“MCDONALD'S: REVAMPING

ITS POOR EMPLOYER IMAGE”

PRESENTED BY:
SHIVANI KHANDELWAL
SHUBHAM BHATNAGAR
(MBA 2ND YEAR)
TECNIA INSTITUTE OF ADVANCED
STUDIES
INTRODUCTION
 Company name – McDonald’s Corporation

 Established in – 1937, at Arcadia, California

 Started by – Dick and Mac (Two Brothers of McDonald’s)

 Founder of the McDonald’s Chain – Raymond Kroc

 Position of the company in 2005 – more than 30,000 local restaurants serving more than 50 million

people every day in more than 119 countries

 No of employees – 4,47,000 (2005)
 Revenue - $20.460 billion (2005)

 Competitors – Yum Brands(A&W Restaurants, Kentucky Fried Chicken(KFC), Long John Silver’s,

Pizza Hut, Burger King, Wendy’s, and Taco Bell)

WHAT IS MCJOB?
In June, 2003
 One of the publication – Merriam-Webster’s Collegiate Dictionary defined the word
“McJob” as a –
 Low-paying
 Unskilled
 Dead end job
 Unstimulating
 Also ‘McJob’ is different from ‘McJob’ as MCJOBS is the registered trademark of
McDonald’s used for the company’s training programme for mentally and physically
challenged people.
 OBJECTIVES
To understand the HR To study the problems
issues in the fast-food faced by employees at
industry. McDonald’s.

To understand whether
To analyse the efforts
the initiatives taken by
of McDonald's in
McDonald's would help
changing its image as a
change its image as a
poor employer.
poor employer.
 In 1937, two brothers, dick and mac BACKGROUND
McDonald (McDonald brothers)
opened a 'hotdog' stand called the air
dome in Arcadia, California.
 In 1948,the brothers then started
offering a simple menu of hamburgers,
French fries, and milkshakes, produced
on a continuous basis unlike other
restaurants.
 Food was thus served almost
instantly in paper bags - a new idea
that dick called "fast food".
 In 1955, Kroc opened a McDonald's franchisee at Des Plaines, and
subsequently became a national franchisee agent for McDonald's.
 Kroc was hence called the Founder of McDonald's chain.
 In 1961, Kroc purchased the company from the McDonald brothers
for $2. 7 million and Kroc renamed the company ‘McDonald’s
Corporation’.
 McDonald's expanded to other countries and also in the US through
company-owned stores and franchises.
 McDonald's Profit Margins for Franchised Stores
Compared with the average margin of 15% from company-operated
restaurants, franchised operations retained an average of 80% of revenues in
profit for McDonald's

