6 Degrees of Separation Exemplar
McDonald’s- A Transnational Company
Abstract- Globalisation is a result of advancements in communication technology. Advancements in these areas
allow brands to become recognised globally, with many expanding across international borders to cope with
increased demand. McDonald’s is an example of a multinational company, with globalisation allowing the company
to expand into over 100 countries, producing a most recent net income of $4.68 billion. Whilst income has grown as
a result of globalisation the effect on the host countries is generally negative. Employee’s are paid low wages,
despite large profits and are subject to unfair conditions, whilst the environment is ravaged by garbage production
and air pollution and the culture of host countries is degraded due to the draw of the product and the ‘global
dream’. Although MacDonald’s has negatively impacted host countries environmentally, socially and economically,
the company is making changes to improve its global image. However, to maintain diversity, and reduce effects on
the environment it is recommended that consumers turn to more responsible, local suppliers.
Introduction- Globalisation is a term used to describe how ideas and commodities can spread across international
boundaries. The process is fuelled by innovation in communication technology and has both positive and negative
affects worldwide. The access to ideas of others has been blamed for creating a uniform global race, lacking in
diversity. However, others argue that the phenomenon has led to the generation of a more excepting social
environment.
The process of globalisation and advancements in communication technologies has allowed the expansion of many
companies. With growing popularity from consumers at home and internationally, companies may expand,
operating in more than one country at a time. These Transnational or Multinational Companies have been shown to
have both adverse and positive effects on the culture, environment and economics of host countries.
Mcdonald’s is an example of a Transnational country. Globalisation of this brand has had mainly negative effects on
the global environment. The production, transport, disposal and consumption of this product has caused the
degradation of cultures and has resulted in pollution, all for little to no economic benefit of the host country.
Body 1- History of the brand.
The MacDonald’s system (predecessor to MacDonald’s) was founded in 1955, in San Bernardino California, by Ray
Kroc. The restaurant chain had humble beginnings as a burger shop focused on delivering a few products with quick
service. The MacDonald’s logo at this time was missing the iconic M (as shown in figure 1). The company expanded
with the vision of providing high quality food with uniform preparation methods, allowing products to taste the
same wherever purchased throughout the world. The first international restaurants opened in Canada and Porter
Rico in 1967.There are now over 36,000 restaurants worldwide, extending throughout the middle east, Africa, North
America, Latin America, Europe and the Asia Pacific Region. As the company expanded the logo adapted to include
the iconic ‘M’ in the 1960’s (figure 2), with the ‘M” that is recognized today, implemented in 1968 (figure 3). The
Head Office for MacDonald’s remains in the United States of America in Oak Brook Illinois (refer to map in figure 4),
however most countries have their own Head Office. As the demand for the product grew so did the amount of
product produced by the company. This can be represented as a growth in income because, more products, equal
more sales, which results in higher gross income. The net income of MacDonald’s increased from 0.4 billion in 1985
to 4.6 Billion in 2016. The growth in net income is shown in figure 5.
Figure 1. Original MacDonald’s
Logo
Figure 2. Logo with the
First MacDonald’s ‘M’
Figure 3. The Immergence
of the Iconic ‘M’
Figure 4. Map Showing the Number of MacDonald’s Restaurants Worldwide
4,686
4,529
4,757
5,585
5,464
5,5
4,95
4,55
2,4
1,4
0,596
2,6
3,54
4,31
MACDONALD'S NET INCOME 1985 2016
0,433
NET INCOME (BILLIONS OF DOLLARS)
Figure 5.
1985 1987 1995 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
YEAR
Body 2- Influence of technology
The Globalisation of MacDonald’s can be largely attributed to advancements in technology. Advancements in
communication technology have reduced the friction of space allowing products and ideas that were once
unavailable, to be available. MacDonald’s is reported to be the brand that invests the most in advertising,
spending $963 million on ad campaigns in the US in 2011. Advertisements on television, the internet and
sponsorship of televised sporting matches has increased the demand for the product allowing it to grow. Due to
this MacDonald’s is now available in more than 100 countries worldwide. Technology has also improved the
product itself. Hamburger University is a training facility where individuals are trained and technology is
developed. Recently MacDonald’s has incorporated the use of technology into their restaurants in the form of
self-service kiosks, mobile ordering and custom burger/ sandwich design.
Body 3- Why move overseas
Unlike other multinational corporations MacDonald’s expanded across international boundaries in order to access
foreign markets, bringing the product to the consumer, rather than to take advantage of poor workers’ rights and
low wages. Although the move was not in relation to these issues, Macdonald’s has still come under scrutiny for
underpaying their workers, the effects on the environment and the degradation of culture.
Body 4- Conflicts
The global brand is under pressure to improve working conditions and environmental effects. Workers are
reported to be exposed to unsanitary conditions, where they work long, often illegal shifts. The farmers that
produce their products are also underpaid. In relation to the environment, MacDonald’s has been coined a great
garbage producer of the world. Not only do all the products come packaged in mostly un-recyclable waste, but
factories that produce the products pollute the air. Farmlands required to produce the products, clear land,
destroying native animal habitats. Eggs used in production are caged rather than free range in order to insure
lowest prices. Since 2005, McDonald’s has been using fair trade coffee in some of their restaurants and the brand
has committed to obtaining 100% of its coffee from sustainable sources. MacDonald’s is also blamed for
degrading the culture in many of its host countries. Here food preparation is important to culture. By offering low
cost alternatives people are turning from traditional recipes and their family to the drive through. The draw of
transplanted cultural dreams, causes people to leave rural areas (traditionally occupied) in search of the sweat
shops and factories of the cities, causing people to leave their traditional home and role. These choices also
potentially lead to poor health and nutrition.
Conclusion
McDonald’s is a transnational country that employs over 350,000 people in over 120 countries worldwide. Access
to international markets has allowed the consumer base of the company to increase to over 68 million customers
(daily), causing the gross income of the company to grow to 4.6 billion dollars (as of 2016). Although Mcdonald’s
employs over 350, 000 individuals many of these receive low wages and are subjected to poor working conditions,
with only richer countries profiting to any substantial extent. The availability of this product has also eroded the
culture in many countries, causing its people to turn away from their traditional food, roles and homes. The
impact of the production, manufacture, transportation and packaging on the environment is substantial. Although
Mcdonald’s is putting procedures in place to improve the social, environmental and economic impacts of the
brand, it is recommended that people resort to alternate sources of food. Grilled and Zambrero’s are fast food
suppliers that use ingredients that are sustainably and responsibly produced (eg. Hormone, preservative free, Free
range eggs and meat), that are packaging conscious and that offer the opportunity to improve the social and
economic circumstances of those less fortunate. These local brands provide consumers with responsible
alternative fast food, that reduce the impact of the global citizen on their local and worldwide community.