INTERNATIONAL CONSUMER BEHAVIOR:
MCDONALDS AND HONG KONG
McDonalds and Hong Kong
McDonalds celebrated its 50th anniversary in April 15, 2005 and remained true to the statement “As far as I can tell, the only place you can’t get a Big Mac is in outer space.” (1990) The company operates as a global business through franchising. In 2004, the company reported to have established 30,000 local restaurants located in 115 countries across five continents. It is the biggest fast food retailer conquering markets worldwide. In almost every country in the world, there is a McDonalds restaurant and in a single state or region, there are several branches. The company has spread so widely that the term “mcdonaldization” (1998) was coined to describe the organization and culture of the company. The term has evolved to refer to the general business strategy of expansion.
McDonalds opened its first restaurant in Hong Kong in 1975 at Paterson Street, Causeway Bay. Since then the number of McDonalds stores increased to more than 200 outlets with more than 10,000 employees. Apart from McDonalds, the company also opened McCafe offering a variety of cakes, pastries and muffins together with specialty coffee and tea to meet the different needs of consumers. To make its mark in Hong Kong, McDonalds was the first restaurant to implement a smoke-free policy as a move of the company to take responsibility for the health of its customers, mainly children, who deserve a smoke-free environment where they can eat and play. The company is concerned about employee delivery of customer service that McDonalds established Hamburger University in 1961 providing its staff with the opportunity for career development as they grow with the company and move up through the different levels of the organization. In 2002, the seventh Hamburger University was opened in Hong Kong. It is also through the university that a Ronald McDonald is trained to become an ambassador for the company. Ronald McDonald presents magic and educational shows in over 1,000 schools and hospitals throughout Hong Kong every year.
As part of the integration of McDonalds into the local market as a company concerned with the plight of children, McDonalds opened the first Ronald McDonald house in Asia in 1996. The house welcomes families with critically ill children to stay at the house while the children are undergoing treatment in a nearby children’s hospital. The house provides the needs of the families and Ronald McDonald visits the children in the hospital to bring them joy during the time that they are undergoing the difficult process of treatment. McDonalds in Hong Kong celebrated the World Children’s Day together with deaf-mute children. Over 2,000 volunteers, both children and adults, joined in the singing of the Cantonese version of Aren’t They All Our Children in sign language making the activity part of the Guinness records for the most number of people singing in sign language at one time.
The company objective in relation to a foreign market is to be involved in the social services and charity work in the community. Giving back to the community is the core service policy of the company in recognition of the significance of the patronage of customers to the company in its expansion and continuity in Hong Kong. Apart from involvement in community service and charity, McDonalds adapted the local culture by celebrating Lunar New Year through a festive prosperity program with animal toy giveaways of the different animals in the Chinese Zodiac sign.
The company is influenced by the culture in Hong Kong observed through its adoption of local customs and practices. However, the company also influences the local culture through its introduction of food products first marketed in the United States. The different aspects of influence to the company of the local culture are manifested in the company-employee relations, food product development, customer service, and company participation in community affairs. The influence of the company to the people of Hong Kong is observed through the number of customers served by the different branches as well as the vast expansion of branches totaling roughly 200 stores across Hong Kong from 1975.
Management Approaches of McDonalds in Hong Kong
Organizational culture is the manner that the totality of the company operates according to a set of established values (1983). McDonalds operates according to four values: quality, service, convenience and value (1995). Organizational culture is part of the knowledge and information transmitted by McDonalds to the franchisees in Hong Kong such that there is a uniform quality of food and service wherever the branch is located. The good reputation of the company and the expectation of an excellent service no matter which branch people eat constitute the McDonalds company culture. Despite this basic standard, the company expects the different stores to adapt to the needs of the local market by managing their stores in a manner that makes the employer-employee relations, customer service and the food products served acceptable and satisfying to the local community.
McDonalds applies a combination of scientific management and human relations approach in the context of its standard values and the work ethic and customer satisfaction determined by the local community. Scientific management is the process of achieving efficiency by actualizing the principles that employees are motivated by economic rewards, a clear delineation of interrelated tasks, and a clear structure of recognized authority that facilitates all aspects of the operation. ( 1964) Scientific management requires the managers of the business to analyze the operations of the business and create objective methods of dealing with the problems. This became popular because of the prevalence of disputes among workers and between workers and management with the proliferation of new industries. (1991)
The human relations perspective recognized the importance of the non-rational element in the organization behavior such as the development of relationships between workers and the role of an effective leader in facilitating the constructive communication and participation of all members of the organization. (1964) Human relations management considers the techniques of forming problem-solving teams, improved communication by the company with its employees, the offer of employment security, skills and training support for employees and incentives for efficient work. ( 1997)
McDonalds applies scientific management by recognizing the value to employees of monetary rewards in recognition of their valuable contribution to the company. Although the salary of employees varies in different countries, the company ensures that its franchises comply with the acceptable wage rates and working hours in different countries. The company also ensures organized collective work by having a clear delineation of interrelated tasks and rotating employees so that they experience a holistic view of service delivery. The managers of local branches are from Hong Kong so that they apply the local practices in hiring employees, determining wage and work hours, and giving the monetary incentives recognized by employees making these effective in motivating employees to contribute to the success of the company. The company appoints managers belonging to the locality to make sure that the manager has a good grasp of the work culture in the locality and the company does not offend anybody due to policies not acceptable in the local community. In introducing the standard values of the company, these are presented to employees in a language they understand and in the context of the local culture.
