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Mcdonalds in China

By jackb86 Dec 18, 2010 4553 Words
Introduction: McDonald’s in China
McDonald’s is considered as the most successful and largest restaurant chain in the world. In 1990 McDonald’s opened its first store in Shenzhen China. In 1992, McDonald’s Beijing outlet was opened. There are more than 800 McDonald’s outlets in China today. This paper aims to analyze the importance and the extent to which culture affects the operations of McDonald’s in China. The impacts of the Chinese culture on the operations, policies and decisions of McDonald’s are studied as well as the changes brought about by McDonalds, a symbol of American culture, to the Chinese society. Two areas will be analyzed –employee relations (human resources management processes and policies) and restaurant operations.

Part I: The Chinese Culture

Kluckohn and Strodtbeck’s Cultural Orientations
According to Kluckhohn and Strodtbeck (1961) there are five basic value orientations underlying cultures. These orientations are human nature (good versus mixed versus evil crossed with the mutability of the goodness), man nature (subjugation to nature, harmony with nature, mastery over nature), time (past, present, future), activity (being, being-in-becoming, doing), and relational (lineality, collaterality, individualism). "Human nature" refers to the innate goodness of people. A counterexample of this comes from the idea that people are evil, as evidenced in traditional Puritan thought. Emphasis was placed on controlling and regulating behavior to prevent evil from spreading. The man-nature aspect involves the relation of the individual to nature. For instance, many Asian cultures stress the view that man must be seen as a harmonious part of nature, whereas the orientation of most Anglo Westerners is that of man over nature -- that is, dominance of nature through technological means. The time orientation refers to the time frame salient to a group. For example, Chinese culture places a great deal of emphasis on ancestral obligations and rites (related to the Confucian principles of relationships and the five moral principles. Such a past orientation is contrasted with the future orientation of Westerners, who are often discontent with their current setting and seek change for the better. An activity orientation concerns self-expression in activity. In a being society, emphasis is placed on immediate gratification and spontaneous action, much like Morris's Dionysian dimension. A being-in-becoming society focuses on action and accomplishment -- measurable achievements. Finally, the relational orientation involves an individual's relation to his or her collective (Earley 1997).

Culture and Its Importance
Culture as a meaning system is materialized in patterns of human behavior and social interaction as well as in artifacts and observable rituals. Culture means more than physical materials or observed patterning of human interactions. It is also found in the evolution of distinct systems of ideas, beliefs, values, and their manifestations through symbols, forms of presentation, and patterns of social relationships. Culture is not static but dynamic, a constantly flowing current (Chaffee et al 1994). Each culture has its distinct value systems and orientations (Kluckhohn & Strodtbeck 1961). Values are often revealed in the behavioral patterns, community relationships, rituals, and cultural artifacts that make it possible for us to recognize and experience each culture. A conceptual definition must differentiate values from other closely related concepts such as beliefs, attitudes, and norms. Values are a type of belief, but are not identical with beliefs, which are cognitive elements that have existential referents. In Kluckhohn and Strodtbeck's terms, a value system is a set of principles that are "patterned" in a distinct configuration. This patterning of value elements distinguishes one value system from another. For example, both Chinese and Americans value family stability. But in traditional Chinese culture, family stability was built upon the supreme importance of one's obligations to ancestors, clan, and parents. The Chinese value of family stability is closely associated with many other values, such as prohibiting free male-female courtship and reliance on parental arrangement for marriages. This means that forces beyond the marriage itself, primarily those from clan and family elders, are involved in enforcing family stability (Chaffee et al 1994).

Study of Chinese Relationships
One area in which values differ across cultures is that of social relationships. Social relationships are those that are stabilized institutionally through culturally understood roles and responsibilities. For example, male and female relationships involve culturally accepted behavioral expectations in work situations, in families, and in social interactions. In each of these settings, there are socially accepted definitions of roles, through expected behavioral patterns and responsibilities associated with being a male or female. The same can be said about relationships involving authority hierarchies, seniority, or kinship (Chaffee et al 1994). Traditional Chinese culture is widely considered to be built upon value system crystallized in Confucianism. This traditional value system is revealed through elaborate definitions, regulations, and moral and ethical principles regarding individuals’ roles and relationships. These principles are not just ideas; they are materialized in social practices, including rituals, rites, ceremonies, and cultural artifacts. At the heart of the Confucian system lies linear hierarchy governing family structure, political structure, and the supernatural world.

