External and Internal Factors Affecting McDonalds – Management Theory Paper

External and Internal Factors Affecting McDonalds – Management Theory Paper
The purpose of this paper is to discuss external and internal factors affecting McDonald’s management functions. This will be accomplished by explaining how McDonald’s deals with each of the external and internal

factors. There were three factors that were chosen to outline the success of McDonald’s corporation. The first factor is globalization, which is define as closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between “world citizens”. Diversity, the difference among people and cultures, is the second factor discussed in the paper. The final factor is ethics, which can be defined as a set of principles of right conduct. This paper explains how the McDonald Corporations uses the factors to conduct business around the world.

In today’s society, corporations and enterprises are expanding their businesses in the global markets. Globalization is necessary for success and survival in the worldwide market; however, global competition is not easy (Bateman & Scott, 2004). By the end of the twentieth century, the list of Fortune 500 companies was no longer only United States corporations due to an increase in international companies joining the list (Global Capitalism, 2005). As a leading food service retailer, McDonald’s joins those corporations with restaurants in 119 countries (McDonald’s, 2004). Important strategic decisions are a key factor to their success with consideration for both internal and external factors. When considering the foreign market, companies need to consider there are risks. There must be local marketing to appeal to the local consumers and also to build relationships and trust (Bateman & Scott, 2004). Therefore, the strategic planning for marketing has to be effective. McDonald’s caters its menu in other countries to the cultures of the regions. For example, in India, the non-vegetarian menu includes chicken and fish items only (Welcome, n.d.). Beef is not on the menu in India because are considered sacred. Global marketing decisions are no different than those made domestically but the decisions are unique to each country (Sister & Sister, 2005). Furthermore, operating on a global scale allows a company’s employees to experience working in different cultural environments. This is a good marketing strategy for recruiting employees. McDonald’s has a global core curriculum for its restaurant management (McDonald’s, 2004). Paula Doherty, a general manager states, “I’ve had incredible experience in different countries and…cultures…as a trainee manager – from Poland to Israel to the Philippines and more. Doing the job successfully has given me a real sense of achievement” (http://www.mcdonalds.co.uk/?f=y). This business strategy speaks to their commitment to a diverse workforce.

McDonald’s commitment to diversity is established on the foundational belief that diversity is not just a moral and ethical issue, but also a business issue (McDonald’s, 2005). Due to the global expanse of McDonald’s business, diversity has become an integral part of the internal company culture. McDonald’s has over 30,000 restaurants around the world, which means franchise owner/operators, employees, and customers represent just about every culture, religion or ethnicity on earth. In addition, McDonald’s promotes the use of local suppliers and based on their policies of diversity, expects and retains suppliers that have a similar diversity culture. Knowing and understanding the local customs and traditions of the communities where McDonald’s has established businesses, integrating people from these communities into the company, and adapting locally to the tastes and cuisines of the community, has made McDonald’s the leader in their industry.

In the United States alone, McDonald’s has won numerous awards and received national recognition for diversity. According to McDonald’s website, www.mcdonlads.com, awards include; PUSH-Excel Corporate Partner Award, Corporate Achievement and Image Award, Nullities Corporate Award, Corporate Vision Award, and the Circle of Inclusion Award. These awards and recognitions are not the result of a surface attempt to appease the critics. They are the result of McDonald’s embracing and integrating diversity into their company ethos as an asset and an ally.

McDonald’s realizes that having diversity as an asset greatly enhances the profitability of the company. Diversity is a direct reflection of a company’s interpersonal relationships. These relationships, if positive, result in a rewarding venture. Conversely, if the relationships are negative, the company’s morale declines and if not addressed, leads to the deterioration of the company. This deterioration directly impacts the company’s income and the community’s acceptance of the business. However, McDonald’s leadership encourages diversity through their policies and programs. McDonald’s proven success with leveraging the advantages of diversity can be attributed to their core value of ethics.
McDonald’s success is built on the foundation of personal and professional integrity (www.mcdonalds). From the beginning, McDonald’s has based its reputation on trust and dependability, and their commitment to the community made them a household name. Founder Ray Kroc, believed in giving something back to the community in order to make the world a better place. Throughout the 1970’s, McDonald’s became involved with a lot of charity work. In 1974 established a charity called Ronald McDonald House. The purpose of this program was to provide temporary housing for the families of seriously ill children receiving treatment at nearby hospitals. Since the 70s, more than 10 million families around the world benefited from the comfort provided by Ronald McDonald Houses (www.rhmc).

In addition to their community involvement, McDonald’s has a long-standing commitment to environmental protection. Restaurants around the world have innovative programs for recycling, resource conservation, and waste reduction. The environmental achievements of this corporation have been recognized by organizations such as the Audubon Society, Conservation International, Keep America Beautiful, the National Recycling Coalition, and the U.S. Environmental Protection Agency (www.mcdonalds).

McDonald’s is also an equal opportunity employer. As an equal opportunity employer McDonald’s ensures that employees and job applicants are selected, trained, and promoted without discrimination to race, gender, sexual orientation, age or disability. The company promotes their employees based on their relevant skill, talents, and performance. In support of this McDonald’s promotes and sustains a working environment, which is free from unlawful discrimination, harassment and bullying. Employees are regarded as members of a team where everyone’s opinion is valued and respected. The Human Resources department monitors the effectiveness of the discrimination policies at regular intervals and takes corrective action as necessary to ensure that they being complied with (www.mcdonalds). Employees who feel that they have been treated unfairly are encouraged to use the remedies outlined in the Company’s handbooks. McDonald’s ethical standards, as well as their strategies for globalization and diversity are instrumental to the overall success of the company.
The purpose of this paper was to discuss external and internal factors that have affected McDonald’s. This was achieved by explaining what the factors are where and how McDonald’s dealt with each of the external and internal factors. The factors discussed were globalization, diversity, and ethics. The paper illustrates how globalization is necessary for success and survival of McDonalds in the worldwide market. The paper also shows how diversity integrated people from different communities into the company, and adapted tastes and cuisines of the community. McDonalds showed ethics by being an active leader in the communities. There are many different values to the dollar around the world, many issues that have occurred in many of those regions/websites, and about 119 countries served by McDonald’s that rely on the functions of management to succeed.

Bateman, T.S., & Snell, S.A., (2004). Management: The New Competitive Landscape (6th ed). New York, NY: McGraw-Hill Company.
McDonald’s, (2005). Retrieved October 9, 2005, from McDonald’s website: http://www.mcdonlads.com/corp/values/diversity/supplierdiversity/commitment.html
McDonald’s USA corporate responsibility report: 2004. (2004). Retrieved October 9, 2005, from http://www.mcdonalds.com/usa/good/report.RowPar.0002.ContentPar.0002.ColumnPar.0001.File.tmp/USA%20Report%20Layout%20(No%20Back%20Cover)%20(12-1-04).pdf
Robinson, W. I. (2005). Global capitalism: the new transnationalism and the folly of conventional thinking. Science & Society, 69(3), 316. Retrieved October 10, 2005, from ProQuest database.
Sustar, B. & Sustar. R. (2005). Managing marketing standardization in a global context. Journal of American Academy of Business: Cambridge, 7(1), 302. Retrieved October 10, 2005, from ProQuest database.
Welcome to McDonald’s India. Retrieved October 10, 2005, from http://www.mcdonaldsindia.com/ourfood/nonveg/index.html
www.mcdonalds.com, People, 2005

www.mcdonalds.com, Environment, 2005

www.rmhc.com, Ronald McDonald House Charities, 2005