A case study of McDonald's in the context of understanding
globalisation and anti-globalisation.
<\\ \
Niamh Mohan
Submitted in part-fulfilment of a Bachelor of Arts Degree in
European Business & Languages (K4)
April 2003
Written under the supervision of Mr. Michael Barry
National College of Ireland,
Mayor St,
IFSC,
Dublin 1.
Acknowledgements
I would like to thank a number of people for their help during the writing of this
dissertation. I would like to thank my supervisor, Mr. Michael Barry for giving me
direction, belief and such great encouragement throughout my dissertation.
Thank you to Dr. Gabriel Byrne for his informative seminars on how to compile a
dissertation.
I would also like to thank Dr. Ian McLeod, who has been such an inspiration
throughout my study here in NCI.
Finally I would like to say the biggest thank you to my parents for their constant
support and help. They are my inspiration and my mentors and I love you both dearly,
thank you.
1
Declaration
I, Niamh Mohan, here by certify that this material, which I now submit for assessment
as partial fulfilment of the study which will lead to a BA in European Business Studies
and Languages, is entirely my own work and that it has not been taken from the work
o f others save to the extent that such work has been cited and acknowledged within the
text of my work.
Signed:
A_
h fc r lL a S !
Date:
2
April
Abstract
In today’s world globalisation takes many forms. This dissertation examines it under
the subjects of consciousness, communication, culture and markets and money. In
recent times anti-globalisation movements have grown in strength and one of their
focal points is McDonald's. The primary objective of this research is to analyse why so
many groups are opposed to McDonald's in light of its global success. McDonald’s
was the chosen company for the case study because the author sees it as a company
that exemplifies globalisation.
The analysis of McDonald's involved the author conducting a large amount of
secondary research and analysis and also an interview with an ex-manager of
McDonald’s.
Each subject is individually dealt with and the discussion and analysis allowed the
author to realise why anti-globalisation groups are opposed to McDonald’s.
3
Table of Contents_________________________________Page
Acknowledgements
1
Declaration
2
Abstract
3
Table o f Contents
4
Chapter One: Introduction
1.0 Introduction
5
1.1 Research Objective
5
1.2 Research Question
6
1.3 Research Contribution
6
1.4 Structure of Research
6
Chapter Two: Literature Review
2.0 Introduction
7
2.1 The Emergence of Globalisation
8
2.2 Communication
8-9
2.3 Markets and Money
9-11
2.4 Culture
11
2.5 Consciousness
12-13
2.6 Globalisation and Risk
13
. 2.6.1 Manufactured Risks
13
2.6.2 Environmental Risks
13-14
2.6.3 Health Risks
14
2.7 Anti-Globalisation and its Development
15
2.7.1 Big Money
15-16
2.7.2 Big Business
16-18
Chapter Three: Research Methodology and Propositions
3.0 Introduction
19
3.1 Case Study
19
3.2 Semi-Structured Interviews
20
3.3 Bias
20
4
3.4 Secondary Research
3.5 Difficulties
20
.
,2 0
3.6 Propositions
21 -22
Chapter Four: McDonald's Case Study
4.0 Introduction
23
4.1 Company Information and Policies
23-25
4.2 Conclusion
26
Chapter Five: Consciousness
5.0 Introduction
27-30
5.1 Discussion and Analysis
*
5.2 Conclusion
30-32
32
Chapter Six: Communication
6.0 Introduction
33-35
6.1 Discussion and Analysis
35-37
6.2 Conclusion
37
Chapter Seven: Culture
7.0 Introduction
38
7.1 Discussion and Analysis
38-40
7.2 Conclusion
40
Chapter Eight: Markets and Money
8.0 Introduction
8.1 Discussion and Analysis
41
*
41-44
8.2 Conclusion
44-45
Chapter Nine: Conclusions
9.0 Final Address
46-47
Bibliography
48-49
Appendices
51-55
5
Chapter 1
1.0
Introduction
As Schlosser explains (2001:4) the McDonald’s Corporation is a dominant symbol of
America’s service economy, which now accounts for 90 percent of the country’s new
jobs. McDonald’s operated about one thousand restaurants in 1968. Today it has about
thirty thousand in over 121 countries and employees approximately 1.5 million people
worldwide, which is more than any other American organisation, public or private.
