another focus. The results sections will extrapolate the data that was found on McDonald’s and relate this data to the information presented in the literature review. Hence, it can be shown why McDonald’s is the dominant player in the fast food market around the world. The literature review is divided into four sections – literature regarding organizational culture in general, followed by literature regarding vision, literature regarding leadership, and literature regarding cultural distance. The research section is next, and describes the kind of research undertaken, which is secondary research, and how the particular topic was researched. Next comes the results, which are tied into the literature found in the literature review. A conclusion tying it all together concludes the paper. Literature Review The Meaning of Organizational Culture Organizational culture is “the coding of values and deeply-held beliefs that mold an organization's decision patterns, guide its actions, and drive individual behavior” (Dauphinais & Price, 1998, p. 190). An organizational culture is made up of patterns of belief that are rooted in the values, norms and informal activities of the organization (Ivancevich et al., 2008, p. 503). Both members and outsiders are cognizant of a particular organization’s culture, as the organization makes its organizational culture visible (Dauphinais & Price, 1998, p. 190). At the same time, because it is comprised of beliefs, values and attitudes, all intangible qualities, it is subtle and invisible. The culture may be either beneficial or destructive. If based upon a positive vision, which is discussed below, the cultural organization is beneficial to the organization. Alternatively, if the belief system upon which the organizational culture is based is flawed, and does not fit the vision, then it can be destructive and will drive the organization on to mediocrity, not greatness. Moreover, the organizational culture is often driven by the bottom up, as opposed to top down, according to Dauphinais & Price, as the ways that the broad masses of the organization behave dictates the culture of the organization. Therefore, the organizational culture may be created by rewards, measures and “carefully structured people practices” Vision as a Part of Organizational Culture Part of the organizational culture is the vision that permeates throughout the organization, especially if the organization is strong and is able to have a shared vision. According to Senge (1990), a shared vision is vital for a successful company and should be one of the top priorities. The company’s vision is one to which the people of the organization must commit themselves. Yet, the successful company also realizes that there are thousands of individual visions for the companies, or, in the case of McDonald’s, millions of different visions, as each employee may have their own ideas for the company. The successful company is able to realize this, and take the multitude of ideas and form a kind of synthesis. Yet the key to the shared vision, and the ability to synthesize the other visions into the shared vision, is an inspiring leader who is able to share the company’s vision in such a way that all employees subscribe to it. When a leader does this, he or she not only inspires a shared vision for the company, but, also, a profound sense of loyalty (Senge, 1990, pp. 205-206). Senge also states that, while a leader may inspire a shared vision, a share vision also benefits the leader, as it is the basis for organizational loyalty. The shared vision is envisioned by the leader, and each and every member of the organization shares the same vision for the company. Each and every employee cares about the company’s vision, and each employee wants to be connected to other employees who are carrying out the vision. For an organization to truly have a shared vision, the leader is not merely imposing a vision on the employees, but transmitting the vision, so that the employees truly are committed to the leader’s vision and are committed to making the vision happen (Senge, 1990, p. 206). There are a number of factors that lead to a shared vision. One is that each individual member of the organization has their strengths acknowledged, and each individual with a vision for the company is similarly validated (Senge, 1990, p. 212). If an organization builds a team, as opposed to a group, this goes a long ways towards creating a shared vision for the organization. For instance, when there is a shared vision, the team can become cohesive, even if there are individual cultural differences between team members. Plenart (1995) tells a story that illustrates this. He was building a team that was comprised of many different cultures, nationalities and religions – Muslims, Buddhists and Hindus. The members of the team could not understand one another at first, and there was considerable resistance to communicating openly. Yet, out of this disparate mix, the team became strong and vital, as a shared vision was communicated between the members and, because each member of the team brought something different to the table, the team was able to thrive from the different viewpoints and was able to innovate because of it as well (Plenart, 1995, p. 290). That said, there are different levels of commitment according to Senge (1990). Members of an organization may be committed to a vision, or enrolled, or compliant, non-compliant or apathetic. At the top is commitment, and this is where the individuals of the company “get” the vision – they want it and will do