Study of the Chinese Language
The Chinese language is one of the oldest living languages, and it is spoken by more people in the world than any other. Its script is used not only in China but in Japan and Korea as well. Nobody knows exactly how old the language is in its spoken form, but its system of writing was in existence nearly four thousand years ago. It probably originated by drawing pictures of word meanings into loess or sand. Like other ancient tongues, Chinese is a pictographic not an alphabetical language. The stylized, simplified pictures called "characters" or "ideographs" appeal with some exceptions more to the eye than to the ear. Each Chinese character symbolizes a meaning, an idea; it is not comparable with Western-type words which consist of a limited number of letters. English has twenty-six letters in its alphabet; Chinese is composed of thousands of characters that must be individually memorized by anyone who learns to read and write. The great dictionary compiled during the Manchu dynasty gives some 40,000 characters; however, knowledge of 3,000 to 4,000 characters constitutes a rather adequate reading vocabulary. The modern character often shows little similarity to its original pictorial counterpart because usage as well as changes in writing instruments and materials caused changes in form (Callis 1959). Chinese characters reveal thought processes of the Chinese mind; they have universal appeal to everyone endowed with intelligence and artistic feeling. Written with a pen, characters may look ordinary; but the same characters written with the Chinese brush can reflect the personality of the writer to an extraordinary degree. They will show the flow and rhythm of "life movement" in which the old Chinese calligraphers took great pride. Classical written Chinese differs so much from the written language of today that intensive training is needed to master both (Defrancis 1986).

Study of Chinese Nature
China's oldest religion, influential among the people until the doorstep of our times, was a nature religion. Spirits of river and mountain, of soil and grain, of wind and water, of field and kitchen, and especially the ancestral spirits of the dead were worshipped. It was believed that they played an active part in human affairs. Lord on High (Shang Ti) was the heavenly ruler of natural forces while the Son of Heaven, emperor of all China, was the mediator between these forces and all men. At the winter solstice when the sun, the "great yang," symbol of warmth, health, and righteousness, would give more light again, the emperor would make sacrifices on the Altar of Heaven. In the home of every Chinese family ceremonial honors were brought to the spirits of the ancestors who were regarded as very much alive in the spirit world and revengefully powerful on earth unless properly remembered and revered. Geomancers, knowing about feng-shui, "wind and water," saw to it that buildings fitted into their natural surroundings without disturbing the spirits. Work followed the rhythm of the sun, of the seasons, and of crops. Life followed the natural cycle of birth, marriage, and death. The calendar followed the phases of the moon. Festivals were celebrated to remember the ancestors, to venerate the spirits of great men, or simply to mark the seasons and to admire nature. Typical were the Lantern Festival, the Moon Festival, or Ascending High. Chinese were masters in observing nature and using natural products. Silk, medicinal herbs, and vegetable colors are outstanding examples. Tools, toys, and art objects were made of natural materials that the soil or plants provided (Callis 1959).

Study of Chinese Human Nature
There are traits, combinations of traits, and behavioristic peculiarities characteristic of native Chinese. These may be explained as results of race, geography, society, and a common culture to which all nurtured and raised in China are exposed. Chinese are, in general, hard working, practical, and thrifty. They are used to working much and to thriving on and enjoying little. A trace of optimism, even of humor, seems always present in the Chinese personality. Even under the most trying circumstances a spark of hope for better times is present. Chinese peasants and workmen are rarely demoralized. They keep their "chins up," take what comes, help each other out, and are amazingly content in their unending struggle for the bare necessities of life. "You can rob an army of its general, but you cannot rob a common man of his will," they will say. If fate turns and things are going very well for them, they readily become easygoing, even complacent, and opulent. They may yield to temptations: gambling, women, and opium. Aroused and angered, a Chinese who has convinced himself of the evil intentions and enmity of his foe can be cruel, determined, and revengeful in the extreme. He may wait long for his opportunity, but he will not forget. On the other hand, the Chinese can be a reliable and sacrificing friend when he is bound by cordial sentiments. As a highly emotional person who "thinks with his heart," he is likely to go unjustifiably far in both his animosity and his friendship. Yet to a real or imagined change of heart in his opponent, he himself will respond quickly and warmly. Though accustomed to hide his own emotions under smiles or an impersonal mask, the Chinese is an expert in the psychological observation of others. Nothing escapes him, which is advantageous to know. He can be an unobtrusive, talented spy. Deeds alone, not words, will impress him though he himself is good at playing with words to cover up his true intentions or to mislead his enemy (Callis 1959).

The Chinese culture is very different from the Western culture. The discussion above presents a clear picture of the Chinese culture that will aid us in the study of how the Chinese view McDonald’s and how the company used these views, which are culturally driven, to its success.

