Scientific Management at McDonald's - Case Study Example

Running Head: Scientific Management SCIENTIFIC MANAGEMENT AT McDONALD’S The Dark Side of the All-American Meal A Case Study Abstract The McDonald’s fast food chain owes its phenomenal success to the successful application of Taylor’s principles and the tenets of scientific management. Such a management style, however, has been roundly criticized as being mechanistic, dehumanizing, and de-skilling, reducing the human element to the equivalent of a replaceable spare part in its machinery. The alleged low pay and long, uncompensated hours are viewed to be exploitative and oppressive. On the other hand, the continued success of McDonald’s has propelled it to occupy the number one position among fast-food establishments worldwide. The seeming contradiction begs the closer examination of McDonald’s application of scientific management, and a more balanced approach at understanding its merits. SCIENTIFIC MANAGEMENT AT McDONALD’S The Dark Side of the All-American Meal: A Case Study Introduction “All-beef patties, special sauce, lettuce, cheese, pickles, onions, in a sesame seed bun.” From Miami to Milan to Manila, a Big Mac™ is a Big Mac™ the world over (all 550 million of them sold every year, according to Kephart (2009). The largest fast- food franchise in the world with revenues of $23.5 billion in 2008, the Golden Arches is going aggressive, making plans to expand even more with an additional 1,000 new restaurants planned for opening in 2009 (Datamonitor, 2009). Apparently the company sees the present economic downturn as a chance to get at the budget-conscious burger buyer. The quality control at McDonald’s is nothing short of phenomenal. A patron who travels to any point in the country, or the world for that matter, and enters into any of McDonald’s stores can expect the same cheerful ambience, squeaky clean interiors, and prompt and amiable customer service. Most importantly, however, he can expect to enjoy the same familiar taste of any of the Mac’s regular fares (some locations may develop other products to suit local tastes and stave off competition). How the company does this is based on a system of production that was born at the turn of the last century. The Principles of Scientific Management In 1911, a paper was published that fundamentally changed the way business was managed. Entitled “The Principles of Scientific Management,” it was authored by Frederick Winslow Taylor, and its aim was to explore the manner by which scientific methods could be utilized as a tool to improve business productivity and efficiency. By breaking down jobs into their component tasks, standardizing these tasks, and training and motivating people in the way they should be done, then the production process becomes optimized, and more products, that meet the quality standard, are produced in a shorter period of time. With Taylor’s scientific method, a company could expect to increase revenues and lower costs. Taylor espoused four Principles of Scientific Management (quoted from NetMBA.com), each followed by an application of the principle: 1. “Replace rule-of-thumb work methods with methods based on a scientific study of the tasks; (Time-and-motion studies) 2. “Scientifically select, train, and develop each worker rather than passively leaving them to train themselves; (Staff training) 3. “Cooperate with the workers to ensure that the scientifically developed methods are being followed; (Strict supervision) 4. “Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.” (Division of labor, task-specialization) Taylor’s scientific management paved the way for the creation of Henry Ford’s assembly line technique. Fordism actualized and even developed on Taylor’s principles, instituting mass production, standardization, and quality checks. It affected labor practices by breaking down jobs into specialised and simplified tasks, de-skilling of employees, and delimitation of their responsibilities. It required a hierarchy of managers to keep tight control over the rank-and-file, and established the first performance-related pay as a means of motivating employees. A diagram of the Fordism theory, adapted from a lecture based on Thompson and McHugh (2002) follows. There are many plus-factors to scientific management, the most obvious of which is the production of a standardised-quality product, at the soonest possible time, with nothing left to the fickle discretion of employees. Several drawbacks to the method have surfaced, however, such as the dehumanizing of work and the apparent exploitation of labor. The Case of McDonald’s and Scientific Management According to Dijksterhuis et al, “Companies such McDonald’s are basically extension and improvements of the Tayloristic principles of division of labor and detailed work procedures.” (1999, p. 572) If there was any secret to McDonald’s highly consistent performance in its fast expanding international chain, it is its highly standardized, operationally centralized, rigidly structured system of management. The case study under consideration, entitled “Througput” describes the typical working day of a typical service crew member of a typical McDonald’s store anywhere in the world. In this case, teenage crew member Elisa Zamot’s travails are traced throughout the working day, beginning at 5:30 