Do you think McDonalds training initiatives are aligned with business strategy? Explain the reasons for it. Why is it important to establish business strategy-training linkage?

A1) McDonalds is known for it’s “Globally Branded Quick Service Restaurant Segment” by holding a leading share by segmenting its informal eating-out market in almost each country. Existing from last 50 year

SUBMITTED TO: MR. Arindam Chatterjee

SUBMITTED BY: SWATI MISHRA

PGDBM-3RD SEMESTER030109093

2010

old company, it is known to be the most ‘Powerful’ and ‘Valuable Brands’ in the world. “McDonald” one of the leading Global foodservice retailer, with more than 30,000 local restaurants serving nearly 50 million people in more than 119 countries each day. It serves as the world’s largest restaurant chain with its outlets in each continent and covering almost every country. Annual Customer Satisfaction Survey: Since 1992 McDonalds has scored dead last among fast-food restaurants. In the fourth quarter of 2002 McDonalds disclosed its first ever quarterly loss, reason for the same was customers began to switch to be competitors Burger King, Wendy’s and subways.

Training Initiative: “When learners receive line manager support, 94% goon to apply what they learnt, demonstrating a positive correlation between the transfers of learning to the workplace, line manager support and performance improvement”. -Kevin Lovell, learning strategy director, Knowledge Pool.

Strength of McDonalds: Its idiosyncratic competence which provides up with a level of relative advantage in market place.

E.g. Its image, leadership strategy, healthy relation with both buyers and suppliers, financial resources etc. helps McDonalds to move forward in its Business Strategy. It receives 80% of revenue from countries like UK, US, Australia, Japan, France, Germany, Canada and Brazil.

The major reason for its strength was building of an “Image in minds of the people by initiating and pioneering in to fast food culture”

E.g. speed in delivering of products and services, cleanliness and care for customers giving preference to their “Value of Time” which is beneficial for both customers as in time value and organization by capturing more of the customers and increase in sales. Creating Corporate Symbol and Advertisement Campaigns were again the reason in launching the Brand Image and Logo in minds of millions of people.

Marketing Strategy: McDonalds’ marketing strategy is linked with its internal resources and external environment and its basic competencies with its share holders.

Business Strategy & Training Linkage:

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Business Strategy

Training Initiatives

“Think Global Act Local”

Training need assessmentOrganizational AnalysisPerson AnalysisTask AnalysisWelcome MeetingOn Going TrainingTransfer Of TrainingTraining EvaluationTargeting MethodologyOn The Job TrainingClassroom Based TrainingEmployee Development

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Training Initiative & Business Strategy McDonalds following

Organisational Leadership is a part of training process which helps in reinforcing a ‘continuous improvement’. It helps in identifying an ‘Innovation’ mindset at work culture.

McDonalds, with its new products line up, helped it to get closer to new trends and tastes preferences of the people.

Training & Leadership to become the cost leader

McDonald’s founder Ray Kroc’s training focused ideology: “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent”.

Structure & Process to help layout the whole business process

McDonalds Performance on Corporate Initiative, & Infrastructure helped

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Mcdonalds is using the skills of its human resource as the foundation for producing the number of new products to serve to local customers culinary interests and to design restaurants that are aestheticvally appealing at the local level.

Using skills of its human resource

Mcdonalds integrates its training program with its human capital to develop its employee's talents. Talented employees is a capability that contributes to product innovation and esign as core competencies for Mc donald's

Integrating the human program with human capital

This principle which validates individuals importance and the value Mc donald's places on their growth and development.this is related to the firm's array of training program those are aspects of the training program of Mc donald's operationthat help it and manage resources as a part of the firm's resource portfolio.

Firm's People's Principle

Employees skills should be continuously updated so that the firm's human capital can perform at peak levels hence improving the efficiency of the firm which is directly related to the global strategy of the company.

Updating the employee's skills

Highly Standardized wok process which results is overall business strategy of an organization.

Supporting standard menu & standard food preparation were provided by Hamburger University which provided up with the best practices which helped McDonalds to compete with its competitors.

Customer service program to attain the maximum efficiency in business.

Every McDonald's crew member embarks on structured training program. It provides with various facet of operations which includes Customer Service, Food Preparation and Workplace Health and Safety.

Universal Training program. Beyond this universal training, McDonald's offers nationally recognized training programs to crew people and managers wishing to progress further in the organization or who want to develop career paths in other parts of the retail, hospitality or other industries.