Part II: Importance of Culture to the Operations of McDonald’s in China
McDonald’s Culture
McDonald’s is the epitome of an American Company. For most Chinese it symbolizes the American Culture. There is a great difference between the American culture and the Chinese culture. McDonald’s as an American company have American values. McDonald’s in China, like elsewhere in the world virtually follows the corporation’s basic American operating system. The majority of employees are called the ‘crew’. In China, and in every country where there is McDonald’s, crew jobs are fragmented into different stations such as working on the till, cleaning tables and emptying bins, garnishing burgers and monitoring fries, bread machines or the grill. Virtually all aspects of the business are highly standardized and rigorously monitored. Assembly line techniques are used to produce and serve identical products; standardization and higher productivity are ensured through new technology and the systematic planning of each job, broken down into the smallest of steps. he corporation's industrial engineers measure and plan the equipment layout and scheduling in terms of seconds of working time using computerized time study methods. The worker's skills are eliminated and the work is labor intensive with the machinery making the cooking decisions. Lights and buzzers tell workers when to turn burgers or take fries out of the fat. Computerized cash registers do most of the thinking for till and window workers, separating the hand and the brain in classic scientific management style.

According to Royle (2000), the basic principles of the McDonald’s business model are: oHigh degree of standardization in all process
oVarious standardizes layouts and concepts for the restaurants oAlmost identical products all around the world with only few adaptations oVery strong quality management
oHigh levels of control in collaborations

McDonald's Corporation believes that standardization is the most rational means of maximizing cost efficiencies. In addition, standardization has cultural functions, where the company maintains a global corporate image for marketing and advertising purposes (Ritzer, 1996 cited in Pereira 2002). McDonald's rationalization could be seen in its optimization of work processes, particularly through the use of technology. This is more than simply referring to the use of equipment and machinery, for McDonald's technology includes all processes from the preparation, cooking and serving of the food right up to the systems of financial accounting, ordering of stocks, staff planning and training. All these processes have been fine-tuned towards achieving cost and labour efficiency, and minimizing wastages (Leidner 1993 cited in Pereira 2002).

Cultural Views of the Chinese about McDonald’s
In the eyes of many Chinese, McDonald’s represent the American culture and the promise of modernization. McDonald’s highly efficient service and management, its spotless dining environment, and fresh ingredients have been featured repeatedly by the Chinese media as exemplars of modernity (Yan 1997). According to Li (1999) people in China are drawn to McDonald’s because of its novelty, status and symbol. Yan (2000) argues that McDonald’s attraction fro Chinese customers does not come from its food but from the sociality of the space it provides to consumers. The space is sociable, because it gives customers a sense of public accessibility, a sense of equality between customers and restaurant employees, and, among women customers, even a sense of gender equality. For these reasons, while McDonald’s in the United States is a place for grabbing some fast food, in Beijing it is a place for friends and colleagues to hang out and communicate (cited in Yang 2002). Most international fast food chains in China, particularly McDonald’s are targeting children. The policy of one child per family has had the effect of turning single children into fussy little emperors, the center of attention of parents and relatives. High-quality food and beverage products provided by companies such as McDonald’s are targeted at children, where they find a ready market. While McDonald’s remains essentially American in terms of menu, services, and management, the company has made serious efforts to adapt to the Chinese cultural setting. To present itself as a local company, all the restaurant sin Beijing actively participate in community projects with local schools and neighborhoods (Luo 2001).

McDonald’s, American Culture and Chinese Culture
As McDonald’s becomes a global phenomenon, it teaches non-Western and non-US audiences new forms of producing and consuming food, while initiating some cultures into modernization and modernity itself. Studies of the introduction of McDonald’s into Asia, for instance, stress how McDonald’s teaches consumers to queue up and wait in line and enter rationalized processes of food consumption. It provides an experience of cultural otherness that enables non-Westerners to participate in the culture of Western modernity. It teaches non-Western workers speed and efficiency, as well as food hygiene and customer service (Watson 1997 cited in Kellner 2003)). It is thus part and parcel of the process of globalization that is producing new forms of culture, social practices, and ways of life. For global citizens, McDonald's represents the charisma of the golden arches, Ronald McDonald and McDonaldland, the tie-ins and promotions, and the ubiquitous advertising, aimed at a variety of genders, races, classes, and national subject-positions, which attempt to incorporate more and more cultures and sets of consumers into its McWorld. In China, McDonald’s signifies Western modernity and presents itself as an alternative to their traditional culture in terms of cuisine and social experience. However, the Chinese culture also affects McDonald’s. One example is how McDonald’s adapts to the culture and cuisine of the Chinese. McDonald’s in China redesigned its menu, serving noodle dishes along with Big Macs and allows regional owners to vary the menu according to local tastes. In its global attempts to articulate McDonald's with local forms of various cultures, the corporation calls Ronald McDonald "Uncle" in China and also has an "Aunt" figure, drawing on Chinese respect for elders and relatives (Kellner 2003).