when she and the manager open the store and get the merchandise ready for store opening at 7:00. All foodstuffs are prepped pre-measured, frozen or dried, needing only to undergo a predetermined routine of heating and reconstituting, using specially designed kitchen appliances and cookware. Zamot’s actions are likewise mechanical and unvarying, Even crewmembers’ interaction with the customer is efficiently prompted by computer terminals in what Dollars and Sense terms “scripting”, for which the crewmember is closely monitored by supervisors. The work is hectic, the hours are long and the pay is low. According to the case study, the concerns surrounding McDonald’s questionable human resources policies may be summed up as follows: 1. Work standardization as it is practiced in McDonald’s gives companies tremendous power over its employees that oppressively constrains the latter’s exercise of discretion. 2. The “de-skilling” of employees makes it easier to replace them with others who will work cheaply. 3. The highly regimented work routines and specialized, (limited) tasks stunts the skills and personality development of the employee. Echoing the situation in this case is the description by Tony Royle of McDonald’s employee working conditions in their European operations. In his review of Royle’s article, “Working for Mcdonald’s in Europe: The Unequal Struggle”, Gonos (2002) seconds the author’s dim view of McDonald’s human resources management system as “a struggle between the opposing forces of economic ‘liberalism’ – the drive for efficiencies, higher profit margins, and deregulation – and Europe’s ‘collectivist’ industrial relations systems.” (p. 278) In this paper, Gonos make a case for McDonald’s circumvention of Europe’s labour standards and employment regulations, bringing to fore the debate concerning the disregard for labour legislation by multinational enterprises who have set up shop in the region. According to Gonos, despite significant divergence between US and European labor laws, McDonald’s had successfully maneuvered through the intricacies and loopholes of the European system in order to maintain uniformity in its HR policies and practices. McDonald’s “liberal” policies are seen to run counter to the European industrial relations system that include highly organized trade unions, codetermination rights, and a mandatory sectoral bargaining process. Gonos describes how Royle criticized the concept of “recruited acquiescence” by which McDonald’s “takes advantage of weak and marginalized segments of the labor market in each country, and the different reasons they are unlikely to resist management control.” (Gonos, 2002, p. 279). It is a regular feature in McDonald’s work practices for managers to be made to work long, unpaid hours, or for workers to be controlled with a set of intricate rules for rewards and punishments. What is worse, the company conveys some sense of legitimacy by securing the active consent of its managers and service crews, in effect causing them to relinquish their rights and entitlements under their respective country’s labour standards. The Favourable Points: Not All is Bad Given the preceding account of all the negative aspects of the application of scientific management at McDonald’s, there is still the nagging question of why and how does this firm succeed. It is the same reason why scientific management, despite its poor reception by the business and academic sectors at the start, still prevails today as the most influential theory to revolutionize the way we do business. When Taylor introduced the use of stopwatches for time and motion studies in 1911, there was such an uproar from organized labour that the US House of Representatives convened a special committee to investigate the matter. After grilling Taylor at length, Congress passed laws banning civil servants from the use of stopwatches. The law prevailed until 1949 when the restriction was abolished. (Accel-Team, 2008) When an unconventional method is first introduced, the normal reaction would be to regard it with suspicion until it has been tested and assimilated. The same holds true for the scientific method, which was regarded as a mechanizing and, thus, dehumanizing way of management. Were one to examine the framework of this school of thought, however, it becomes apparent that the aim was to “objectivize” the management process. Taylor’s framework for management (Accel-Team, 2008) included: Clear delineation of authority – Scientific method seeks to draw the boundary between and among functions, which is necessary to, in turn, fix accountabilities. Seen as authoritarian and hierarchical, the necessity of creating a clear line of authority is a given when running an operation characterized by mass production and standardization. A distinction must be drawn between “authority” and “abuse of authority”. Responsibility – By fixing responsibility, the scientific method serves notice to each worker and supervisor that he/she shall be held accountable for a definite task or activity. This is as much advantageous for the employee as it is useful for management, that clear expectations are created between them. Separation of planning from operations – When the planning section is withdrawn from involvement in operations, it is able to gain a clearer perspective of corporate