McDonald’s is America’s largest purchaser of potatoes, beef and pork- and the second
largest purchaser of chicken. McDonald’s is the largest owner of retail property in the
world. In fact, the company earns the majority of its profits from rent collection not
from selling food. McDonald’s has the world’s largest expenditure budget on
advertising and marketing. With this budget it has replaced Coca-Cola as the world’s
most famous brand. The influence of McDonald’s on our daily life today is hard to
exaggerate. The Golden Arches are now more widely recognised than the Christian
Cross.
Yet the increase of anti-McDonald’s and anti-capitalism is alarming.
With the implementation of emergency evacuation procedures in Edinburgh during an
anti-capitalism demonstration, thousands protesting against the construction of a
McDonald’s restaurant in Kharkov, Ukraine and the vandalising of an outlet in France
by Jose Bove, the ideas and beliefs of McDonald’s opposition should not go unnoticed
or overlooked too quickly.
There is a serious strength in the anti-McDonald’s movement and a prime example of
this is the famous McLibel case in England.
1.1
The Research Objective:
To analyse why so many groups or organisations are opposed to McDonald’s in light
of its “global success”
6
1.2
Research Question:
What understanding of globalisation and its effects can be obtained from a study of the
McDonald’s Corporation?
1.3
Research Contribution:
This dissertation should complement and add new information to previous works on
McDonald’s with reference to it globally. Beneficiaries of this work include the
Me Spotlight website, other global organisations and those in the global fast-food
business. The contribution of the research on this topic will also inform McDonald’s
itself and will give the added benefit of seeing both sides of the argument in a clear
and informative way.
1.4
Structure of the Research
Chapter 2: A literature review which gives an overview of the development of
globalisation and anti-globalisation to the present day.
Chapter 3: This chapter describes the research methodology undertaken and states the
propositions that will be under study in this case study referring to the McDonald’s
Corporation.
Chapter 4: The case study of McDonald's is profiled and detailed. The information
sources
used
t o . compile
this
chapter
are
the
McDonald's
website
(www.mcdonalds.com) and the Me Spotlight website (www.mcspotlight.org).
Chapter 5-8: Describes and analyses the different propositions as separate chapters.
Chapter 9: An evaluation of the project is given and the author concludes with a final
address.
7
v
CHAPTER 2: Literature Review
2.0Introduction
To study the phenomenon of globalisation, a clear, specific and distinctive definition
must be given and understood. Many people have spoken about globalisation but when
asked to define it, they cannot.
A definition is important as it will shape the descriptions, explanations, evaluation,
prescriptions and actions of globalisation.
Robertson (1992:8) defines globalisation as “A
concept
that
refers
both
to
compression o f the world and the intensification of consciousness of the world as a
whole..... both concrete global interdependence and consciousness of the global
world.”
Globalisation can be usefully conceived as a process (or set of processes) which
embodies a transformation in the spatial organisation of social relations and
transactions, generating transcontinental or interregional flows and networks of
activity, interaction and power.
It is characterised by 4 types of change as outlined by Held and McGrew on the
website www.polityxo.uk/global:
■ Consciousness: The margins between domestic matters and global affairs
become less obvious as even the most local occurrence may have huge global
consequences. Also, effects of distant incidents may be felt elsewhere.
■ Communication: The growth of global interconnectedness, which is linked to
the acceleration of global interactions and procedures, as the development of
global systems of communication increases the swiftness of the transmission
of capital, information, ideas and people.
■ Culture: It implies the implication of interconnectedness and culture.
■ Markets and Money: There is a stretch of economic, social, and political
activities across frontiers,'territories and continents.
8
Some socialists argue that globalisation is entirely a recent historical phenomenon.
Others believe that it goes back many centuries and was the equivalent or similar to
the levels of globalisation to that of today.
Both of these perspectives are inaccurate, globalisation can be traced back many
centuries but it is only in recent decades that it has accelerated and become so largescale.
2.1
The Emergence of Globalisation
Globalisation has no exact starting point in history; it had been in the imagination of a
few as far back as the 6th century with the emergence of Buddhism. In the 18th century
some global transactions were being carried out but on a very small quantity basis and
also quite territorialized ,e.g. tea, cocoa and sugar were sold across continents but on a
less global scale than now, they had no global corporate marketing strategies back
then!
