International Human Resource at the USAs McDonalds - Case Study Example

International Human Resource Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx August 18th, 2012 Introduction Fast food industry is one of the dominating industries all over the world. Notably, over the past decades the industry has rapidly grown in all the aspects (Royle, & Towers, 2002). For example, services have immensely changed from the simple traditional dishes to a variety of delicious meals appearing on the menu. This is as a result of integration and interaction between different people with different cultures and way of life. Consequently, the fast food industry has become a “global industry.” The most remarkable fast food restaurant to introduce their services across nations is the USA’s McDonald’s. This integration with different cultures has brought about the issue of international human resource management. With the challenges facing both global and local markets, the employees’ relation are not only affected but also neglected. On its own, employee relations is considered an important aspect of HRM with main concern being on the welfare of employees through policy implementation and/or employees trade unions (Armstrong, 2000). This paper therefore looks at the differences and similarities of different factors that focus on the labor relations not locally but globally (Royle, & Towers, 2002). In particular, the paper will evaluate and analyze the global fast food industry by focusing on three countries i.e. Singapore, United States, and Germany. To achieve this, it is important to evaluate how McDonald’s has been able to apply or regulate human resource management with different industrial relations across nations. It will also look at political, economic, innovation, and technology which can positively or negatively affect the general performance of the corporation. It will also focus on the issues to do with regulations and laws among the three countries which in one way or another are concerned with trade unions. We focus on trade unions because they are the main contributors on defending the workers’ rights. It is also noted that trade unions are the success factor in global fast food industry (Royle, & Towers, 2002). Discussion McDonald’s has moved into the two countries from USA and it is being taken as the one of the leading fast food restaurant in Germany (Royle, 2002). Hence it can be argued that McDonald’s Germany has interacted well with culture, politics and policies of that nation-Germany. However, the interactions connote more challenges in terms of labor relations. On the other hand, Singapore is interacted in terms of economic aspects hence one of the potential market holder of McDonald’s (Pereira, 2002). In all three countries, McDonald’s as a fast food restaurant has been considered as one of the friendliest industries to their workers (Armstrong, 2000). As taken from definition, labor union is the relationship of employees which caters for the social status and condition of its members by using group effort. It is aimed at negotiating with employers and government about issues that affect employees such as working conditions, wages, salary, benefits and contracts. For the three countries (Germany, Singapore, and United States), they have implemented well the issue of benefits of employment since human resource is taken as the ultimate important resource for any company as well the economy. The most challenging and important characteristics of Multinational Corporation is how they regulate their structures, policies and other factors that in one way or another influence the way business is conducted between nations. This is considered important because of the fact that different nations have different traditions, cultures, politics and behaviors which can affect the relationship between customers, employees and the government. At this point, it is meaningful to point out that though McDonald’s is considered one of the friendliest companies towards their employees, it is faced with the challenge of connecting its employees with the trade unions. As a matter of fact, trade unions are considered as one among other hindrances in McDonald’s. They argue that trade unions are third parties that can affect the relationship between workers and the executives. To outweigh the trade unions, the corporation is training and developing its employees so as to smoothen their relationship. Of the three nations, Singapore is the most welcoming nation in relation to working conditions, employment terms/laws and other social factors which normally affect the relationship between managers and employees (Pereira, 2002). This has been as a result of government’s “corporatist” rule of law which considers trade unions as organizations that not only weakens but also damages the politics of working with the effects such as wages. Though the rule of law is more employers based than employees concerned, Singapore government has given employee a free will to join or not to join trade unions (Pereira, 2002). In addition, negotiations between the trade unionist and the employers are conducted after every three years from the view of government that the lesser the negotiations the lesser the job absenteeism hence increasing productivity. In terms of economy, Singapore labor is taken as the backbone of its economy since it lacks other resources. Therefore, the government has the responsibility of improving and maintaining its economy in order to attract more foreign investors (Armstrong, 2000). Because of this, the government has developed a business-friendly environment. Germany’s labor laws and regulations are more worker friendly than those of Singapore or the United States (Royle, 2002). The German industrial relations system relies on cooperation of employees rather than statutory regulations that limit workers