goals and operational limitations, and thus establish operational objectives without bias. Incentive schemes for workers – Scientific tenets, far from dehumanizing the management process, understands that workers need motivation to attain their goals. It was the first school of thought to link worker output with worker incentives. This gave rise to the human relations theory which further refined the motivational aspect of management by incorporating psychological theory. Management by exception – This concept made it possible to streamline supervision and create efficiencies in the management process. By defining the standards expected to be achieved, it became possible to pinpoint and track problem areas as soon as they develop. Task specialization – This allows the worker to concentrate on a specific set of skills, and to master this limited set. Carried to an extreme and in the wrong situation, this aspect may be viewed as stifling because it tends to limit the worker’s personal development. It is very effective, however, when the nature of the product requires strict standards of quality and uniformity. In the specific case of McDonald’s, the situation for the worker is not oppressive as it may seem. There is a segment of the working population that would benefit from a job that requires little preliminary training and skills. The regimentation of procedure and strict conformity to a set of simplified tasks is well-suited to that group of people that, as the article implies, are just starting out. This is the reason why new immigrants, teen-agers, and housewives are drawn to work as service crews at McDonald’s. The lack of upward mobility and career opportunities is not an issue, because nobody who takes a crew member’s job is deluded into thinking that he or she will remain in that job forever. The temporary nature of the job is not without its advantages. Housewives seek a part-time casual occupation that does not take them too much out of the home. Teen-agers just need to gain some experience, and immigrants need time to assimilate socially so the scripting allows them to cope by creating “short cuts” to social interactions. Besides, many a former crew member came out of the job with a better understanding of the fast food’s operations such as the value chain, inventory management and market preferences, insights that enable them to start their own business. The situation described in the case is far from oppressive. While Elisa is described as getting up early in the morning, most occupations would not consider 5:30 a.m. as unreasonable where the nature of the job calls for it. She is described as working hard for seven hours straight; but seven hours is well within the international standard of an eight hour day, and she gets to go home with enough time to enjoy her afternoons and use it for other purposes. Besides, “working hard” is a relative proposition; there are many more jobs which are more taxing, physically and psychologically, than heating prepared food and dealing with customers whose set of expectations is limited to the menu in the coloured display above the counter. Conclusion Scientific management is the most significant development in contemporary management theory. In the context of today’s more humane approach to management, the principles of Taylorism and Fordism appear harsh and cold. Aside from the fact that scientific management predated the human relations school, and probably even gave birth to it, this does not detract from the fact that management has assumed a more professional countenance because of these principles. There is no doubt that doing business has become more efficient, lessening waste and saving on costs that consumers benefit from. The international success of McDonald’s proves it. After all, the proof is in the tasting. REFERENCES ACCEL Team Development. (2008) Historical Perspective on Productivity Improvement: Scientific Management and Frederick Winslow Taylor. Retrieved April 23, 2009 from < http://www.accel-team.com/Scientific/scientific_02.html> Datamonitor, (2009) “McDonalds: capitalizing on the downturn with an even greater presence”. Industry Comment MarketWatch: Global Round-up. March 2009. Retrieved on April 23, 2009 from < www. datamonitor.com> Dijksterhuis, M.S., Van den Bosch, F.A.J. & Volberda, H.W. (1999) “Where Do New Organizational Forms Come From? Management Logics as a Source of Coevolution” Organization Science, Vol. 10, No. 5, (Sep. - Oct., 1999), pp. 569-582. INFORMS. Retrieved May 23, 2009 from Gonos, G. (2002) “Review: Working for McDonalds in Europe: The Unequal Struggle? by Tony Royle.” Contemporary Sociology, Vol. 31, No. 3 (May, 2002), pp. 278-280. American Sociological Association. Retrived April 23, 2009 from Kephart, J. (2009) “Big Mac and Fries: What You Pay Per Calorie”, SmartMoney.com. Retrieved April 25, 2009 from < http://finance.yahoo.com/family-home/article/106967/Big-Macs-and-Fries-What-You-Pay-Per-Calorie> “Lovin It”. Dollars & Sense. March/April 2006 p. 5 “Frederick Taylor and Scientific Management,” Net MBA Business Knowledge Center. Retrieved April 24, 2009 from Scholosser, E. (2002). “Throughput.” Fast food nation: The dark side of all-American meal. New York: Houghton Mifflin. Thompson, P. & McHugh, D. (2002) Work Organisations, 3rd ed. Palgrave, New York, NY Read More