CHALLENGES OF IHRM

An Analysis of how McDonald’s
Corporation Cope with Emerging
Human Resource Issues

Tolulope Opokiti (12048704)
Rasaq Olasunkanmi (12002534)
Ademola Adebiyi (12057819)
Isaac Orimogunje (12002127)

 Introduction of McDonalds Corporation
 Practise of MNC according to Perlmutter

 McDonald’s practise as indicated by Perlmutter’s (1969)
 MNC strategy as revealed by Bartlett and Ghoshal

(1989)
 McDonald Strategy; Is Transnational? If not, what does it practise (staffing, appraisal etc.)
 Merits and demerits of trans-nationality.
 References.

McDonald’s Corporation: An Introduction
 Founded in 1955 by Dick and Mac McDonald
 Headquarter based in Illinois, America
 More than 34,000 local restaurants worldwide
 Located in 119 countries worldwide

 Employs 1.8 million employees
 80% of the restaurants are franchised
 Hamburger University: Employee training
 McDonald’s System : Operations
 “Think Global, Act Local” Strategy

McDonalds(2013); Vignali (2001)

Perlmutter (1969)
 The article “The Tortuous Evolution of the Multinational Corporation”

explains how companies justifies their claims of being a MNC using three structures.
 The article presented the EPG model which further explains the three structures which MNCs uses for their organisational design. These are:
Ethnocentric, Polycentric and Geocentric Structures.
 An important aspect of the EPG model by Perlmutter is the fact that
MNCs should aim for a transition from Ethnocentrism to Polycentrism to Geocentrism; thereby, the Internalisation of MNCs.
 The transition to Geocentrism is said to create a global workforce which represents an option for the future.

Perlmutter (1969); Cornuel and Kletz (2001)

MNC Practises
 Operates in more than one country, i.e., a MNC.
Key HR issues

Ethnocentrism

Polycentrism

Geocentrism

Authority and
Decision making

High in
Headquarters

Low in
Headquarters

Countrydependent

Training

References: Perlmutter, H. (1969) ‘The tortuous evolution of the multinational corporation’ Columbia Journal of World Business, 29(1) pp Royle, T. (1999) ‘The reluctant bargainers? McDonald’s, unions and pay determination in Germany and the UK’, Industrial Relations Journal, 30(2), pp Royle, T. (2008) ‘Just vote no! Union–busting in the European fast–food industry: the case of McDonald’s’, Industrial Relations Journal, 33(3), pp Royle, T. (2010) ‘Low-road Americanization’ and the global ‘McJob’: a longitudinal analysis of work, pay and unionization in the international fast-food industry’, Labor History, 51(2), pp. Smerd, J. (2006) ‘McDonald’s Japan No Longer Serving Up Forced Retirement’, Workforce Management, 85(16), pp Vignali, C. (2001) ‘McDonald’s: “think global, act local” – the marketing mix’, British Food Journal, 103 (2) pp Watson, J. (2006) Golden arches east: McDonald 's in East Asia. Google book[Online]. Available at: ots=2jfkV9BJ11&sig=IFSKrXRlZUZdwfnuTsE3pjCaJWw#v=onepage&q&f=false (Accessed: 1st April 2013) Yeung, H. (1998) ‘Capital, state and space: contesting the borderless world’, Transactions of the Institute of British Geographers, 23(3), pp