Values which trained during the training process linked to McDonalds

Serve the Community Work Together Act with Integrity Respect other people Make it Happen

Discuss how McDonald’s commitment to training has contributed to its position as a ‘leading global foodservice retailer’?

A2) McDonald's the world's leading “Global Foodservice Retailer, serving more than 32,000 locations, 60 million customers in more than 100 countries each day. More than 80% of McDonald’s restaurants worldwide possess and function by Independent local men and women. McDonald’s main agenda is to provide 100% satisfaction to the customers.

The principle through which McDonald’s had achieved the target goal is by operating towards “long-standing commitment to Quality, Service, Cleanliness and Value. Well trained crew and members are the first step to achieving these standards”.

McDonald's is well known for its “valuable brands” and it holds a “leading share by representing globally. It serves as one of the “branded quick service restaurant segment of the informal eating-out market” virtually in every country in which it does business. It serves to the world, with various favorites’ foods varieties such as - World Famous French Fries, Big Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin.

“Their focus and passion is what makes McDonald's the number one food service organization in the world”.

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Mission StatementMcDonald's brand mission focuses on "be our customers' favourite place and way to eat." It operates worldwide by its “Global Strategy – Plan to win cantering on 5 bases: People, Product, Place, Price and Promotion. It emphasise on improving operations by enhancing “customer experience”.VisionIt is a supply system that yields high-quality. It facilitates food products which are safe, without interrupting in supply procedure and generates benefits for employees, their communities, to environment and towards biodiversity.

Training & Support McDonald emphases on “Employee Training”, ensures to provide higher standard of

services. McDonalds target is to provide these standards across all outlets globally. Target is to capture all areas of business (from meeting and greetings to food

preparation, to cleaning the floor.) The method to rotating of the crew members through a number of different roles,

which takes an average of 44 shifts so as to become competent at all levels. Providing e-learning modules by allotting times to the crew members by which they

can use the “crew computer station” by accessing the company’s intranet site.

It is very important to maintain healthy and successful relationship with the employees as well as from the suppliers. World class Training is one of the prominent factor which place a major role in maintaining this relationship, which makes McDonalds to become an operational expert focused in providing an outstanding experience to customers.

The speciality of the training program at McDonalds is that, the day or moment one enters in the training program, the function “McDonald's Field Operations and Franchising staff” start working at that moment.

McDonald's Supply Chain department comes up an extensive network of the world's finest suppliers. McDonald's deals closely their suppliers to ensure that the restaurants are provided with the highest quality products at the most competitive prices.

World’s famous food retailer “McDonalds” with its set base of trademarks having a quantified operating system works at the training procedure which is more liable towards the employees.

Examine Ray Kroc’s training philosophy. How has McDonalds gained from this philosophy?

A3) “If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” —Ray KrocRay Kroc born in Oct 5 1902, Chicago, a US restaurateur, of a pioneer fast-food industry. He discovered a restaurant called San Bernardino, Calif, In 1955 Ray Kroc started up with a training program for owner-managers that emphasized standardization and automation. There were 7500 McDonalds restaurant throughout the world at the time when

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he died. In the early 21st century, McDonalds becomes the world’s largest food service retailer with near about 2500 of restaurants.

"Roland exemplifies (McDonald's chain founder) Ray Kroc's philosophy that you can succeed if you believe in your brand, treat your people right and give back to your community," Collins said.

Ray Kroc founded McDonald's on the very premise of opportunity, a career ladder to becoming an entrepreneur and learning skills that serve for a lifetime -- the opportunity to go from the crew room all the way up to the Board Room."From that one restaurant, the now world-famous McDonald's menu, signature service, and great restaurant experience are available today at more than 30,000 restaurants worldwide in 119 countries.Articles , The Times (Munster, IN) articles  March 2007

He emphasized on following areas:

A Unique Philosophy“Ray Kroc idea was to make a restaurant which known for its eminent food services by providing consistently high quality and uniform methods of preparation. His aim was to serve burgers, buns, fries and beverages that match up with same in Alaska as they did in Alabama.” A slogan was proposed by him depicts “In business for yourself, but not by yourself.” In his philosophy he gave three principle of a 3-legged stool:

1. McDonald’s,2. Franchisees,3. McDonald’s suppliers.

Rewarding Innovation Ray Kroc believes in Entrepreneurial spirit, and rewarded his franchisees for individual .

Creativity. McDonald’s large selling items—like the Big Mac, Filet-O-Fish and the Egg McMuffin— were created by franchisees. At the same time, the McDonald’s operating system insisted franchisees pursue the core McDonald’s principles of quality, service, cleanliness and value.