Before the 19th century globalisation had not really taken effect. A very small minority
has thought about it in some aspect but they looked no further into it as they saw it as a
short-lived occurrence rather than a phenomenon.
Following below are examples of the 4 points explained above of the types of changes
that characterise globalisation as outlined by Held and Grew.
2.2
Communication
In the years from 1850 to the 1950s the onset of the first global communication
technologies, the merging or uniting of the first global markets, the beginning of
global finance and the globalising of some organisations were visible.
These events heralded the beginning of globalisation and helped transform and
advance it to a global spectacle.
Global communication began with the development of the telegraph. It was possible to
contact or communicate with people on the other side o f the globe in a relatively short
period of time. Information could be sent in days rather than months. At the end of the
19th century ‘distanceless voice communication’ was possible via the telephone.
People on the opposite ends of the world could speak to one another. Next in line to
9
the telegraph and telephone were the wireless radio and fax machines. In the early
1900s these were very expensive communication tools and limited to all but a few
small circles of people.
From the beginning to end of the 20th century a huge progression in global
communication unfolded. With the advancements in cables, transoceanic cables have
been noteworthy in expanding external communications.
“Where the earliest transatlantic cables laid in the 1950s were capable of
carrying less than a hundred voice paths, by 1997 a single transoceanic cable could
carry some 600,000 voice paths.”
(Giddens, 2001:53)
The progression of the radio can be seen from the UNESCO statistic given in 1997:
the world count o f radio sets increased dramatically to some 2 billion in 1994 or 35
times the level o f the 1930s.
With the development of the mobile phone, transoceanic cables, personal computers
and satellites, they have all advanced the acceleration of globalisation as well the
internet. The internet is seen as a ‘time-space compressor’ as it allows for real time
communication as well as the possibility of sending documents, images and other
forms of information at real time i.e. immediately.
According to Waters (2001:203) English is the now the lingua franca of the global
communications world.
Although communications has seen huge advancements and progression, it has by no
means reached its end. Telecommunication infrastructure is worldwide but not
developed evenly throughout. There is always room for advancement and
improvement.
2.3
Markets
As shown by J.A Scholte the emergence of globally marketed brand name packaged
food appeared in the late 1800s e.g. Heinz Foods and Campbell Soup. In the late 1800s
more and more branded foods were being marketed outside the origin country of
production e.g. Coca Cola and Western Electric appliances.
10
With the growth o f colonial settlement and other transnational emigration throughout
this period, emigrants from Asia, North America and Europe took their need for
‘home’ commodities with them to all comers of the world.
The range o f global products continued to grow in the 1900s- Henry Ford’s Model T,
Coca Cola, the Marlboro cowboy and McDonald’s to name but a few.
Price controls were positioned on some produce e.g. sugar, rubber, coffee, to
determine transworld prices. These controls were initiated by governments through
multiparty commodity arrangements.
Markets continued to grow and expand globally throughout the mid 1900s and an
example of this huge growth is that “by the late 1980s Readers Digest was issuing 28
million copies across 39 editions in 17 languages printed at 24 locations.”
(Scholte, 2000:76)
Retail outlets also expanded rapidly throughout the globe and in recent times mail­
order catalogues have experienced exponential development as well as on-line
shopping. On-line shopping allows the seller to see the entire globe as their customer
or potential customer base, and it also allows the buyer more freedom in choice and
price and added extras that are not available in their country. This market enhancement
has put the onus oh the companies to co-ordinate their' global distribution, promotion
and sales activities. Nowadays companies use the idea of 'think global, act local’
because at the basic ground level local circumstances still influence market decisions.
Money
In the late 19th and early 20th century a developing globalisation of money occurred as
well. Money developed a unified global function between the 1930s and the 1950s
through the sterling and the dollar bloc. The dollar bloc was created under “The
Breton Wood Agreement” in 1944 and it became a global currency player.
However, even under the two gold standards of the sterling and the dollar bloc, the
majority of currencies were transported in paper or metal form over distance and
across borders, it lacked the supraterritorial mobility like now when money can be
transported by air consignments and electronic transfer systems.