whatever it takes to make it happen, even if that means creating new laws and structures. Enrollment is a level beneath commitment, and this is where the individuals of the company want the vision and will do whatever it takes to carry out the vision. However, they are not willing to change laws or existing structures to do it. Compliance is at the level beneath enrollment. When the corporation is compliant with the vision, the members of the corporation understand the vision and agree with it, but are not invested in it and do not really share the vision. Nevertheless, the employees follow the vision and do what is expected of them and more. This is what is known as “genuine compliance.” Formal compliance is below genuine compliance, and this is where the member agree with the vision and see the benefits of the vision, and do what is expected of them, but no more than that. Grudging compliance is at the level below formal compliance, and this is where the members do not see the vision, do not agree with it, or do not understand it, yet go along with it for fear of losing their jobs. They do what they have to do, but they complain about it the entire time. Below that is non-compliant people, who are similar to compliant ones in that they do not understand or agree with the vision, only, instead of complying, they do not. Apathy is at the bottom level, and that is where the members just don’t care either way. All they want is their paycheck (Senge, 1990. pp. 219-220). The obvious level of commitment that every company wants to attain is commitment or enrollment, and, according to Senge (1990), there are a few ways for a leader to do this. For one, the leader must be invested and committed to the vision. If the leader is not, he may sell the vision, but cannot inspire the members of the company to commit to enroll in the vision. Two, the leader must also be able to acknowledge problems, as opposed to telling the members that everything is fine when it is not. Carrying out a vision is difficult and will be met with obstacles, and the members must know this and know the obstacles, or they may become disillusioned when the road becomes rocky. Three, the organization members must be made a part of the vision, and they must be acknowledged as such. In this case, there are not ultimatums. The members must know that whether or not they accept the vision is their choice, yet they should have some kind of alternative to bring to the table if this is the case. They cannot simply say that they do not subscribe to the vision without having another idea to take its place. At that point, they are grudgingly compliant, and this is not a positive attribute. In other words, all employees are important, as are their views, and the organization must make this known (Senge, 1990, pp. 222-223). Leadership as a Part of Organizational Culture Another attribute of organizational culture, and one that has a large impact on whether or not the company’s vision is carried out among its members is that of leadership. Some leaders inspire loyalty and vision, and others do not. There are many different types of leadership. One type is servant leadership. This is a leader whose own individual interests are sacrificed for the good of the corporation. These leaders are marked by altruism, wisdom, the ability to persuade and the ability to lend emotional support to those who fail. Their altruism also tends to flow not just to the company, but to society and the community, as they try to use their organization as a force for good in the world (Barbuto & Gifford, 2010, p. 5-7). Another style of leadership is democratic leadership. This leader encourages the members to come with ideas for debate and strives to build consensus. Everybody in the organization is acknowledged as being a part of the team, and they are acknowledged as being valuable with valuable ideas. When a team is comprised of talented, bright, motivated and professional team members, this type of leadership really brings out the best in the team (Eagly & Johnson, 1990). While the democratic and servant leaders inspire trust, another kind of leadership, transformational leadership, is based upon this variable. Transformational leaders are often leading a company through a period of uncertainty and transition, such as when a company merges or is going through painful changes, such as when a CEO is fired, or staff is being laid off, or other stressful changes are occurring. It is during this period that trust in a leader is crucial, and transformational leaders are able to take this situation and enhance the performance of the followers beyond their own expectations (Thomas, 2010, p. 9). As stated above, trust is pivotal in this situation, and Jung and Avolio (2000) a transformational leader is only effective if he or she has that trust. Employees are naturally apprehensive when a company is in transition, and there also tends to be considerable obstacles to overcome. A transformational leader who is able to earn the trust of the employees does so by demonstrating that he or she cares about the employees’ needs, that any previously made agreements will be honored, that the vision can be obtained and that the leader is capable of obtaining it, and that the leader is willing to sacrifice his or her own well-being for the good of the company (Harris, 2005, p. 8). Autocratic leadership is another kind of leadership, and has many more negative traits then the kinds of leadership mentioned above, although it is not necessarily completely bad. This leader issues decisions, does not care about