and hand the advantage to employers while bargaining. Germany’s policy towards industrial relations favors workers and gives them an edge while negotiating terms with their employees (Royle, 2002). The German law is very clear about the rights of employees and the obligations of the employer in their relationship with employees. Changes in German law in 2001, gave workers more bargaining rights making standardized human resource operations harder for fast-food MNCs. Notably, McDonald’s corporation had a rough time penetrating into German market (Royle, 2002). The rule of law in Germany advocate for strict legislative and institutional agreements. As a matter of fact, the country has interest in representation in which employees are represented differently by different organizations structured as trade unions. Moreover, the trade unions also known as “bargaining systems” are coordinated from a central point from which policies are regulated and implemented. The policies therefore are very rigid and companies have to innovate and change their structures to accommodate the policies. This has; in one way or another –affected the image of McDonald’s and other fast food industries in the country (Armstrong, 2000). The German system is on the decline as it needs to adapt to the flexibility requirements of the modern employers especially foreign MNCs used to different practices in their home country. Recently, the number of open clauses in collective bargaining agreements has increased as employers try to deal with the inflexible law. Looking at United States, distinct policies and laws are designed in a manner to support or cover the employers rather than employees as in other industries. The number of employees who are members of trade unions is low caused by different factors. Most notably, the owners of fast food industries are many and different as a result of franchise. In addition, USA’s restaurants are focused more on the speed of delivery and fulfilling their promises of smile that puts first the cultural aspect of friendliness as opposed to propriety. Since they are franchise oriented, USA fast food industries are more focused on the employers than the employees. Hence, the employees do not have unions and they are lowly paid. It is important to note that workers in these restaurants are not employed by the giants of the fast food but by the franchisees (Armstrong, 2000). The lack of unions among the employees in the fast food industries in USA is because of structural and cultural forces impacting not only the state but also national government, business people, USA workforce and corporations (Leidner, 2002). This has been propagated by the American rule of law and cultural accords which have given the franchisees the chance to employ and discipline their workers. Moreover, it has enabled the USA fat food industry employers to relatively un-regulated market. As mentioned above, USA fast food industries are managed with the promise of low cost to customers. So, profitability is only gained by reducing the cost of production, wages, and other costs of operation. Hence, restaurants are bound with minimal benefits, low wages to employees, tight employment and efforts to increase productivity among the workers (Leidner, 2002). Triggered by these factors and lack of unions, workers do not have a voice in the management of the restaurants and are exposed to hard/difficult working conditions. Due to decentralization of employment, employees are not only paid poorly but also do not have benefits associated with employment like in other employment relations. Because of these inhumane working condition and low income, the fast food industries are employing young workers who have no experience and knowledge of unions (Leidner, 2002). It is largely noted that most of the workers in the fast-food restaurants have other sources of income such as pension, family members and government programs. Hence, the employees have no need for unions since that is not their permanent occupation or source of income. By employing “young task”, the management makes sure that the workers are paid cheaply hence reducing the cost of labor since there is no need to employ skilled workers. The major difference between USA and Germany labor market is that, while USA allowed for expansion of fast-food industries to other countries, Germany focuses on specialization of its local industries (Leidner, 2002). Apart from restaurants owned by franchise, most of the other fast food restaurants enroll their workers to unions which cater for better pay and working condition among other benefits. To illustrate this, most of restaurant throughout Germany pay their workers overtime allowances if they attend work during week-ends and public holidays. Though fast food industries in all the three countries are based on low cost of labor and low wages to employees, Germany has better terms and conditions for the employees (Royle, 2002). Because of this, they employ relatively qualified workers with better skills as compared to USA. Though there are similarities in establishment, policies and organizational objective in the fast food industries between the three countries, the differences outweigh the similarities. Like stated earlier, in United States different policies and laws are bent to favor the employers rather than the employees (Leidner, 2002). Consequently, it is difficult to create workers trade unions since there are distinct groups and individuals to bring together. It has been observed that, working environment otherwise known as working conditions in fast food industry are comparatively low. Across the three countries, the issue of working condition is felt with Singapore being the least affected. The reason behind this is the fact that the country has adapted the favorable working and social conditions. On the issue of salary, the