11
No major disasters or recessions set back or halted the globalisation of money. In fact
in the 1900s more currencies joined the Sdollar and the £sterling, (German mark, yen,
Swiss franc and others) on the floating exchange.
The most important suprastate money to come into circulation in recent times was the
Euro in 1999 and which came into circulation in 2002. Other monetary forms have
accelerated globalisation: bank cards, traveller’s cheques, credit cards, debit cards,
laser cards, ATM machines, on-line banking and telephone banking.
Since the 1970s monetary globalisation has far surpassed anything observed under the
gold standards, some reasons for this are the amounts of money involved now and also
the substantial growth of the financial markets since the 1950s.
2.4
Culture
As discussed on the website www.globalpolicv.org, technology has now created the
prospect and even the probability of a global culture. The internet, fax machine,
satellite and cable TV have brushed away the old national cultural borders. It is the
global companies that have the ultimate influence on ordinary citizens no matter where
they live.
A lot of attention needs to be given to the potential consequences of global culture.
With so much influence from the west, there can be a change in ideas and values.
According to this view, globalisation is a form of ‘cultural imperialism’ in which the
values, styles and outlooks of the Western world are being spread so aggressively that
they smoother individual national cultures. (Giddens, 2001:227)
According to Wurm (1996) (cited in Scholte 2000:227) “up to half the languages
spoke in the world are already threatened with extinction, and some linguists forecast
that over 90 per cent could die out during the next century.”
12
2,5
Consciousness
All o f the factors explained above have helped to spread a global awareness
throughout the world. It has extended to wider circles o f people from the mid 1800s
onwards. The 1850s onwards saw the beginning of global events e.g. the Olympic
Games, which was first, held in 1896. Mass circulation of information e.g.
newspapers, made people more aware of global events.
In academic areas global thinking began to take pace in the late eighteenth and early
nineteenth century, sociologists on globalisation and environmentalists on global
environmental issues etc.
However, in day to day life, global consciousness was not as widespread among
ordinary people as it was among intellectuals, Scholte (2000:73) explains how a
survey conducted in 1962 by UNESCO showed that approximately 70 percent of the
world’s population were ignorant of goings-on outside their village.
No comparison can be made with the scale and force of globalisation in earlier times
and that which has occurred since the 1960s.
From the 1960s on, people began to see the world more and more as one place as a
result of exponential growths in global communication, global markets and money
flows. Nowadays daily television brings news and information of events happening in
all comers of the globe. Now people can identify more with global issues and
processes than before because of the increased awareness of their interrelatedness.
As Robertson (1992:184) claims, the world is becoming more and more united; people
feel a stronger social responsibility that extends further than their national borders.
Financial aid and humanitarian relief from one country to another are common
occurrences as people feel like they belong to an international community and must
help others in difficulty irrelevant of where they are in the world.
Also as (Giddens, 2001:56) says “a global outlook means that people are increasingly
looking to sources other than the nation-state in formulating their own sense of
identity”, e.g. inhabitants from northern Ireland are more likely to identify themselves
as catholic or protestant rather than Irish or British; inhabitants of Ireland, do they
consider themselves Irish or European when asked?
13
Among people living under conditions of globalisation, some have constructed
important features o f their individuality in supraterritorial terms.
2.6
Globalisation and Risk
Globalisation reaches or affects most parts of the world in various ways, be it
economically, politically, culturally or socially. Sometimes the effects of it are hard to
predict and control as no one has a definite idea of what the future holds. Globalisation
brings risks with it, risks that are immeasurable in origin and uncertain in their end
results.
An example of this is manufactured risk, which in turn brings environmental and
health risks.
2.6.1 Manufactured Risks
Manufactured risks are those that are the outcome of our impact on the natural world
from both technology and our knowledge. Both environmental and health risks are
consequences of manufactured risks-outcomes of our actions.
2.6.2 Environmental Risks
With the increase of manufacturing and technological developments, environmental
risks are on the increase.
Examples are: depletion of the rain forests, pollution, damaging of the ozone layer,
large-scale agricultural projects and nuclear power are just some ways in which we are
putting our environment in danger. It is practically impossible to determine the causes
and also difficult to calculate the consequences. One can really only calculate the exact
consequences when the damage has already been done.