McDonalds also apply human relations management by considering the importance of interpersonal relations in the day-to-day operations of the company. Interpersonal communication is the key to achieving cooperation among the employees performing related tasks. There should be a leader that facilitates communication and participation of all employees. The company trains managers to be adept at effective communication. The manager knows how to speak in Cantonese and English and proves to be acceptable to the employees as a leader that can unite the collective efforts of the entire crew. The crewmembers respond to the directions of the manager making it possible to achieve the cooperation of each employee. The result of cooperative employees is teamwork in problem solving. During peak hours, the members of the crew are designated in areas needing assistance. When the kitchen is lagging behind in meeting orders employees on the floor are asked to help until normal operations is achieved. McDonalds’ employees are versatile. The manager plays a vital role in the achievement of a good employer-employee relationship in the branch.
Managing a McDonalds branch in Hong Kong starts with the supervision of the construction and design of the food store. The local culture is integrated in the process through the choice of business site and design according to the rules of feng shui. Despite the standard colors and signboard design of McDonalds, the local culture dictates the site and the placement of the entrance and exit as well as the furniture. After the building has been successfully built, the company then hires and trains its crew instilling in them the standard values of the company and enhancing the local work values beneficial to the company. The Chinese culture has a strong family base resulting to the high value given to strong family loyalty and belongingness. McDonalds fosters employer-employee relations that reflect the loyalty and belongingness experienced in the family. The company enriches its relations with its employees by developing a good working relationship with them. McDonalds values the contribution of its employees to the company by compensating these efforts monetarily and by offering venues for career development. The company provides employment security by promoting managers from the rank of employees giving every employee the motivation to improve work efficiently. The appreciation of the contribution of each employee to the company creates employee belongingness and the possibility of moving up the career ladder given to all employees makes the employees continue to become a part of the company.
The company ensures that every branch, including those in Hong Kong have well-trained crew. Prior to starting work, newly hired employees are given a rundown of the rules and regulations, company practices and the goals of the company. After this, the employees are shown how the different components of the menu are prepared, how food is served, how the cash register is managed and how to establish rapport with the customers. The new employees are given practical exercises concluding an evaluation and delivery of pointers. The managers of McDonalds in Hong Kong make sure that local customs are followed in serving customers. The customary bow is applied in greeting customers and the proper respect is given in taking orders and serving food.
Performance Consequences of McDonalds Management in HK
It is apparent that the company has integrated some aspects of the local culture in its operation making the Hong Kong McDonalds restaurants distinct from other McDonalds restaurants in other countries. The approach employed by the company in Hong Kong works because in 2003 the McDonalds restaurants in Hong Kong cooked 32.5 million eggs, prepared more than 25 million pounds of French fries and grilled more than 4.4 million pounds of beef patties to the satisfaction of its customers. The company has captured its share in the market as reflected by the increase in the number of branches. The establishment of the many McDonalds branches and a number of McCafe reflects the confidence of the company of customers to both the McDonalds restaurants and the McCafe. The success of the company can be attributed to its recognition of the importance of knowing the local culture before one can obtain a market share.
McDonalds started in Hong Kong as a company catering to the taste of the Americans and British residing in the area. However, when the company opened its doors to the public it became a restaurant for Caucasians and Asians alike who appreciate the taste of burgers and fries. The company was transformed from a restaurant espousing the American culture to a food store for ordinary people. The urbanization of Hong Kong and population density resulted to the vertical expansion of homes. The limited housing space made it hard for ordinary people to host family gatherings. The culture of eating outside was developed, resulting to the proliferation of restaurants in Hong Kong. (Durnford 2002) There were many restaurants in Hong Kong prior to the introduction of McDonalds but it was the company that introduced the concept of self-service, drive-through, fast food and labor deployment practices that became the pattern for the transformation of many Chinese restaurants into fast food businesses.
The promise of fast service of quality food made it popular to the people with busy lives in Hong Kong. McDonalds has been in Hong Kong for three decades now and has become a witness to the changes that occurred in the metropolis. McDonalds has embraced Hong Kong in the same way that the people of Hong Kong have accepted McDonalds as part of their culinary culture. A typical day at McDonalds involves individuals, couples, colleagues as well as three or four generations of the family sharing a burger and fries meal. McDonalds has become so popular that its logo and mascot is recognized by any child in Hong Kong who has been introduced to the McDonalds experience.
The growing market of McDonalds drove the company to innovate on its food products and services in recognition of the patronage from customers. To accommodate the tea drinking culture of the Chinese and British by opening McCafes around Hong Kong offering varieties of tea and coffee as well as different cakes, pastries, and bread. The café offers an atmosphere for socialization because of the calming and relaxing atmosphere.
McDonalds has been influenced by the Hong Kong culture in the same way that it has established itself as part of the culinary experience of the people of Hong Kong. The organizational culture of the McDonalds branches in Hong Kong reflects the values, beliefs and practices of the city reflected in the work behaviors of the company crew. Organizational culture adjusts to the culture of a foreign market (2002) if the company wants to conquer the market. The culture of the local market also becomes the context and then basis for determining, evaluating and formulating contingency plans to in case problems and emergencies arise.
The ability of McDonalds to establish itself in Hong Kong is expressed by the manner that McDonalds became one of the factors uniting the Chinese, British, Americans and other people in Hong Kong with different cultural backgrounds. The influence of McDonalds to the local community is also expressed by the concepts of queuing, fast food, self-service and drive through adopted by other restaurants and applied in other industries.
RE
Credit:ivythesis.typepad.com
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