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McDonald’s, based in California, USA, has become the most famous and successful fast-food restaurants all over the world. Since the first McDonald’s opened in 1955, till now, McDonald’s has established more than 32,000 chain stores over 100 countries, serving more than 60 million people each day, and gaining around 15 billions incomes per year. In addition, McDonald’s keeps enhancing its brand imagine through different social activities and the sponsorship of special events and sports.
(www. McDonalds. com. au) Why McDonald’s is so successful? How can it achieve this?The reason why McDonald’s is so successful is it well implements several business strategies. This essay is going to analyze the recipe of success of McDonal’s and argues that how business strategy influence the staffing strategy. The business strategy of McDonald’s is to deliver outstanding service to its customers, that is to provide its customers quality, cleanliness, quick service and value. Poter’s specialization strategy can help better understand McDonal’s business strategy. Poter (as cited in Phillips and Gully,2011, pp. 31) stated that firms using specialization strategy can be either cost leaders or differentiators.Such a strategy “focus on a narrow market segment or niche-a single product, a particular end use, or buyers with special needs”.
Companies pursue specialization strategy can focus on a particular buyer group, either through a low price or differentiated products or services that other competitors cannot imitate. The nature of McDonald’s product is food which everybody needs this makes the idea of a narrow focus strategy a little less likely for McDonald’s. The specialization strategy is a combine of cost-leadership strategy or differentiation strategy.Businesses adopt such a strategy often try to develop a competitive advantage through customer intimacy and try to gain and increase customers’ loyalty through meeting their customers’ needs by delivering unique products or services. When hiring empolyees, it is very important that employers should focus on employees’ good people skills.
McDonal’s competitive advantage is to provide its customers quality, cleanliness, quick service and value.
In such a situation, hiring people with experience and good interpersonal skills can help Mcdonal’s to implement its business strategy However, many of its restaurant employees re teenagers without any work experience. Why is that? As Bechet( 2002, p. 167)stated, business strategy can influence staffing strategy. McDonal’s specialization strategy can be either cost leadership strategy or differentiation strategy. The main focus of cost leadership strategy is to keep costs and prices low. Organizations that adopt such a business strategy are try to build up a competitive advantage based on operational excellence that is to maximize the efficiency of the product development to minimize costs(Phillips and Gully 2011, pp. 0). Such an operational excellence requires companies to employ employees trainable and flexible, and have the ability to fulfill short-term production objectives by avoiding waste and lowering the company’s production coasts.
Consequentially, it is not desirable to hire people who have experience and have high salary expectation because by adopting this strategy, employees require to work as team with a tight margin. It is not effectively for teamwork considering that employees pay disparity(Phillips and Gully 2011, pp. 31).In addition, McDonal’s is chain restaurants and views its employees as most important asset, which means that when hiring employess, it is necessary and significant to manage costs and control the asset, like managing other asset such as equipment or steel. As a result, the acquisition and deployment of the cheaper and the quicker the labor the better. By knowing this, McDonal’s turns to working hard at hiring employees without experience, but want to excel in delivering its outstanding service rather than their experienced counterparts.When business strategy formulate, it is important to find the right people to execute it.
So staff is very important in that it is employees’ willingness and ability to implement the organizational business strategy (Bechet 2002, p. 168). Whether a company hiring long-term careers or short-term workers, or hiring people with related experience or people without experience, these are relate to staffing strategy. Staffing strategy according to Phillips and (Gully 2011, pp. 33), can reflect its business strategy, human resource strategy and talent philosophy.In the field of strategic human resource, Arthur found that Poretr’s generic strategies have association with human resource activities. In well managed companies, human resource activities have both long and short-term focus(Becker & Gerhart 1996, p. 783). On the short-term side, immediate staffing including recruiting and development are defined annually, often as integral part of the budgeting process.
On the long-term part, directional plans of action, such as training and development programs, are supporting business strategies. What’s more, organizations should meet their staff’s needs.Thus, how to retain employees is the organizations’ top agenda (Becker & Gerhart 1996, p. 788). McDonald’s has refocused its efforts and realized the importance of providing customers with quality food in a clean and organized environment with quick service at an affordable price. In order to sustain its competitive advantage, from short-term perspective, McDonal’s need employees to deliver its service. Such work does not need highly skills and knowledge. From budget perspective, it is less costly to employ teenagers instead of experienced employees.However, from long-term perspective, McDonal’s try to retain its employees by providing them ongoing training and then promote from within to fill its managerial positions.