Australia/Asia pacific 86.7%

United States 81.4%
Europe 76.9%
Canada 76.8%
Latin America 68.5%
Source: (http://internationaltrade.suite101.com/article.cfm/mcdonald_s_sues_copycats)
 Kroc provided guidance to each store relating to operation,
promotion, sales strategy, financing and food processing.
 This ensured that McDonald's restaurants would serve food
according to fixed specifications and quantity.
 He allowed franchisees to exercise their innovative skills relating to
every aspect of their business.
 The standardization of McDonald's operation proved to be an
advantage to McDonald's as it not only provided cost standards for
outlets, but also enabled the outlets to compare their sales ratios
with other outlets of similar shop floor space.
 By 1963, more than 1 billion McDonald's
hamburger were sold, and the statistic was
displayed on a neon sign in front of each
restaurant.
 In the same year, the 500th McDonald's restaurant
was opened and the famous clown, Ronald
McDonald made his debut.
 It became so famous that 96% of American
children were more familiar than the US
president.
A. TO UNDERSTAND THE
HR ISSUES IN THE FAST-
FOOD INDUSTRY.
 HR ISSUES
1. There was no pro-employee policy
2. Contradiction of HR policies
3. No trade union recognition
4. No conflict management
5. There was master and slave relationship rather than employer-
employee.
B. TO STUDY THE
PROBLEMS FACED
BY EMPLOYEES AT
MCDONALD’S
MCEXPLOITATION
 Employees faced the following
problems:
 No fixed working hours
 No minimum wages paid
 Unsafe working conditions
 Harassment at workplace
 Discrimination on the basis of skin
colour, nationality, gender, etc.
 No platform to express their views
CAMPAIGNS AGAINST MCEXPLOITATION
1) In 1986: London Greenpeace
 Published a 6-sided fact sheet- which exposed the
reality:
 Less healthy and nutritious food
 Animal cruelty
 Damage to the environment
 Exploitation of workers
2) In 1993: Leaflets circulation in Beijing
 Leaflets showcase the deteriorated working
conditions in McD
3) In 1993: Iceland protest
 Strikes and boycott threat were into play because
mcd refused to negotiate with the trade unions.
4) In 1994: Massy, France
protest
 67 workers called for a
surprise strike
 Closing the store during the
busiest hours
 They demanded:
• Right to engage in union
activity
• Paid vacations
• Right to choose their own
delegates
• Personal needs recognition
5) In 2006: SuperSizeMyPay.com
Campaign
 They previously targeted:
 KFC
 Starbucks
 Pizza hut
 Their 3 aims at McD's were:
 $12 an hour minimum
wage
 End to youth rates
 Secure hours if work
6) In 2001: Anti-McDonalds
campaign
 It displayed mcd’s negative
practises
 Group of activists entered
some outlets and leaflets
were distributed
 They decided to carry
demonstration every
Thursday from 5:30pm to
7:30pm
C. TO ANALYZE THE EFFORTS
OF MCDONALD'S IN
CHANGING ITS IMAGE AS
A POOR EMPLOYER.
 INITIATIVES TAKEN BY MCDONALD'S
REVAMPING ITS POOR EMPLOYER IMAGE BY
TAKING THE FOLLOWING INITIATIVES:
 1) A LETTER TO MEDIA ORGANISATION
 McDonald's CEO, Jim Cantalupo said that the definition was a
'slap in the face' to the 12 million people who worked in the
restaurant industry.
 In an open letter to Merriam Webster, he further said that the
definition was 'an inaccurate description of restaurant
employment’.
 The company also e-mailed the letter to media organizations,
and it was published in the November 3rd edition of an industry
trade publication.
2) POSTER CAMPAIGN
 McDonald's selected some advertising sites in the country that were known as
the ‘most expensive promotional real estate’ on the planet.
 The Vice-president of McD's said,” the existing definition of McJob is outdated.
A huge gap exists between the external perception and internal reality of
working for McDonald.”
 The campaign includes 18 ads depicting McD's positive business practices:
• Flexible working hours for parents
• Competitive pay
• Promotion options
• Health benefits: Mcbenefit
• Company’s investment in people status’: Mcvalued
D. TO UNDERSTAND WHETHER
THE INITIATIVES TAKEN BY
MCDONALD'S WOULD HELP
CHANGE ITS IMAGE AS A
POOR EMPLOYER.
 A RESEARCH STUDY- ‘BRIGHTER FUTURES’
~Adrian Furnham

 A survey of 475 people including young McDonalds employees, their

parents, teachers and McDonald managers.
 Results:
• 9/10 parents said that working at McD was good for their children
• 72% noticed positive changes in their children
• The job helped in improving communication skills
• Better promotion prospects than other companies
• Happy and motivated corporate culture
HOW THE RESEARCH WORKED AS A CATALYST FOR MCDONALD?

• Poster campaign
MCDONALD • Letter to media organisation

• He concluded happy and motivated corporate culture

RESEARCHER at McD's

• Redefined McJob
PEOPLE • Perception was changed
Strengths
• Start selling burger with the
cost of 15 cent.
• Produced on continuous
basis unlike other
restaurants.
• Followed assembly line
method of Henry ford
Opportunity
• During the saturation in the
US market, McDonalds
focussed on overseas
expansion.
• At that time, its restaurants
were growing at a rate of
about 500 per year.
• Weakness
• The company is against the
unionization.
• Poor working condition
• Low wages
• Discriminations
• No fixed hour for employees
• Harassment at the workplace
Challenges
• Even after facing lots of
criticism and anti-campaigns,
the company never bear loses.
• Gave fines several times after
losing court cases.
• Staff Turnover rate was 130%
and manager turnover rate
was 42%
  McDonald's performance was based:
• on its brand image,
• its exponential historic growth,
• the taste of its food.
 However, since the 1980s, the company was
CONCLUSION also being known for its various unethical
practices such as:
• promotion of fast-food,
• the unethical targeting of children,
• animal cruelty,
• damage to the environment and
• exploitation of workers.
 The company faced several protests, boycotts, pickets, strikes,
lawsuits and campaigns throughout. It gave fines several times after
losing court cases but it never affected them financially.
 McDonald's always seemed to be ignorant about its image as an
'unethical company'. But, after the McJob definition featured in
Merriam- Webster's collegiate dictionary in June 2003.
 The company wanted to redefine ‘McJob', and also to dispel the
'misconception' among people about its performance as an
employer.
 Hence finally, McDonald was able to revitalize their poor employer
image.
 FUTURE SCOPE
At the end of 2006, the company achieved success in re-improving its
poor employer image…………
 But this could happen again in the future if the organisation not
followed Employee-centric approach while formulation and
implementation of its policy.
 In the particular research by Adrian, it was revealed that 72% of the
parents noticed positive change in their children attitude after
working in McDonald’s. but what about other 28% of the parents?
• For this the company should adopt some more initiatives like
worker’s participation in management, employee engagement
activities, introduce employee friendly policies, promote
workforce diversity.