input from the employees and does not countenance discussion. The workers are simply supposed to know the mandates of the company and follow along, without input. Whether or not the employee agrees with what the company is doing is irrelevant to this leader – this leader only cares about compliance. Of course, the disadvantages to this kind of leadership are obvious – the previous sections emphasized that employees are a valuable member of a team and have much to contribute, and an autocratic leader misses out on this valuable contribution. Plus, this kind of leadership may breed considerable resentment. Still, this leadership is good in situations where a quick decision needs to be made (Miller, 2010). The trust variable was mentioned above in relation to leadership styles, and trust is another aspect of organizational culture as a whole. According to Strike (2007), trust is essential for building the community, or, in this case, the corporation (Strike, 2007, p. 17). Cooperation is more important to the corporation than competition, which means that the parts of the whole must have integration and “the success of each contributes to the success of all (Strike, 2007, p. 17). Therefore, the key to a successful organization is solidarity, and trust is essential to building solidarity because when trust is lost, so is the sense of solidarity (Strike, 2007, p. 18). Special Considerations for Multi-National Corporations with Regards to Organizational Culture Because McDonald’s is a global company, there are special considerations that it must consider with regards to its organizational culture, and the main focus here is that it must adapt its organizational culture to the surrounding cultures in the countries where it operates. (Estrin, et al., p. 3). This means that it must assess the surrounding culture by taking certain variables into consideration. One of these variables is cultural distance, and this refers to the cultural distance between the target country and the country of origin. So, when McDonald’s operates in China, it must acknowledge that there is a cultural distance between China, the target country, and America, the origin country (Ackerman, 2004, p. 5). There are four dimensions to cultural distance: power distance – how unequal are people of different statuses treated, and how much is the hierarchy of power valued; uncertainty avoidance – to what degree are the people of the culture threatened by uncertain or unknown situations; individualism – are the ties of the people loose or tight; masculinity – how distinct are gender roles. Cultural distance is determined by calculating the square root of all the dimensions for each country, then comparing the results (Ackerman, 2004, p. 5). This cultural distance can cause complications for a multi-national company on many different levels. Perhaps the country of origin and the target country have a much different idea about the roles of women. Therefore, the organizational culture of a McDonald’s operating in Saudi Arabia will be quite different from a McDonald’s operating in Great Britain. Moreover, the cultural distance may also cause problems when dealing with how to get supplies, etc. The multi-national must know the rules of the game in every country in which it operates or it will run into considerable problems (Ackerman, 2004, p. 6). Organizational culture is also influenced by other dimensions of distance. One is institutional distance, which may be informal or formal. With informal institutional distance, there is cultural distance as well as organizational differences. Because the informal aspects of institutional differences are subtle and ingrained, it is important that the organization have partners or leaders who are a part of the host country. So, a McDonald’s operating in Beijing should have Chinese managers, not American ones, because the Chinese managers will understand the aspects of the Chinese institutions that cause distance between China and America (Estrin et al., 2007, p. 4). Easier to navigate are the formal aspects of institutional distance, such as regulations and legal hurdles. The reason why these aspects of institutional distance are more navigable than the informal aspects of institutional distance is because these aspects require knowledge and study, not necessarily experience (Estrin et al., 2007, p. 4). Research Method The research method that will be used is secondary data. Secondary data is, in a nutshell, data that has been collected by others. It can be in the form of government and regulatory reports, company reports, published academic research, and internal documents produced by organizations, just to name a few. (Harris, 2001). The advantages of using secondary data is that it is readily available, and generally has a low cost. (Hopperth, 2005). Conversely, collecting primary data is often prohibitively expensive. (Brown & Semradek, 1992). Primary data can take years to compile; secondary data, a matter of months. (Hopperth, 2005). Also, there is the issue of sample size – secondary research is often compiled by a government agency, with well-documented collection procedures and well-maintained data files. The information that is compiled is often comprehensive – everything from information on births, deaths, employment, income, etc. to specialized information, such as information about participant's attitudes, beliefs, and related family issues. (Hopperth, 2005). That said, there are issues with using secondary research. One of the issues is that of validity and reliability. Validity is if the study measures