Besides, for McDonal’s, the best way to hire quality people is to advertise inside the restaurant and aim at attract local people or through employee referral. Ullman (as cited in Shinnar, Young& Meana 2004, P. 273) stated that applicants referred by current employees should prescreened these applicants and then decide to recommend. As “screeners,” current employees can know both the job and the individual.They know who has the ability to do this job. Moreover, current employees connect referral with their reputation. Therefore, they will only refer quality applicants. In the service industry, especially service of food, few managers would deny that employee turnover is not a problem. A major reason why employee turnover in food servers is such high is that the service work itself has the negative image: people have a bad impression when speak to jobs of such type, thinking it is a physical job with long hours, low pay, lack of benefits and hard work (DiPietro & Merwyn 2006, p. 73). The foodservice industry now is the number one private sector employer in the world and still presents a continuing growth. Due to this growth, how to recruit and retain hourly employees remain primary challenges to restaurant managers (National Restaurant Association as cited in DiPietro & Merwyn 2006, p. 178 ). The demographics of the world have changed so much that aging problems become businesses main challenge. There is a shortage of younger workers because of decades of low birth rates, who are traditionally main workforce in service restaurant industry.With the increasing shortage of available younger workers, it is recommended that companies such as McDonl’s turn to use older workers. Past attitudes towards older workers by employers are hard to train, lack creativity, have physically problems and be inflexible (Sargeant 2001, p. 146). However, they are not the whole truth. In fact, because of rapid development of medical knowledge and technology, along with healthy diets and lifestyles, there are increased physically older people (Barth & McNaught 1991, p. 423). Studies(DiPietro & Milman 2004, p. 5 ) showed that most older workers are more dependable, have less accidents, fewer absences, lower turnover than the younger counterparts. In addition, older workers have the ability to help to mentor the younger workers in problem solving. Furthermore, it is turned out to be that older workers can build a better rapport with customers by using their interpersonal skills. In conclusion, the recipe of success of McDonal’s is to well implement business strategy it choose, However, how to manage and retain its employees is very important, because it is employees who have the motivation and ability to execute the business strategy.By knowing this, McDonal’s works hard to hire the right people and retain then by providing them ongoing training and promote from within for its managerial positions. Reference list Arthur, JB 1992, ‘ The link between business strategy and industrial relations systems in American steel minimills. Industrial and Labor Relations Review, vol45, pp. 488-506. Barth, MC & McNaught, W 1991, ‘The impact of future demographic shifts on the employment of older workers’. Human Resource Management, vol. 30, no. 1, pp. 420-434. Bechet, TP 2002, ‘Staffing strategy: A practical toolkit for workforce planning.Amacom, USA. Becker, B & Gerhart, B 1996, ‘The impact of human resource management on organizational performance: progress and prospects’ . Academy of Management Journal, vol. 39, pp. 779-801. DiPietro, RB & Merwyn LS 2006, ‘Management Perceptions of older employees in the U. S. quick service restaurant industry’, Human Resources in the Foodservice Industry, vol. 9, no. 2, pp. 169-185. DiPietro, RB & Milman, A 2004 ‘Hourly employee retention factors in the quick service restaurant industry’, International Journal of Hospitaity & Tourism Administration, vol. 5, no. 4, pp. 31-51.Glasgow, KM 2001, A strategic model of temporary staffing, Routledge, New York. Olian, JD & Rynes, SL 1984, ‘Organizational staffing: integrating practice with strategy’, Industrial relations, vol. 23, no. 2, pp. 170-183. Phillips, J and Gully, S 2011, Strategic Staffing, Pearson Education limited, London. Sargeant, M 2001 ‘Lifelong learning and age discrimination in employment’, Educa- tion and the Law, vol13, no. 2, pp. 141-155. Shinnar, RS, Young, CA & Meana, M 2004, ‘The motivations for and outcomes of employee rederrals’, Journal of Business and Psychology, vol. 19, no. 2, pp. 271-283.