The cultural background of the Chinese people shapes their views and attitude toward McDonald’s. As a country that has been secluded from the rest of the world, the entrance of McDonald’s in China has fueled curiosity and the Chinese people’s desire for modernity and to be included in the global village. The discussion above stresses the importance of culture to the operation of McDonald’s in China because culture shapes attitudes and affects behavior and attitude. In order to be successful in China, McDonald’s need to study the Chinese culture and to be able to adapt to the norms and expectations of the Chinese society.

Part III: The Impact of Culture on Employee Relations of McDonald’s in China
Hofstede’s Cultural Dimensions: China and The United States One of the most popular works in the study of culture is that of Geert Hosfstede (1984). Through his research and surveys he theorized that cultural and sociological differences between nations can be categorized and quantified, thereby allowing comparison of national cultures to take place. Hofstede identified five cultural dimensions. These are: 1. Power Distance

The dimension of power distance is about the extent to which power structures are hierarchical and reflect significant inequalities in power. Countries with large power distances exhibit wide inequalities in power, power that is often concentrated in relatively few hands in heavily centralized and hierarchical organizations. Individuals within such cultures view themselves as inherently unequal: subordinates are dependent on those higher up the hierarchy and accept the power of their superiors by virtue of their position in the hierarchy. All participants in the hierarchy expect their position within it to be clearly demarcated. China is considered as a large power distance country. In small power distance countries, individuals are more inclined to regard themselves as equals: rather than expecting to be told what to do, subordinates expect to be consulted and will argue a case with those higher up the organization. Respect for individuals within the organization comes from their proven capacity to perform a role rather than from the possession of a particular job title or their place in an organization. Shorter small power distances coincide with flatter organization structures. The United States is considered a country with small power distance. 2. Uncertainty Avoidance

Uncertainty avoidance measures the lack of tolerance for uncertainty and ambiguity. This manifests itself in high levels of anxiety and emotion. This in turn translates into a preference for highly structured formal rules and limited tolerance for groups and individuals demonstrating deviant ideas or behaviors. 3. Individualism vs. Collectivism

The individualist-collectivist dimension measures the degree to which the interests of individuals or of the group take priority. The social framework in an individualistic society is looser than that of a more collectivist society and individuals take responsibility for themselves and their immediate as opposed to extended families. Individualist societies demonstrate a greater regard for individual rights and freedoms and tend to be characterized by assertiveness and competitiveness rather than by teamwork and cooperation. China is considered a country that is collectivist. In China, it is the group (which could be the extended family, the employer or the society as a whole) that looks after the interest of individuals and gives them their sense of identity. In return fro this protection, individuals offer the group loyalty and work towards the attainment of goals determined by and for the good of the group, organization or society. The United States on the other hand is a highly individualistic society. 4. Masculinity – Femininity

Societies that place a high premium on assertiveness, achievement and the acquisition of material possessions are exhibiting aggressive or masculine goal behaviour. Masculine environments also favour conflict and competition in the workplace. Cultures that place a high value on social relationships, quality of life and sensitivity demonstrate passive or feminine goal behaviour. Cultures and workplaces scoring high on the femininity dimension exhibit high degrees of cooperation, negotiation and compromise. The United States can be considered as a masculine culture while China is leaning toward femininity. 5. Short- vs. Long-Term Orientation

This cultural dimension was not included in Hofstede's original analysis but added at a later stage. In countries with a short-term orientation, which is more characteristic of Western societies (particularly the United States) and of some Asian countries such as Pakistan and the Philippines, the emphasis is on the immediate gratification of needs, a focus on the present and the attainment of short-term goals. In cultures with a more long-term orientation, which include the cultures of Japan, China, South Korea and Taiwan, the satisfaction of needs is deferred for the sake of long-term benefits and growth. Associated characteristics include persistence and thrift.

International Human Resource Management
International Human Resource Management is the process of procuring, allocating and affectively utilizing human resources in a multinational corporation (Sims 2002). IHRM according to Briscoe and Schuler (2004) is about understanding, researching, applying and revising all human resource activities in their internal and external contexts as they impact the process of managing human resources in enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers, environment and society.

In the case of McDonald’s culture has little effect on the company’s operations. Although the company has invested so much on making it’s restaurants appear as local as possible, the company system remains intact.

