International Human Resource Management- BAM 6004

CONVERGENCE & DIVERGENCE

----
The case of McDonald’s in
international markets

Presented by:
• Nguyen Minh Khang _ 1412366
• Tran Thanh Thao _ 1412371
• Vo Thi Thanh Tam_ 1412370
• Le Thi Hoang Nguyen_ 1412367
Table of contents

Section 1: Section 3:
Globalization Hofstede’s cultural
The pros and cons of theories
going global Section 4:
Section 2: McDonald’s - Headquarter
International HRM McDonald’s – France
Convergence & Divergence McDonald’s - China
Recruitment & Selection Section 5:
Training & Development Recommendation
Conclusion
Globalization
Globalization is a process of
economic integration through
a worldwide network.
(Armstrong, 2010)

Globalization is seen as the

movement of different countries
toward an economic,
communication and financial
integration (Kapoor, 2011)
 PROS
• Accelerate economic
growth
• Free trade activities
• Create economies of scale
in production
• Reduce unemployment
(Laurel Delaney, 2014)
CONS
• Fierce competition
• Culture diversity
• Political and legal
differences
• Bias and prejudice
(Griswold, 2000)
Section 2: International HRM
International HRM

A set of distinct activities, functions and processes that are directed at attracting,
developing and maintaining the human resources of a multinational company
(Rennie and McGee, 2012).
 Importance of IHRM

IHRM involves in all

issues related to
managing the global
workforce and its
Globalization of
contribution tobusiness
firm
requires IHRM to adopt
outcomes
appropriate human resource
policies and knowledge
management in consideration
to the cultural differences
that may arise on the
process.
(Ali, 2013)
 Convergence and Divergence

• Convergence: when the elements of culture

spread by one group are accepted and used by
another group

• Divergence : when new cultural elements are

limited in a particular group

Allan et al (2005)
Recruitment & Selection
• Employees are the most valued assets contribute to
the achievement of company’s objective (Armstrong,
2006).
• The most complex activity and function of IHRM
• Includes the activity of attracting, recruiting and
maintaining talented people to achieve
organizational goals.
• Recruit employees from three sources: PCNs, HCNs
and TCNs

(Torrington, 1994)
 Recruitment approaches
Polycentric Ethnocentric Geocentric Regiocentric
Approach Approach Approach Aproach

- Hiring PCNs to - Keep PCNs in the - Hiring the best - Recruitment is

control in the HQ, hire HCNs people disregard based on a regional
headquarter manage subsidiaries their nationalities level from countries
in the host country
- Unified culture - Overcome lack of - Use human - Acquire talents
- Inexpensive to qualified resources with similar
implement managers efficiently cuture
- Competencies - Improve - Help build strong
transfer knowledge management
through culture networks
exchange

Source: Bonache and Fernandez (1999)

Training and Development

Employee Career
Employee development
training development  assists
 employees  company employees in
gain better ensure the advance
skills for their quality of their work
jobs HR for lives
future
Section 3: Hofstede’s cultural theory
Hofstede’s dimensions
• The degree to which power distribution
Power distance equally in organization

Uncertainty • The degree to which risks or uncertainty

avoidance tolerance

Individualism - • The degree to which people’s preferences are

collectivism connected with groups or individual values

Masculinity - The degree to which a society has perception of

Femininity gender’ role

Long/short term The degree to which a society values long-term or

orientation short-term goals

Source: Five Dimensions of culture (Muslin 2010)

Section 4- McDonald in US
 MCDONALD’S OVERVIEW

• Don' Thompson (CEO)

• Steve Easterbrook
(Vice president)

• Hamburger
• Chicken
• Coffee
• Milkshakes

(McDonald’s, 2015)
Vision:
-To be the world’s best
quick service
restaurant
experience.

Mission statement:
- Be a favorite place
and way to eat and
drink of customers
McDonald’s HRM Policies

Trainings and
Recruitment Development
& Selection Strategy
Welcome Meeting: job roles, hygiene and safety training, Policies and
Ethnocentric
procedures, recruiting approach in the US to sustain
administrations,… long-
term development.
 “On the job” training , Classroom training
Recruiting tools: - advertising posters in restaurants
- notice
McMaster program: recruits, in and
trains local job centers,
maintains workers career fairs
age 55 and above.
and other local faculties
Organizational Culture Trainings, Designed workshops
 The company's recruitment history shows this is the
best method
McDonald’s of hiring
‘Hamburger qualitystaff.
University” training programs for the youth.
 Rewards & Benefits

Performance appraisal
• McDonald’s benefit program is designed to attract, energize,
reward and retain talented people who will produce superior
business results and enhance their leadership position.
Common performance appraisal tool:
• Benefits:health insurance, educational assistance, sabbaticals,
Graphical rating
child care, etc. scale

360 degree
• The feedback
rewards are given on the basis of the staff performance
(10% in salary), if performance is also counted then 20%
increment given at anytime of the year.
MCDONALD’S IN FRANCE
• Ethnocentric Approach,
Divergence

HRM is different from parent company 

adapt to the host country culture

 Mc. Donald’s launched a massive recruitment

drive, mainly for young worker in France

 HR policy is base on professional

development them include training,
promotion, internal mobility

 Using PCNs managers, but HCNs manager is

also have right to participate in strategic
decision making process.
 McDonald’s in France

Source: The Hofstede Centre (2015)

McDonald’s Success in France - Divergence
 High individualism  French managers have right to make
decision themselves  respond to the market in time satisfy the
expectations of local customers.
 High uncertainty avoidance  Adapting to the French preferences
 Ethnocentric staffing have higher
tendency to control the subsidiary
 High power distance  Recruitment process is reported to
PCNs promote consistency
 MCDONALD’S IN CHINA

• Polycentric Approach, Convergence:

HRM is mostly similar to the parent company
- Introducing new recruitment model 
approach young people seeking jobs
- Employees training through video tapes. A level
of competency is demonstrated & checked off
on SOC
- PCNs have full power on managerial decisions
 different working culture in Chinese market
 McDonald’s in China

Source: The Hofstede Centre (2015)

 McDonald’s failure in China - Convergence

• Facing language barriers

• Applying the concept of drive through restaurants

• Low uncertainty avoidance  Replicating McDonald burger

 decreased sales.

• High collectivism  Chinese prefer to work in group

• High power distance  Decisions belong to PCNs

 Adaptation strategy in host country was not taken seriously

RECOMMENDATIONS
Paying attention to cultural differences

Be careful when choosing convergence

and divergence strategy

Hire more HCNs to manage subsidiaries,

cooperate with local partners to minimize
cultural threats and misunderstanding

Considering which positions should be given to

PCNs/ HCNs/ TCNs to get the best
job performance
 CONCLUSION
• Globalization has become a trend for businesses to expand its
operations oversea. However, it brings both positive and negative
effect to organization, including HRM activities.
• One of the hardest challenge for IHRM is culture. Cultural
convergence and divergence relate to the way in which company
globalize or localize its culture with the host country culture.
• McDonald’s success in France and failure in China showed that
companies have to be smart in deciding whether to choose
convergence or divergence to succeed in international markets.
 References
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