Another hugely damaging environmental risk is that of global warming, the probable
outcomes are devastating: the rise in sea levels will lead to the wiping out of towns
and cities and people. Changes in climate could be the possible cause of the massive
bush fires in Australia, the serious snowstorms in America and the frequent flooding
problem in Ireland, events which are happening simultaneously throughout the world.
14
It is very difficult to determine who or what is responsible for these changes and also
what should be done about them. Giddens (2001:68) reiterates what Beck (1995)
believes, that it is likely that effective action will not be taken to address the risks
because the extent of both the cause and the outcome is unknown and unfixed.
2.6.3 Health Risks
From the environmental risks come health risks. Due to depletion of the ozone layer
people have been advised to protect themselves from harmful UV rays as the level of
skin cancer has steadily increased. Another example of manufactured risk is that of
food. Resulting from advanced technology and modem farming some farming
techniques sacrifice on food safety and could possibly have detrimental effects on
humans. Two debates spring to mind-those of Bovine Spongiform Encephalopathy
(BSE) and Genetically Modified (GM) foods.
BSE had major outbreaks in Europe recently and is caused by giving livestock feed
that includes ingredients of other animals. A fatal human disease has been linked to
infected beef. Research is been conducted to learn the consequences and results, but so
far the results are inconclusive.
GM foods have also brought controversy with them.
Giddens (2001:628) explains that genetically modified organisms created through the
splicing of the genes and can then be transferred between animals and/or plants.
Dr. Arpad Pusztai (Giddens 2000:629) conducted experiments and found that rats that
ate GM food suffered substantial harm to their immune system and reduced organ
development.
Media coverage and attention and anti-GM food protests led to many GM foods being
taken off the market. Its long-term effects on humans are not yet known but they are a
cause for concern.
15
2.7
Anti-globalisation and its development
Demonstrations and protests against globalisation have developed in the last 10 years
or so. Protestors come from many different fields’ e.g. animal rights supporters,
environmentalists, human-rights activists and unite together in demonstrations and
protests to express their beliefs and discontents. Some well-known groups represented
at anti-globalisation demonstrations are:
❖ People for Ethical Treatment of Animals(PETA), an animal-rights
support group;
♦> Rainforest Action Network, environmental campaigner;
❖ Global Trade Watch- human rights activists;
❖ Greenpeace.
Activism towards anti-globalisation can be categorised into two areas, as shown in the
article written by the Canadian Security Intelligence Service:
1. “big money”- global agreements on economic growth;
2. “big business” multinational corporate power.
2.7.1 Big Money
According to the Canadian Security Intelligence Service thousands of anti­
globalisation activists are being drawn to meetings of international monetary, trade
and environmental organisations, which in the past attracted very little if no protest
interest at all.
In 1999, Seattle was the venue for one of the first anti-globalisation/ multinational
corporate power protests which was both disruptive and violent and received huge
media attention. Seattle was hosting the World Trade Organisation Ministerial
Conference, 29 November-3 December, in 1999. The conference was effectively
stopped as security officials were unprepared to deal with the sheer number of
demonstrators-50,000 and their technological backups.
Wayne Ellwood (2001:96) states that the basic focus of the demonstrators was the
‘concern that economic globalisation is spinning out of control’.
16
In April 2000 the venue was Washington, where 15,000 protestors gathered at the
spring meeting o f the International Monetary Fund (IMF) and the World Bank (WB).
The WTO, the WB and the IMF are seen as the ‘spearheads of economic
globalisation’ as they are viewed as creating, examining and rendering judgements on
global trade practices. (Canadian Security Intelligence Service).
These international institutions are prime demonstration targets as they are perceived
to have more power than elected governments, have only profit motives, are heavily
influenced by corporate interests and follow the capitalist philosophy.
It is claimed by some protagonists that these institutions (WTO, WB and IMF)
encourage and assist corporate power and that they overshadow certain government
attempts to promote economic growth and expansion. Many groups and organisations
are calling for the reform of these institutions and others are going further ‘demanding
the outright abolition of these agencies and a complete restructuring of the global
financial structure’. (Elwood 2001:52)
2.7.2 Big business
In its 1999 Human 'Development Report the UN Development Program (UNDP) notes
that “many global corporations now wield more economic power than nation-states”.