what it purports to measure, while reliability refers to the ability to give the same result consistently, even with different researchers, instruments and events. (Harris, 2001). Reliability can be reproducible, which means that different researchers will get the same result; stable, which means that the results do not change over time; and accurate, which means that process conforms to a known standard and yields what it is supposed to. (Harris, 2001). In order for the study to be valid, the outcome data needs to be complete. This is especially crucial when looking at statistical evidence over a period of time between different populations. (Sorensen et al., p. 436). Validity, as well as reliability and accuracy are all sensitive issues when dealing with secondary data, because of the problems with conceptualizing of the data, as well as dealing with errors that can occur when selecting, collecting, recording, filing, analyzing and publicizing the data. (Brown & Semradek, 1992). In this case, the subject was the organizational culture of McDonald’s. As there was evidently not a way to go to a government cite for the statistics on this, the best way to research this topic was to access scholarly articles on the subject. Google Scholar and JStor were the best places to find scholarly articles. The words that were typed in were “McDonald’s” and “organizational culture.” Many articles came up that were tangentially related to the topic but were not exactly helpful. However, two articles were found which fit the topic at hand, and these articles were perused and integrated into the study. Then, because much of the literature review focuses on the behavior of multi-national companies in foreign lands, and how the cultural differences of these foreign lands impacts the organizational culture of the multi-national company, the next query consisted of McDonald’s + culture. This query hit upon two useful articles about McDonald’s in the Far East, namely Hong Kong and Japan. These articles explained the cultural differences and how these impacted how McDonald’s operates in these lands. Since this is a topic that is centrally related to the issues previewed in the literature review, these articles were also incorporated into the results. The challenge was to extrapolate the results and apply them in a meaningful way. McDonald’s is obviously a giant multi-national company, so the term organizational culture might not mean much. The theories on organizational culture that were presented presumes that the company in question has some sort of central leadership so that the vision can be passed down from the leadership to employees. However, in the case of McDonald’s, this takes on a different meaning, as the organizational culture in question takes place within different stores. One store will have a certain culture, while another store will have a different culture. This is inevitable, so the challenge was to extrapolate the results taken from individual chain stores and apply it to the whole. One way to look at it is that each store represents a kind of subculture, which means that it is distinct from the dominant culture (Bunch, 2007). So, the individual stores that were studied may either be seen as subcultures or representative of the dominant culture. The way that the results are organized is, first, a discussion of the culture of individual stores, and the organizational culture represented in these stores. Evidence of shared values, beliefs and vision will be examined, as well as the types of leadership that were inherent in these stores. The results will be then be related to the literature review. Then, observations of different stores, namely Hardee’s and Arby’s, and how they differ from the organizational culture of McDonald’s will be discussed. Lastly, the culture of stores in Hong Kong and Japan will be compared to the American versions of McDonald’s. Research Results The Culture of Individual Stores The observations of the organizational culture in the individual stores was supplied by Goldman et al. (2008). They observed the organizational culture in a four different stores in the Rochester, NY area, and reported on the results. Their work entailed going to these McDonald’s during different shift periods, and observing without interfering with the normal operations. What they observed was that the commonalities between the stores was that the employees were relaxed and jovial with one another. None of the employees seemed particularly stressed, even during the rush hours (Goldman et al., 2008, p. 2). Moreover, they observed that, for the most part, the managers ran the operations in a manner where the employees gave input with the encouragement of the managers, and that the managers showed a great deal of empathy for the employees. The managers were indistinguishable from the employees on many occasions. One exception was a store where the manager ran things in a tight ship sort of way, or, as the researchers phrased it, a “machine-like manner” (Goldman et al.., 2008, p. 2). What this suggests is that the managers in question were more democratic or servant leaders than autocratic. This is shown by the encouragement of input and the overall lack of fear from the employees. Another of the hallmarks of these types of leaders is that they have empathy for their employees, and this was evident from the researchers’ description of the stores that they visited. The leaders probably would fit more of the mode of the democratic style of leadership then servant, however, as there was no indication that the managers