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.” Its five “people principles” reflected by its human resource strategy are: respect and recognition; values and leadership behaviors; competitive pay and benefits; learning, development, and personal growth; and ensuing 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 ongoing training, 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 behaviors 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. McDonald’s also recruits at local job centers 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.”
1. How would you describe McDonald’s business strategy? What are the foundations of its competitive advantage (what are the sources of its success)?
2. How has McDonald’s aligned its business, human resource, and staffing strategies?
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?
1. McDonalds business strategy revolves around customer satisfaction. Whether it was operational excellence, or quality and quick service, their main goal is not to make easy profit, but to gain peoples trust worldwide in the product they offer , thus growing a solid base of customer loyalty that give them profit.
. McDonalds sole competitive advantage is customer satisfaction. They have achieved that through or as the question suggest the sources of their success are:
-Choosing the right people to do the job: this is a crucial step which is the staffing process because as we learned in 321 HRM course, recruiting talented staff creates competitive advantage and world recognition and a standout image among competitors. On the other hand, recruiting good workers is not enough. The employer should retain talent. McDonalds has done that through their “people promise” principle. Value the employees, provide the proper tools and equipment to help workers in executing quality and accuracy in services.
-Operational excellence : this is another pillar that has helped to rise the competitive advantage “ceiling” in McDonalds. we know how fast we get our orders in McDonalds, how delicious and hot the food is. If we count how many people go to McDonalds in one day you will wonder how they do it. The fast service, the food , the cleanliness of the place and the good attitude employees treat customers with. This is a strategy McDonalds has developed to stand in face of competition.
2. McDonalds is a firm which built its business , HR , and staffing strategy around people or we could say people-oriented strategy. McDonald’s business strategy is the specialization strategy. According to Phillips & Gully (2009), “Businesses pursuing a specialization strategy focus on a narrow market segment or niche- a single product, a particular end use, or buyers with special needs-and pursue either a differentiation or cost-leadership strategy within that market segment. Successful businesses following a specialist strategy know their market segment very well, and often enjoy a high degree of customer loyalty” ( pg. 29, part 5.). they are concerned with people whether they were staff members or customers.
In McDonalds they aim to be the best employers in the community. Hire people and ensure they work in good environment and they have the potential to be promoted, they would fill managerial positions from within. These practices make employees feel some sort of citizenship toward their organization, and how the employees exhibit their gratitude ? through good customer service, the main business strategy of McDonalds. that’s how I see the integration of the three strategies.