Large corporations are a focal point of anti-globalisation' protestors as they stand
accused “of social injustice, unfair labour practices-including slave labour wages,
living and working conditions-as well as a lack of concern for the environment,
mismanagement of natural resources, and ecological damage” . (Canadian Security
Intelligence Service)
Worldwide support has been achieved by the various anti-globalisation demonstrations
as they focus on ‘global corporations’, and their ‘global effect’, such as Nike, Shell
Oil, Gap, Starbuck and McDonald’s.
Probably one of the most famous court cases for anti-globalists is that of the ‘McLibeF
Trial.
17
McDonald’s sued Helen Steel and Dave Morris (two environmentalists) for the
publication of a pamphlet linking McDonald’s to issues of:
•
Rain-forest depletion;
•
Third World poverty;
•
Animal C ruelty;
•
Waste production;
•
Health;
•
Poor labour conditions and
•
Exploitative conditions.
(Klein, N 2000:388)
The trial lasted a historical 313 days in the court room, throughout which McDonald’s
suffered huge public humiliation as the court heard of shocking revelations from both
Steel and Morris, who were assisted by nutritional and environmental experts and
scientific studies.
Klein (2000:390) explains that in the judge’s ruling on 19th June 1997 he confirmed
that McDonald’s “exploits children” by “using them as more susceptible subjects of
advertising”; that its treatment of animals had been “cruel”; that it pays “low wages”
and is anti-union; that its management is “most unfair” and at times can be
“autocratic” and also that a regular intake of McDonald’s food everyday does
contribute to the risk of heart disease. Although the judge ruled that a large part of the
pamphlet was an exaggeration, McDonald’s were victorious, however few celebrated
this victory. It was considered victorious for Steel and Morris, (a community gardener
and unemployed postal worker respectively), as they had beaten the $11 billion
corporation at their own game and gained the support of millions against McDonald’s.
According to Klein (2000:393) “if the courts are becoming a popular tool to pry open
closed corporations, it is the internet that has rapidly become the tool of choice for
spreading information about multinationals across the world”.
During the McLibel Trial the McSpotlight website was set-up to enhance awareness of
McDonald’s goings-on; it has been highly successful having been accessed over
SIXTY-FIVE MILLION TIMES. (McSpotlight website)
18
The internet enabled, one of the most famous individual anti-globalisation protestors
in recent times, Jose Bove, spread his beliefs and ideas. He obtained global fame by
driving his tractor into a McDonald’s Restaurant in Millau, France. He has been
arrested and imprisoned and in France is deemed a martyr and media star.
It can be seen that the demonstrations and protests are linked to economic, cultural and
social effects on the world.
Economic institutions, multinational corporations and governments are the main
wrongdoers according to the anti-globalists and awareness of these organisations and
their behaviour is being spread through mixed media. With the increase in numbers
that has been seen at rallies and demonstrations, the current situation is not a phase and
is likely to grow in strength and seriousness.
19
Chapter Three: Research Methodology and Propositions
3.0
Introduction
This chapter explains the research process undertaken by the author. An explanation of
why a case study was chosen and the various research methods will be given.
While researching the subject of globalisation a vast amount of literature was read by
the author in order to determine where the concept of globalisation originated. For the
development of globalisation and anti-globalisation to be understood, it must be traced
from it origins to its current state and this is carried out in chapter 2, the literature
review.
Both globalisation and anti-globalisation are well studied and documented and so the
author found it best to use secondary data and information.
3.1
The Case Study
Brannick and Roche (1997:99) state that “the purpose of using case studies in research
is to collect and analyse data in the context of some wider theoretical concern55. Yin
(1993:13) suggests that the case study examines a phenomenon “within its real-life
context55. The author thought it most appropriate to use a case-study method in order to
fulfil the research objective and answer the research question.
3.2
Semi-Structured Interviews
Powey and Watts (1987:34) compare a semi-structured interview to that of a shopping
list of topics and for which the interviewer wants to get answers. The interviewer has
greater freedom in the order of the questions, how they are asked and how much time
is spent on the different topics.
