Rangamati Science and Technology University

A Case Study
On
Integrating McDonald’s Business, Human Resource, and
Staffing Strategies

Course Title : Organizational Staffing

Course Code : HRM-504

Submitted To
Razib Hossain
Lecturer
Faculty of Business Studies
Department Of Management
Rangamati Science and Technology University

Submitted By
Youth Quake

Roll No. Name Reg No Assign Task

28 Md.Fardus All-Amin 2018-21-28 Part-1
14 Arnob Tripura 2018-21-14 Part-2
37 Md.Mosharaf Hossain 2018-21-37 Part-3
38 Tanusree Roy 2018-21-38
02 Emran Ali 2018-21-02

Submission Date: 31-12-2020

 Table of Contents

Serial no. Contents Page No.

CASE STUDY 2-2
PART- ONE 3-6
CASE SUMMARY 3-3
KEY ISSUES 4-4
QUESTION – 1 5-6
PART- TWO 7-7
QUESTION – 2 7-7
PART- THREE 8-10
QUESTION – 3 8-10

CASE STUDY

Integrating McDonald’s Business, Human Resource, and Staffing Strategies

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People are McDonald’s most important asset. The company’s success depends on the
satisfaction of its customers, which begins with workers who have the attitudes and abilities
required to work efficiently and provide good customer service. To execute its growth
strategy, McDonald’s has identified people as one of its three global corporate strategies.
McDonald’s claims that as an employer, it wants “to be the best employer in each community
around the world.” It also makes a “people promise” to its employees that “we value you,
your growth, and your Contributions.”83 Its five “people principles” reflected by its human
resource strategy are respect and recognition; values and leadership behaviours; competitive
pay and benefits; learning, development, and personal growth; and ensuring that employees
have the resources needed to get the job done.

McDonald’s has executed its operational excellence strategy well by tracking key indicators
of product and service quality, speed, and accuracy. The company has also identified its
people practices and approaches that substantially impact the firm’s turnover, productivity,
customer satisfaction, sales, and profitability. This has allowed it to develop a business model
that emphasizes not only financial and operational factors but also people factors that
improve the company’s results by improving employee commitment, retention, productivity,
and customer loyalty.

Because its business strategy relies on providing customers quality, cleanliness, quick
service, and value, McDonald’s works hard at hiring people who want to excel in delivering
outstanding service. Many of its restaurant employees are teenagers, and McDonald’s is their
first employer. The company tries to recruit and hire the best people, retain them by offering
them on-going training,86 and then promote from within to fill its managerial positions. To
ensure that it is recruiting the right people, the company has identified important skills and
behaviours that it looks for in applicants. McDonald’s has found that the best way of hiring
quality crew members is to advertise inside the restaurant and attract local people and/or
friends of existing employees. McDonalds’s also recruits at local job centres and career fairs,
using hiring material with a clear message targeted at its intended audience. As McDonald’s
CEO Steve Easterbrook says, “If you get the people part right, the rest will follow.

PART-1

CASE SUMMARY
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McDonalds believes that a company`s turnover, productivity, customer satisfaction, sales and
profitability relies on human resources because of the most important asset of a company is
people. It focuses on achieving profits through customer satisfaction and efficient workers;
they provide good customer services in the way of accuracy, quality of products and services.
McDonald`s business strategy depends on providing customers quality, cleanliness, quick
service and creating value for customers. It hires the best and potential employees through
advertisement inside the restaurant, career fairs and local job centres as well as retains them
by offering on-going training and internal promotions as a manager. It wants to become the
best employer in each community around the world. Makes people promises and people
principles to its employees. Employee commitment, retention and loyalty are the factors
which go ahead a company with its vision.

KEY ISSUES

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After thoroughly analysis this case study we have found some key points which help us to
solution these three questions. Pointing out the key issues of the case study as follow-

Employee Benefits
Fundamental Success Factors

Respect & recognition

Values & leadership behaviours
Competitive Pay & benefits
People Learning, development, &
Customer satisfaction personal growth
Workers attitudes and Ensuring that employees have
abilities the resources needed to get the
Good customer service job done

Staffing Strategies
Operational Excellence

Tracking key indicators of First Employer (Teenagers)

product and service quality, Recruit and hire the best
speed, and accuracy people,
Substantially impact turnover, Retain them by offering
productivity, customer them to training
satisfaction, sales and Promote from within
profitability (managerial positions)
Emphasizes on Business Model Attract local people
Financial factors
Operational factors
People factors

QUESTION – 1

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How would you describe McDonald’s business strategy? What are the
foundations of its competitive advantage (what are the sources of its success)?

Answer to the Question No. - 1

McDonald’s business strategy is centred on both growth strategy and operational excellence.
By carefully recruiting and selecting its people, McDonald’s ensures that customer service-
oriented people are hired then trains them for acquiring additional skills that are needed for
outstanding performance. Operational excellence strategy are executing for tracking the
people factors that affect business results, the company is able to evaluate and continually
improve the alignment between its staffing and business strategies.

Operational Factors: McDonald´s success depends on the satisfaction of customers. It seeks

to achieve profit by providing the following to the customers:

 Product and Service quality

 Cleanliness
 Quick service
 Create value for customers
 Accuracy

Human Resource Factors: These factors help the company to improve the results.

 Knowledge, skills, abilities and attitudes

 McDonalds claims to be the ‘best employer’ in the world.
 Employee commitment,
 Employee retention
 customer loyalty
 productivity

The foundation of its competitive advantage: The foundations of its competitive advantage
are both its people and its processes.

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Operational Excellence: Focus on product produce in efficiently and quick delivery of
product or services.