sacrificed their own needs for those of its employees. Rather, there was an egalitariasm in that the leaders seemed equal to the employees, at least to the observer, and this would fit in with the literature regarding democratic-style leadership. Moreover, the researchers noted that the managers never showed disrespect for their employees, no matter how stressful situations were (Goldman et al., 2008, p. 5). This also shows that the managers were democratic or servant, as respect for the team members is a hallmark of both of these leadership styles. Goldman et al. (2008) also observed that the culture that permeated the stores where they visited was the result of a vision that was handed down from the top. According to them, the Hamburger University, which is where McDonald’s top-level employees, such as managers and the like, are trained instills the values that were seen by the researchers at the stores where they visited. This vision is that training should be available to all employees, not just executives and managers, and that McDonald’s vision of efficiency, excellent customer service and friendliness is instilled to all employees. This training, according to Goldman et al. also makes the employees feel important, and like they are not just a cog in a wheel but a part of an enterprise of which they serve important purposes. This is in accord with the vision hypothesis set forth in the literature. To reiterate, the thing that makes a corporation great instead of mediocre is that it has vision and that its employees either commit to or enroll in the vision. Goldman et al. suggests that the employees are indoctrinated in McDonald’s vision of how employees should act through the proper training, and that, since the employees they observed embodied the values of efficiency and friendliness, without exception, they evidently have committed to the vision that corporate headquarters set out for them. The vision, according to Goldman et al., truly does come from the top, in the form of McDonald’s CEO Jim Skinner. Mr. Skinner, according to Goldman et al., is a transformative figure who has guided McDonald’s through some potential landmines, such as the chain being blamed for the obesity problem, by making sure that the company takes initiatives instead of passing the blame. Additionally, Mr. Skinner put into place an initiative that states that the individual stores should be the focus of the company, as well as implementing programs that fight the “McJob” stigma of working for McDonald’s. All of this has made the employees feel more valued, according to Goldman et al. (Goldman et al., 2008, p. 6). Because of this, the employees invariably were friendly, efficient and clean, in every store that the researchers visited. This is another indication that the corporate vision of friendliness, efficiency and customer service permeates throughout the organization, from the CEO down to the fry cook, which means that the organization is superior in instilling its vision into the individual employees. The observations of the McDonald’s employees made by Goldberg et al. may be contrasted with what was observed by this author in two of McDonald’s competitors, Hardee’s and Arby’s. There was one particularly galling episode at Hardee’s which showed that, at least for that store, there was little to no training for any of the employees and that the employees generally did not care about the customers. This occurred when a hamburger was taking a much longer time than usual coming out and a customer said, under her breath, “what is taking so long?” To which the employee behind the counter stated “if you think you can do any better, come back here and do it yourself.” When the customer, understandably outraged, asked for a manager, a young girl comes out and asked the customer “what do you want me to do about it?” This is an incident that presumably would not happen in McDonald’s because, even if there is a rogue employee who reacted at this employee did, the manager would be much better trained to handle the situation than this particular manager. The other incident was at Arby’s. First, the bathrooms were inexplicably locked, and a man and woman came in and asked to use the bathrooms. The man’s bathroom was unlocked, but the woman’s was not. Then, even though it was only 7 PM, and lobby closed at 10 PM, there were barriers set up between the counter and dining area. There was not an explanation for these barriers, and when the customers proceeded past the barriers to the dining area, they were not admonished from going in there. So, the barriers, like the locked restrooms, were not explained and apparently were left there from earlier when perhaps the floors were wet. Then, a lady comes in to order some food, and the moment the lady came to the counter to order food, the worker turned her back to the customer to ostensibly check on some other food coming out and did not turn around and take the lady’s order for at least five minutes. There was no greeting at all to the lady, no word of welcome or even an “I’ll be right with you.” This was inexcusable behavior, and again, not behavior that would be seen at McDonald’s, where efficiency, customer service and friendliness are key at every store. The observations of these stores, Hardee’s and Arby’s, leads this author to believe that the employees do not receive the same level of training and are not instilled with the same vision as the McDonald’s employees. Even more crucially, the managers apparently did not receive appropriate training, as these incidents should never occur