A semi-structured interview, as mentioned by Saunders et al (1997: 23-74) is a
qualitative research method and is used to carry out exploratory talks to understand a
situation, its reasons and causes. Throughout the interview certain questions may be
omitted and others expanded where the interviewer sees appropriate.
20
3.3
Bias
There are two types of bias that must be considered. The first to be considered is
‘interviewee bias’. This may result from the interviewee not wanting to focus on a
certain theme or subject.
A second type of bias can come from the interviewer themselves. How the questions
are asked and interpreted can be influenced from the interviewers own personal
beliefs. The interviewers tone and gesticulations may create bias towards the
interviewee.
3.4
Secondary Research
Hakim (1982: 34) defines secondary data analysis as ‘any further analysis of an
existing data set which presents interpretations, conclusions, or knowledge additional
to, or different from, those presented in the first report or inquiry as a whole and its
main results’.
During the time spent researching for this dissertation an extensive literature search in
order to obtain a more profound insight into the chosen topic was carried out. The
numerous sources o f secondary data included library books, magazine articles and an
extensive part was conducted by online searches and online databases. The various
methods of research were essential in order to understand the research problem, to
carry out the research process and in the future to comment on the findings.
3.5
Difficulties
Throughout the course of this dissertation numerous difficulties did arise which
hindered the thorough research of this subject. No response .was obtained from the
McLibel campaign organisations in either Dublin or London after numerous attempts
proved futile. A PO Box number was given as the address of the Irish McLibel
Support Group and after sending numerous letters response was received.
Also there were difficulties in obtaining interviews with McDonald's management; a
lot o f rescheduling did occur but alas to no avail. In addition, in one interview that was
scheduled, the interviewee didn’t turn up and other management staff were too busy to
give the author their time.
/
21
3.6
Propositions
In keeping with Held and McGrew’s explanation of globalisation, the author examines
McDonald's under the same headings.
Consciousness
With the continuation of globalisation and the idea of seeing the world as one place,
McDonald's produced their first ever Social Responsibility Report. I want to analyse
the global consciousness of McDonald’s by asking:
❖ Is the McDonald's Social Responsibility Report viable, as the founder of TNS
(The Natural Step), Paul Hawken, sees it as a report “about how a corporation
that has been severely stung by bad publicity and declining earnings now wants
to plea its case to critics?”
Communication
Communication has developed in leaps and bounds over the past 150 years. Now it is
possible to communicate with people on the other side of the globe in “real-time”. As
explained in chapter 2, the internet is seen as a ‘time-space compressor’ which permits
immediate communication. McDonald's has been at the same time a beneficiary and a
victim of the internet and its power.
<♦ Has the communication tool strengthened the McLibel actions through the
website McSpotlight?
Culture
The prospect o f a global culture is now more possible than ever with the dominant
influence o f communication and technology.
♦> What role does McDonald's play in the Americanisation of the world?
22
Markets& Money
With McDonald's having restaurants in 121 countries, there is an onus upon it to
maintain its high level performance. Recently McDonald's have experienced hard
times.
♦> Is this the beginning of the end or just an adjustment for over-expansion?
23
Chapter Four: McDonald’s Case Study
4.0
Introduction
McDonald's is probably the most well-known fast food restaurant service in the world.
It began in 1954 when Ray Kroc invested all his savings into a milkshake mixer called
“Multimixer”. He heard that a hamburger stand was using 8 of these in California and
he headed west to investigate more. He got in contact with the McDonald brothers and
soon began opening restaurants on their behalf. The first McDonald's restaurant was
opened in 1955 in Des Plaines, Illinois. This building has now become the McDonald's
museum filled with memorabilia and artefacts.
McDonald's expanded at a phenomenal rate and in 1961 Ray Kroc bought all rights
from the McDonald's brothers to the McDonald's concept for an estimated sum of $2.7
million.
Huge international growth was witnessed through the 1960s and 1970s and by 1984,
when Ray Kroc died, McDonald's had sold over 50 billion hamburgers and served
roughly 17 million people a day.
McDonald's
currently
operates
more
than
30,000
restaurants,
employing
approximately 1.5 million employees in 121 countries and serves around 46 million
customers each day. Yearly McDonald's generates more than $40 billion in total sales.