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Product Leadership

Product Differenciation

Operational Excellence

Operational Competance

Customer Intimacy

Customer Responce

The Roots of QualityMcDonald’s passion for quality emphasis that every single ingredient was tested and perfected to fit the operating system. Ray Kroc followed partnership—this time with McDonald’s suppliers—and he managed to create the most integrated, efficient and innovative supply system in the food service industry. These supplier relationships have grown over the decades: in fact, many McDonald’s suppliers commencing today first started business with a handshake from Ray Kroc.

Hamburger University In 1961, Ray introduced a training program, later called Hamburger University. There, franchisees and operators were trained in through “scientific methods” for running a successful McDonald’s. Provided with research and development laboratory to develop new cooking, freezing, storing and serving methods. Today, about 80,000 people graduated from this program.

The End of a LegendThere was a stage when Ray Kroc confined to a wheelchair, and had never stopped working for McDonald’s; He continued his work in the office in San Diego almost every day. He kept hawk's eye over the McDonald's restaurant nearby to his office, phoning the manager to remind him to pick up the trash, clean his lot, and turning the lights when not necessitate.Ray Kroc’s from his passion towards innovation and efficiency, and his relentless pursuit of quality, and his contribution towards charity, made a legacy in continuing with consistent inspirational, which shows integral part of McDonald’s even today.

How relevant is training and development for a company like McDonald which is seen as ‘deskilled’?

A4) The fast food chain like McDonald’s belongs to Food & Beverage (F&B) sector. In F&B sector services plays a crucial role in the upbringing of any organization or in other words the development of the firm service are very important. To provide sufficiently good service the employees should very well trained, so in that way the training comes into the picture. So we can say that training and development are interlinked to each other and let observe these concept with an example of McDonald’s.

In very short span of time the firm McDonald’s has created a huge visibility and grown internationally. It’s a fact that this fast food chain offers a cheap, clean and very convenient food but on the other hand there are various negative aspects attached with the firm, which are mentioned below: -

1. To get the strong hold in the market the firm targeted children’s (the future buyers). In other terms they offer fast food, which adds to the many problems namely obesity, asthma, mad cow, heart diseases and many more. If we are supporting such practices then what message are we giving to our children’s “at least 59 of the nation's 250 children's hospitals have fast-food restaurants?” (Tanner, 2006).

2. McDonald’s uses genetically modified potatoes instead of the local grown potatoes, which is scientifically proven that these food products are harmful and lacks in the nutritional aspects. So this practice is problematic.

3. Another issue is that the McDonald’s uses beef in the menu in abroad and the fact is that the firm brings beef from the various farms. If at any point of time the customer

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raise the question on the quality of the food (beef item) then it would be very difficult for the firm to trace from which farm the raw material belongs to. There is a possibility that the food item contains contamination and in that case the origin will be unknown, “a typical fast-food hamburger patty contains meat from more than one thousand different cattle, raised in as many as five countries” (Schlosser, 2004). So from the public health point of view this practice is environmentally knotty.

4. With respect to the culture problems McDonalds was dragged in the media for long time in many countries. In china the firm snubbed other cultures through some of its actions. In various other countries namely USA, Japan and many more the firm offended many vegetarians “McDonald's, the fast food giant currently embroiled in a row concerning undisclosed beef flavoring in French fries, has made a formal apology to those it has offended” (McDonald’s resolves French fry dispute, 2002). It seems to be just a small issue but it reality the firm created a mess for the customers who pray cow’s and consider them as sacred and just imagine eating beef is just like getting died. To compensate with this issue the firm legally apologized the customers and paid a thousand dollars in cash but the fact is that “A SORRY CAN NOT MAKE A DEAD MAN ALIVE”.

The above-referred issues are some of the glimpse of the “Deskilled” nature of the firm. It would be better for the universities offering hotel management course to teach the budding chiefs the difference between “What is Right & What is Wrong”. Proper training and development of the individual can make a lot of difference to the organizations such as McDonalds.

5) Describe the orientation training at McDonalds. What purpose does it serve?

1. The first stage of training at McDonalds is the Welcome Meetings.Purpose: These set out the company’s standards and expectation, by giving an overview of the company, including job role, food hygiene and safety training, policies and procedures, administration, benefits and training and development.