 Cost: McDonald´s low cost provider because of its low employee turnover, low
advertisement and recruiting costs.
 Quality: McDonald´s execute operational excellence strategy which ensures best
quality of product and service than rivals.
 Speed: Operational excellence strategy also excel at getting its product or service to
consumer quickly or to take least amount of time.

Customer Intimacy: Objective is long term customer loyalty and long term customer
profitability.

 Service: McDonald´s is hiring those who want to excel in delivering outstanding

service before, during and after the sale of products or services.
 Convenience: McDonald´s hire from local people through advertisement inside the
restaurant for customers convenience.

PART- 2

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 QUESTION - 2

How McDonald has aligned its business, human resource and staffing strategies?

Answer to the Question No. - 2

McDonald’s is a fast food retailer in America. They are very popular for their hamburgers
and also include a local menu of food and drinks at various price points. The company is built
on a foundation that gives a hostile benefit and consistent and flexible business strategy. The
most important asset of the company is people and their success depends on the satisfaction
of their customers. The process requires employees to introduce new product expansion and
create advantage in the marketplace. It also encourages the employees to maintain new ideas
into the company. Pursuing both growth and operational excellence strategies requires a
continual influx of employees with good customer service skill, providing ongoing training
and development and retaining talent.

Staffing Strategy is considered as a part of the future decision in continuing the global
expansion. The company will hire employees and ensure a secure working environment by
promoting them to the top positions based on their performance. Moreover, the employee’s
performance is evaluated systematically and motivates them by giving rewards and
recognition.

PART- 3

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 QUESTION - 3

 What are some possible talent-related threats that could eat away at
McDonald’s competitive advantage?
 Would higher turnover or a tight labor market in which it is difficult to find
talented people be a problem?
 What would you recommend the company do to maintain its competitive
advantage over the next five years?

Answer to Question No - 3

After studying this Case Study Question no 3, you should be able to:

The Firms Talent Philosophy

An Organizations talent philosophy is a system of beliefs about how its employees should be
treated. Typically shaped by its founders, it reflects how an organization thinks about its
employees.

A firm’s human resource strategy links the entire human resource function with the firm’s
business strategy. Strategic human resource management aligns a company’ s values and
goals with the behaviors, values, and goals of employees.

The Firm’s human resource functions including its staffing -

Performance management, training and compensation functions.

Business Strategy Definition: how a company will compete in its marketplace.

Competitive advantage: anything that gives a firm an edge / advantage over rivals in
attracting customers and defending itself against competition.

To have a competitive advantage a company must be able to give customers superior value
for their money (a combination of quality, service, and acceptable price)

Sources of Competitive Advantage

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  Service: Provide the best customer support before, during, or after the sale.
 Quality: Provide the highest quality product or service.
 Cost: Be the lowest-cost provider.
 Bradding: Develop the most positive image.
 Speed: Excel at getting your product or service to consumers quickly.
 Other: Source of Competitive Advantage including - Convenience, First to market,
Distribution, Innovation.

Types of business strategy

1. Cost leadership strategy: be the lowest cost producer for a particular level of product
quality (Wal-Mart, Dell, FedEx) Competitive advantage based on operational excellence:
maximizing the efficiency of the manufacturing or product development process to minimize
costs

2. Differentiation strategy: developing a product or service that has unique characteristics

valued by customers (Johnson & Johnson, Nike, 3M) Competitive advantage based on
product innovation.

3. Specialization strategy: focus on a narrow market segment or niche and pursue either a
differentiation or cost leadership strategy within that market segment (Starbucks and Red
Lobster) Competitive advantage based on customer intimacy: deliver unique and
customizable products or services to meet their customers’ needs and increase customer
loyalty.

4. Growth Strategy: company expansion organically (happening as the organization expands

from within by opening new locations) or through mergers and acquisitions Success depends
on the firm’s ability to find and retain the right number and types of employees to sustain its
intended growth.

Organic growth requires an investment in recruiting, selecting, and training the right people
to expand the company’s operations.

Mergers and acquisitions expand an organization’s business and can also be a way to acquire
the quality and amount of talent a firm need to execute its business strategy.

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5. Deriving Staffing Strategy: An organization’s staffing strategy should be derived from
and be clearly supportive of its overall human resource strategy. The strategies developed for
each HR functional area should support the overall human resource strategy. The strategy of
each functional area of human resources should complement the strategies of the other areas
as well as the organization’s higher-level human resource strategy.

 TALENT RELATED THREATS THAT COULD EAT AWAY MCDONALDS:

 Difficulty in finding people

 Own franchisee due to enough training and work experience
 Possibility of the teenage employees to switch to other companies.

 WOULD HIGHER TURNOVER OR TIGHT LABOUR MARKET IN WHICH IT

IS DIFFICULT TO FIND TALENTED PEOPLE BE A PROBLEM?

A tight labor market would make hiring more difficult especially in the younger age bracket,
it hires from the most. Higher turnover would also be a problem, and be particularly
expensive in light of its training investments. To maintain its competitive advantage,
McDonald’s could further build its image and brand and find ways to appeal to its biggest
labor pool of teenagers (it is in the process of redesigning its uniforms, for example). It could
also find ways to retain current workers, and target its recruiting message and benefits as an
employer to additional segments of the labor force such as senior citizens and people who
need part-time or flexible work arrangements due to school or family responsibilities.

 RECOMMENDATIONS TO THE COMPANY:

 Expand its outlets in various parts.
 Regular SWOT analysis.
 Detail study of changing trends.
 Training according to the changing demands.
 Providing health and financial benefits to the employees.
 To adjust prices.