country has worked on policies that see to it that employees are paid well. For example, the employees from fast food industry like McDonald’s are among the highly paid employees across all industries. Also, the government has legislated policies that protect employees regardless of the fact that policies are created with interest of employers first. In addition, the government has implemented a legislation that provide for forty-four working hours, holidays, 2 months of maternity with pay and overtime with double pay on weekends and public holidays. This is not different in Germany with the government bill that rules against racism, gender discrimination, and discrimination based on gender or ethnicity in the work place. Based on these accounts, United States is at the most “unfriendly” side on the workers affairs in the fast food industry. This is attributed with the fact that employers are given the responsibility of setting that employment terms and the less involvement with trade unions. Singapore and Germany on the other hand are friendlier withholding the fact that McDonald’s had difficulties in establishing itself in Singapore as compared to Germany (Royle, 2002). Therefore, due to different political, cultural and social factors as mentioned earlier; the fast food industry has had relative difficulties in improving their employees’ relationships in different countries. The fast food industry has had its share in applying distinct strategies to make sure they work in-line with established laws, standards, and policies from the government and other organizations more so in the three mentioned countries. For example in Singapore, most of the fast food restaurant owners are employing the old people since the young population is focused on other types of jobs. As a result, McDonald’s and other fast food industry in the country have been able to maintain and manage their human resource. This is relatively similar with what the company is doing in the other two countries-Germany and United States (Royle, 2002). To add more light McDonald’s is training and developing its employees in order to come-up with personnel who can go the managerial positions and alike. Collaboratively, in the three countries McDonald’s is implementing utilization of distinct innovation and technology which is aimed at improving communication outside and inside the organization. By so doing, they motivate the workers (mostly those in executive posts) since the element of “monotony” is eliminated. Conclusion It is evident that every country has its own culture which in turn influences the strategies and processes of managing and maintaining businesses. For example in USA the culture of providing customers with good services and meals so as to have a ‘smile’ makes the fast food industry remain behind in other policy implementation such as inclusion of employees to trade unions. For Singapore, the government policies support the workers to get their pay, benefits and good working conditions. It is also evident from comparison that the three countries have different political, cultural, and social policies and laws that in one way or another affect the fast food industry (Royle, 2002). We also learn that, for a foreign investment in fast food industry to flourish; a strategic planning through study ought to be conducted before establishing a fast food restaurant. On the same point, the investor need to understand the government stands on unions and how employees are represented. As noted above, different countries have different strategies on managing their human resource as well as public relations. USA has franchises as the main owners of the fast food industry who hire and look at the employees’ welfare. This may not be the same in the other two countries in which like Germany has very little to do with the workers and their welfare. There are many challenges that exist for the global fast food companies in seeking to have standard approach to HRM. One such challenge is the well-known fact that different countries have different form of governance, policies, culture and politics. Another such challenge is the unwillingness of government to uphold the employees’ rights through establishment of trade unions which will cater for the workers’ welfare (Royle, & Towers, 2002). Very few if there exists elements which are compatible with the standard approach to HRM. An example of one compatible element is technology which is being applied globally to better implement the human resource management. Finally, some elements work against the adoption of standardized methods of HRM in the fast food industry. For example, the rule of law in some countries like in Australia provides that the local investors invest and specialize in their own country rather than spreading other wings to other countries (Royle, & Towers, 2002). This is not the same with what is happening in USA where investors in fast food industry are encouraged to spread their wings to other countries with McDonald’s as a good example. References Armstrong, M 2000, Strategic human resource management: A guide to action, Kogan Page Publishers Leidner, R 2002, ‘Fast food work in the United States’, in Royle, T & Towers, B (eds) Labour relations in the global fast food industry, Routledge, London, pp. 8-23 Pereira, A 2002, ‘ “McAunties” and “McUncles”: labour relations in Singapores’ fast-food industry’, in Royle, T & Towers, B. Labour relations in the global fast food industry, Routledge, London, pp. 136-53 Royle, T & Towers, B 2002, ‘Introduction’, in Royle, T & Towers, B (eds) Labor relations in the global fast food industry, Routledge, London, pp. 1-7. Royle, T 2002, ‘Undermining the system? Labour relations in the German fast-food industry’, in Royle, T & Towers, B (Eds) Labour relations in the global fast food industry, Routledge, London, pp. 76-101. Read More