2. Facilitating with skilled operation: Operation skills are provided by the trainer to the trainees which helps them in following areas:Skills necessary in running of each of the 11 workstations in each restaurant, from front counter to the grill area.This helps the employees to learn to operate state-of-the art foodservice equipment.Purpose: So as to gain knowledge of McDonald’s operational procedure.

3. Major Trainings:Floor based or on –the-job training.Purpose: As people are more likely to retain information and this enables them to practice as they learn.

4. Classroom-based training session: It emphasizes on providing training sessions where the workbook is to be completed which consist of how to maintain quality in work design, to provide better services and cleanliness.

5. Tour to the restaurantPurpose: So as to get the feel of workplace, and to get through the how the work process took place by having a practical idea.

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6. Judgment of Right EmployeePurpose: It operates with a three week probationary period, and after this process each employee is rated on their performance, by which the organization comes up with conclusion whom to retain and to whom they want to terminate. This helps an organization to exist for a longer period of time within which they work with skilled and valuable people as per need by the organization.

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Q6) Discuss the training and management development process at McDonald’s with respect to its design, purpose, methods, and contents. What organizational goals does it help McDonald’s achieve? Evaluate McDonald’s T&D process based on your understanding of the process of training.

HUMAN RESOURSES plays an important role in McDonald’s. The main objective of training their human recourses is to maintain a balance in the employees overall working.Thus they try hard to create a good connection between the ability of the employees and the quality of the product. In McDonalds near about every employee get training for his work. E.g. floor management is polished against his degree in hotel management; cashier is trained for cash handlings. And all other staff is trained accordingly.

THE TRAINING AND MANAGEMENT DEVELOPMENT PROCESS AT MCDONALD’S WITH RESPECT TO ITS

DESIGN :

Under McDonald’s training and development is design in such a way that every employee are given rigorous training immediately when they are hired. Whether the employee is belonging to managerial posts or restaurant staff they have to go through the training process.

PURPOSE :

McDonald’s training and management development process is a valuable contribution to the company’s aims to achieve 100% consumer satisfaction goal. This programme takes place in certain stages. Initially the employees receive an orientation of the work area which is known as induction stages and after that McDonalds operates on and off job training to new employees.

METHOD :

McDonald’s have a standard method of performing each job. Frederick W. Taylor said about the Scientific Management principle in their business operations because for meeting the goal the company establishes systems of rewards. Taylor concept of motivation is to institute a system of inequitable pay for workers and monetary incentives by bonus system.(freeman. 1996)

CONTENTS :

At McDonald’s training mission is to be the best talent developer of people with the most committed individuals to Service, Quality, Cleanliness and Value in the world.

Ray Kroc once said, “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent.”

Training and development help in achieving Organizational goal of McDonald’s and its process

By implementing this strategy McDonalds is achieving its objectives by:

Achieving objectives: Customer are satisfying, its earn profit, services offered to customers sharing in revenue growth of the country so it helps to make further strategies, plans making strengths, expansion of franchises etc.

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Business development: As a customer become attractive therefore McDonalds opens new branches which helps in the expansion of business.

Outside the organization: These strategies are improving social life as well as environmental and the social awareness in the general public.

7) What purposes are served by diversity training for McDonald’s? What initiatives does McDonald’s take for diversity inclusion in its workforce and with what benefits?

Purpose served by Diversity Training for McDonalds: Diversity at McDonalds is seen as understanding, recognizing, and valuing the differences that make each person unique.

Initiatives taken for diversity inclusion in workforce: Recognition of talent performance: It has long- standing commitments to a diverse

workforce, by recognizing the talents and job performance of all employees and values the contributions that come from people with different backgrounds and perspectives.

E.g. Diversity initiatives at McDonalds have resulted in it having the largest number of minority and female franchisees in quick service industry, with more than 40.7% of all McDonalds US owner/operators being women and minorities. More than 25% of company officers are minorities; more than 24% of company officers are woman, 26% of middle-management employees are minorities and 46% of middle-management employees are women.

Presentations and informal training materials are provided for integration into team and department processes.

Diversity Education: McDonald’s is committed to diversity education and has developed a framework to provide it throughout the organization through formal presentations, workshops and seminars. Seminars and workshops like “Winning the Diversity and inclusion, Gender Speak, Asian Career Development, Black Career Development, and Women: Enhancing Personal and Professional Effectiveness, serves as the cornerstone for bringing diversity to life in the organization.

Benefits: Network place a very important role as it helps the company to achieve its diversity vision by improving process like performance feedback and employee development, recruitment and retention of excellent employees and maintaining a better connection with the diverse customer base. The company has employee network such as Women’s Leadership Network, Asian Employee Network, McDonald’s African American Council, etc.