if the manager is doing his or her job properly. McDonald’s Around the World As promised, the second part of the results section will focus upon the McDonald’s around the world, and how the organizational cultures change, depending upon the country where the stores are located. The first country examined will be Hong Kong. According to Watson (1997), McDonald’s has been operating in Hong Kong for over fifty years and first got a foothold in Hong Kong by offering an alternative to traditional Chinese food that was served by other fast food outlets at the time. In an effort to make sure that the local McDonald’s did not have any semblance of a Chinese feel, the stores not only did not provide any kind of traditional Chinese food on the menus, sticking with only burgers and fries, but deliberately did not translate the name McDonald’s into Chinese characters. This set the restaurant apart, as people flocked to it as a symbol of modernity and America. Later, the restaurants set themselves apart for having clean bathrooms, as this is something that their competitors did not have (Watson, 1997, pp. 86-88). What is interesting is that the employees in Hong Kong do not display the same level of smiling congeniality as their American counterparts do, as smiling is seen by the people of Hong Kong as being indicative of a shady character. As one person put it -“if a fruit vendor smiles at you, you know that you are being cheated” (Watson, 1997, p. 90). It is also a sign that the workers are not taking their jobs seriously, as if they are playing around when they are smiling and being friendly. The people of Hong Kong do not care about friendliness – they only care about quick service, adequate table space, and cleanliness (Watson, 1997, p. 92). Another contrast is that the people of Hong Kong have refused to clear the tables themselves, as this is a sign of inferior labour. Because of this, the McDonalds in Hong Kong have had increased labour costs, as more employees are needed to bus the tables. This is another difference from the American system, where customers are expected to bus their own tables. Considering that the McDonalds in Hong Kong are crowded, with wall to wall people, the lack of customer bussing adds up to considerably more costs for the individual stores (Watson, 1997, pp. 92-93). These are indications of cultural distance that McDonald’s to which McDonald’s has had to adapt. This would affect the organizational culture in the Hong Kong McDonald’s, as, in these stores, the same level of friendliness and congeniality that was seen in the American stores would be discouraged. Instead of the staff being trained on friendliness and customer service, instead the emphasis in the store culture in Hong Kong would be on efficiency and cleanliness above all else. Plus, the employees would need additional training on bussing tables. Ohnuki-Tierney (1997) compares Japanese society and American society in the context of McDonald’s, and how McDonald’s changed Japanese society by cross-mingling American values with Japanese ones. Ohnuki-Tierney states that the young Japanese, who make up the majority of customers in Japanese McDonalds’, subscribe to the notion that America is a land without hierarchies, which is in contrast to Japan, which is a hierarchical society. Because of this, and the essential Americanness of McDonald’s, the young have adapted some of the American sensibilities, most notably that of manners. The traditional manners, which are still being practiced at home, were transformed in the public place, in part because of McDonald’s (Ohnuki-Tierney, 1997, p. 181). Thus, the cultural distance between Japan and America - that Japan is hierarchical and America is not – has resulted in a transformation of Japanese society as restaurants such as McDonald’s is being frequented by young Japanese and the American values is essentially being exported to these Japanese, who seek to emulate Americans, and these values are showing up in public, less so in private. This, in turn, has implications for the organizational culture of Japanese McDonald stores, as they might be more Americanized than more traditional societies such as Hong Kong. Conclusion The literature review showed the importance of vision and leadership in corporations, and how these are central to organizational culture. It also showed how multi-nationals should be careful about cultural distance between the originating country and the target country, and how this can impact the organizational culture of the stores who locate in foreign lands. The results show that McDonald’s has leadership and vision, and that this is evident by the behavior of the employees in individual McDonald’s stores, all of whom displayed professionalism, courteousness, friendliness, and efficiency. Moreover, leadership showed signs of being servant and democratic leadership, as the employees were treated with respect by the managers, without variation. These are the qualities that has made McDonald’s the number one fast food restaurant chain in the world, and, if one compares them to Hardee’s and Arby’s, which anecdotal evidence suggests that these restaurants do not have comparable vision and organizational culture, it becomes clear why McDonald’s dominates among all others. What the evidence shows around the world, at least in Hong Kong and Japan, is that there is some degree of cultural distance, particularly in Hong Kong, where friendliness is disdained. This would change the organizational culture in this country. 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