How does McDonaldization affect the fast food industry in China?

Abstract
In 1983, the term McDonaldization is made famous by the American sociologist, George Ritzer.
While it is arguable that the phenomenon of McDonaldization is influential in sociology, it is no
doubt that the operation of McDonalds restaurants, being the top fast-food chain in the world has
influenced the economy (Giddens 2009). McDonaldization is the process by which the principles of
the fast-food restaurants are coming to dominate more and more sectors of American society as
well as the rest of the world (Ritzer 1993). In recent decades, China is a rising power which draws
frequent comparison to the United States of America (Jacques 2009). Hence, this review will focus
on the McDonaldization effect on the fast-food industry in China.
Four Guiding Principles
Mcdonaldization is making the fast-food industry practices more competitive in terms of types of
products offered (Guenette 2009), production process (Ritzer 1996) and pricing strategy (Ahuvia &
Izberk-Bilgin 2011). The four guiding principles for McDonalds franchises - efficiency, calculability,
predictability and control (Weber 1978) have resulted in food industry being more rationalized with
time (Giddens 2009). These four principles which can be said to have governed the fast-food
industry are interrelated in determining the products and streamlining the production line (Ritzer
1996).
Homogenous Products
The predictability principle has resulted in the menus of fast food chains being similar and simple
where customers know exactly what they want before stepping into the chain (Ritzer 1996). In 1940s,
the creators of McDonalds had offered a large menu and later realised most profit came from
hamburgers (Boas & Chain 1976). Plotting this into the Bolton Consulting Group Growth Matrix, the
McDonalds brothers established a streamlined menu with stars products which has high market

share and high growth rate, ie the hamburgers and fries. Fast forward when McDonaldization
evolved in 1980s, most fast-food chain offers limited variety of products which are the stars products
of the fast-food chain. An interesting observation arises by looking at the top 10 fast food chains in
China (China Daily 2014), only two chains are offering Asian food product which can be branded as
creative (Ritzer 1996) , but the remaining eight chains offer western fast-food (China Daily 2014).
This is an evidence that the Chinese consumers perceive Western goods as luxury and a symbol of
status (Hendrikse et.al 2008). But there are sceptics saying that the Chinese is not moving to
Westernisation but rather modernisation (Doctoroff 2012).
The calculability principle allows fast-food industry to have the perfect portion of meal to all
customers (Ritzer 1996). Fast food chains which have strong market power (ANZ 2013) can increase
the sales where quantity is seen to be more valuable than quality of products (Ritzer 1996). With this
principle, the fast-food industry phases out the bargaining power of suppliers as the fast-food chain
is in control of the types and quantity of ingredients (Porter 2000). This quantitative nature has
allowed fast-food chain to ensure the control of predictability and efficiency (Ritzer 1996).
Assembly Line in Production
The control principle, where fast-food industry uses assembly line is a scientific management
approach which can be known as the Henry Ford production line or Taylorism (Guenette 2009). The
working environment in fast food chains are limited to machineries and a small amount of
employees to control the machineries. This provides the consistency of products across time and
geographical region (Ritzer 1996). The sense of control gives fast-food corporations the regime of
bureaucracy (Weber 1976) which is widely commonly in corporation these days. Additionally, the
Taylorism assembly line would almost guarantee profitability as the corporation is in control from
estimating demand to providing supply (Ritzer 2006).
Fast-food industry has adopted the idea of selling efficiency as part of the product package by
keeping the price low and short waiting time (Ahuvia & Izberk-Bilgin 2011). With this, fast-food

chains have established themselves as price-maker (Galbraith 1970). Referring to Michael Porters
Five Competitive Forces that Shape Strategy, buyers do not have bargaining power (Porter 2000). In
better words, fast-food consumers do not need bargaining power as the fast-food product is offered
at a bargained price where consumers seek for speed and quantity, rather than quality. The Big Mac
Index published by The Economist since 1986 suggested that using the price of Big Mac, it can be
deduced that the Chinese Yuan is undervalued by 42.2% in January 2015 (The Economist 2015). It is
alternatively suggesting that the Big Mac in China could have sold at a higher price, but the Chinese
consumers have settled with the equilibrium price of $2.77 for a Big Mac. As suggested by Porter,
the rivalry among existing competitors will offer similar pricing strategy as long as the firms achieve
the efficiency.
What is next?
The fast-food industry in China is predicted to expand by 2015 (ANZ). The world is moving on to
Digital Taylorism where the idea of efficiency is more maximised than before (Brown et.al 2010). We
also observe some transforming trends of Chinese consumers where the fast-food industry is further
westernised or modernised with high-end delicacies (Gerth 2010). While digital Taylorism further
emphasising on higher standardisation, a high-end concept would suggest some sort of innovation in
the fast-food industry which is no longer predictable and under controlled.
However, the growing fast-food industry will keep up and the new concept will bring on higher
profitability (Business Insider 2014). In the United States of America and Asia, there is a rise of
upscale gourmet fast-food restaurants (Independent 2012). The McDonalds in Australia has started
experimenting with gourmet caf to challenge the upmarket (Dailymail 2014). It is only the matter of
time that China will join the bandwagon.
The hypothesis is McDonaldization will preserve and like Weber aptly put, we will still be trapped in
the iron cage of bureaucracy. What does this change means to McDonaldization and its four

principles? The next step is to start with a simple model that captures the relationship of the four
principles and the fast-food chains strategies involving products and the production line in China.

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