McDonald’s conduct crew-level training at 25 workstations in addition to using step by step manuals and videotapes. Due to its international scope, translators and electronic equipment are provided, which enables professors to teach and communicate in 14 languages at one time. In addition to training, its Hamburger Universities provide a variety of advanced business management course, which allows aspiring managers to earn college credit. McDonald's Corporation's organizational structure and its use of technologies appear to influence its employment policy. McDonald's is structured into three main groups: the headquarters team, the restaurant managers and the crewmembers. The headquarters team refers to a small group of senior executives and managers in charge of public (community) relations, finance, personnel, human resources, training, property management and several other tasks. As the restaurant manager's task involves day-to-day management of the restaurant, McDonald's usually hires secondary school leavers to fill the post as the majority of the job's training is conducted within the restaurant itself. Restaurant managers began their careers in McDonald's as trainee managers, before rising to become second assistant manager, first assistant manager, and finally restaurant manager. The higher the managerial position, the greater the number and the complexity of tasks, including staffing, training and recruitment of crew members (and junior managers), budgeting, accounting, and maintaining discipline. Numerically, crewmembers are the largest group in the organization, but are remunerated with the lowest wages. The crew's main tasks are preparing and serving the food, and cleaning the restaurant. As these tasks are relatively simplified due to the heavy rationalization of the technology, the McDonald's Corporation does not need to hire a person with a lot of education or skills. The crew face the least favorable employment conditions in comparison to the other two groups. For its employment policies, McDonald's Corporation has its own 'espoused philosophy', which believes that issues of efficiency and equity can be dealt with without the need for unions (Love 1995; Royle 2000). The company has its own Human Resource Management programme, one which is similar to many other corporate HRM programmes, where the main objectives are to foster employee loyalty and to keep its employees 'satisfied' through 'individualizing' employee relations (Beaumont 1995).

McDonald’s is the largest food service operation in the world in terms of system wide sales. McDonald’s is a franchised based multinational company that establishes franchises and company-owned operations to export its products. McDonald’s has developed highly standardized and uniformed products with minor alterations depending on the local market. McDonald’s also developed a highly standardized operating system and procedure. The HRM procedures in the host country are virtually the same as the host countries. However, there are different issues that affect the IHRM practices in McDonald’s, particularly in Europe. These issues include wages/compensation, labor relations, and employee participation.

References

Beaumont, P.B.,1995, The Future of Employment Relations, Sage, London.
Briscoe, D. and Schuler, R.,2004, International Human Resource Management: Policies & Practices for the Global Enterprise,2nd edn, Routledege, New York.
Callis, H 1959, China: Confucian and Communist, Henry Holt, New York.
Chaffee, S, Chu, G, Ju, Y, and Pan, Z 1994, Comparing Traditional Chinese and American Cultural Values, Westview Press, Boulder, CO.
Davidson, W 1987, ‘'Creating and managing joint ventures in China’, California Management Review, vol. 29, no. 3, pp. 77-94.
Defrancis, J 1986, The Chinese Language: Fact and Fantasy, University of Hawaii Press, Honolulu.
Earley, C 1997, Face, Harmony, and Social Structure: An Analysis of Organizational Behavior across Cultures, Oxford University Press, New York.

Kluckhohn, F & Strodtbeck, F 1961, Variations in Value Orientations, Row, Peterson and Company, Evanston, IL.
Kellner, D., 2003, Media Spectacle, Routledge, New York.

Love, J.F.,1995, McDonald's Behind the Arches, Bantam Press, London.
Luo, Y., 2001, How to Enter China: Choices and Lessons, University of Michigan Press.
Pereira, A A 2002, ‘’McAunties’ and ‘McUncles’ Labor Relations in Singapore’s Fast-Food Industry’, in T Royle and B Towers (ed.), Labour Relations in the Global Fast Food Industry (pp. 136-153), Routledge, New York.

Sims, R., 2002, Organizational Success through Effective Human Resources Management, Quorum Books, Westport CT.
Vidal, J.,1997, McLibel: Burger Culture on Trial, Macmillian, London.
Watson, J. L. (ed) 1997, Golden Arches East: McDonald's in East Asia, Palo Alto, Stanford University Press, CA.
Yan, Y 1997, ‘McDonalds in Beijing: The Localization of Americana’, in J Watson (ed.), Golden Arches East: McDonald’s in East Asia (pp. 39-76), Stanford University Press, Stanford.
Yan, Y 2002, ‘Of Hamburger and Social Space: Consuming McDonald's in Beijing’, in D S Davis (ed.), The Consumer Revolution in Urban China (pp. 201-225), University of California Press, Berkeley.

Yang, G., 2002, ‘Civil Society in China: A Dynamic Field of Study’, China Review International, vol.9., no. 1., p. 1.

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