Although as Diversity Training Education is an ongoing process, it creates awareness and building skills for managing an inclusive and diverse workforce.

8) What criteria are used to evaluate training effectiveness at McDonalds?

A) The various standards used and referred by managers of each unit are responsible for training and also for monitoring training effectiveness based on OCL’s through a computerized log.

Effectiveness: The results are used by head office to track restaurant performance, resulting in what is called a ‘training grade’ which serves as a key indicator in measuring the unit

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managers’ performance. This linkage ensures that training is prioritized.

Criteria to evaluate training effectiveness for Restaurant’s performance are as follows:

Overall training audit grade Proportion of fully trained staff Number of OCLs awaiting completion Employee satisfaction levels.

McDonalds links a number of other benefits to ongoing training. These include improved employee morale and productivity although for an effective training it gets very important to provide regular basis of training so as to bring into regular and continuous benefits, such as employee satisfaction, which in turn enhance customer ratings. It is very important to provide ongoing training related to their positions, and to promote them when they are ready.

Donald L Kirkpatrick, Professor Emeritus, University of Wisconsin was president of the American Society for Training and Development

Kirkpatrick’s four levels of training evaluation, this grid illustrates the basic Kirkpatrick structure at a glance. The second grid, beneath this one, is the same thing with more detail:

Level Evaluation type (what is measured)

Evaluation Description and Characteristics

Examples of Evaluation Tools and Methods

Relevance, Practicability and Relevance

1 Reaction Reaction evaluation is how the employees felt about the training experience. Did the training is relevant, their participation level, how much they have perceived and potential for applying that learning.

Feedback forms based on the subjective personal reaction to the training experience. Grading by delegates or online evaluation. Questionnaires and verbal reaction which can be noticed and analyzed.

Feedback reaction is very easy to obtain and is not expensive to gather or to analyses for groups.

2 Learning Measurement of the Learning evaluation is the increase in knowledge – and the intellectual capability from before and after

Assessments or tests before and after the training.

Interview or observation can also be used.

Relatively simple to set up, but more thought and investment required than reaction evaluation.

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the learning experience of the employees.

3 Behavior Behavior evaluation is the extent to which the trainee changed their behavior and applied learning back on the job - implementation.

Assessments need to be ongoing and subtle, and then transferred to a compatible analysis tool.

Evaluation of application and its implication is an important assessment. Measurement of behavior change is less easy to interpret and quantify than learning and reaction evaluation.

4 Results  Results evaluation is the effect on the business or environment resulting from the improved performance of the trainee.

It is important to agree and identify relevance and accountability with the trainee at the start of the training, so they understand what is to be measured.

Result evaluation individually is not particularly difficult. Also, external factors greatly affect business and organizational performance, which gives the true cause of good or poor result.

BIBLIOGRAPHY

1. Anonymous. Mcdonald's. Available: http://www.franchisegenius.com/McDonalds-Franchise/. Last accessed 20th oct 2010.

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2. Anonymous. McDonald’s Center of Training Excellence. Available: http://www.aboutmcdonalds.com/mcd/careers/hamburger_university.html. Last accessed 23 Oct 2010.

3. About McDonaldsAvailable at: http://www.mcdonalds.com/Accessed on: 24th Oct 2010

4. McDonald’s resolves french fry dispute. (2002, June 6). MarketLine Business.

5. Richard L.Daft,(2005).Organization Theory and Design, 8th edition, Thomson, south-western(Chapter 10)

6. The Ray Kroc Story. Available:http://www.mcdonalds.com/us/en/our_story/our_history/the_ray_kroc_story.html. Last accessed 23 Oct 2010.

7. Hodgetts, R.M., Luthans, F. (1994). International Management, New York: McGraw-Hi

8.Schlosser, E. (2004), Special report on slow food. In J. Johnson (Ed.), Global Issues,Local Arguments. Upper Saddle River, NJ: Pearson Education.

9.Tanner, L. (2006, December 4). Study finds allowing fast food in kid’ hospitals sends mixed message to families. Chicago.

Retrieved March 2, 2007, from LexisNexis.

10. Tom Werner and Sharon Vipond. Linkage Training to the business. Available: http://www.brandon-hall.com/publications/linking/linking.pdf. Last accessed 20 Oct 2010.

11. Anonymous. Mcdonald's. Available: http://www.franchisegenius.com/McDonalds-Franchise/. Last accessed 20th oct 2010.

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