4.1
Company Information and Policies
Mission Statement
McDonald's mission is to be the best quick service restaurant experience, its will
provide this experience through:
•
Development: Lead the Quick Service Restaurant market by a programme of
site development and profitable restaurant openings.
•
Our People: Achieve a competitive advantage through people who are high
calibre, effective, well motivated and feel part of the McDonald's team in
delivering the company's goals.
24
•
Restaurant Excellence: Focus on consistent delivery of quality, service and
cleanliness through excellence in our restaurants.
•
Operating Structure: Optimise restaurant performance through the selection of
the most appropriate operating, management and ownership structures.
McDonald’s People Promise
McDonald's People Promise is used to remind its people what is to be expected from
McDonald's and what its goal is: “To be the best employer in each community around
the world.”
A Franchising Company
Franchising has played a significant part in McDonald's success story. Franchising is
still an important aspect of McDonald's way of doing business. Globally
approximately 85% of all McDonald's restaurants are franchised and owned by
independent people.
Social Responsibility
McDonald's believes in giving back to the community and, through Ray Kroc’s
instillation, it is part of their culture.
McDonald's are committed....
■ To doing what is right;
■ To being a good neighbour and partner in the various communities;
■ To conducting their business with the environment in mind.
25
Worldwide Growth Strategy
McDonald’s
growth
restaurants,
ii)
strategy
maximising
is
sales
based
and
on
three
profits
at
elements;
existing
i)
adding
restaurants,
iii) improving international profitability.
Ronald McDonald House Charities (RMHC)
Ronald McDonald House Charities (RMHC) and its more than 200 Ronald McDonald
Houses around the world provide a "home away from home" for families with
seriously ill children. Since 1984, RMHC and its global network of local chapters have
provided more than $300 million for children’s programs.
McDonald’s has numerous policies concerning various aspects of the business.
Suppliers and Purchasing Policy
,
McDonald’s will:
•
Purchase its produce locally as long as it meets McDonald’s product and
hygiene standards;
•
Only purchase from suppliers who comply with government and EU
regulations and who operate conscientiously;
•
Co-operate and collaborate with suppliers to try and achieve higher quality and
efficiency standards;
•
Communicate and build up long-term relationships with suppliers.
Nutrition and Healthy Eating
•
McDonald’s is dedicated to supplying high quality healthy food;
•
And is committed to the development of wider healthy eating policies and
works with government departments to do so.
26
Environment
•
McDonald’s analyses its business in terms o f its impact on the environment as
it realises that it has a responsibility to assist and safeguard the environment;
•
McDonald's has an environmental manager;
•
The company believes in communicating to its shareholders, stakeholders
(shareholders, employees, customers and the wider community) about
environmental issues;
•
McDonald's endorses sound environmental practices.
Community Involvement
A central business principle of McDonald's is to support its local communities
Some if its aims are:
•
To be synonymous with aiding youths that are in need;
• To assist charities and community projects;
• To be a leader by example through the implementation of non-discriminatory
employee practices;
• To involve all levels of the company in its contributions to the community;
• To communicate with stakeholders about its community involvement
4.2
Conclusion
In this day and age McDonald's may be used as a symbol of globalisation. It has
conquered the world in terms of fast food restaurants and will continue to do so.
Today McDonald’s is America’s largest purchaser of potatoes, beef and pork and is
also the second largest purchaser of chicken. McDonald’s is the largest owner of retail
property in the world and earns more from its rent than actually selling fast food.
27
Chapter Five: Consciousness
5.0
Introduction
In April 2002 McDonald’s produced their first ever Corporate Social Responsibility
Report www.mcdonalds.coni/corporate/social
It gives a global perspective of McDonald's progress and plans relating to the 1)
community, 2) the environment, 3) people and 4) the marketplace. The report also
explains where social responsibility fits into its business strategies. McDonald’s has
made a commitment to be a socially responsible leader in the fast-food industry and it
will increase awareness of the issues that, in its view, will make a difference; i.e. in the
communities, to the environment, and on behalf of people.
McDonald’s sees its social responsibility as part of their core values. McDonald’s are
of the opinion that social responsibility is “a way of thinking, caring, and responding
to a multitude of complex community, environmental, and people issues and
circumstances.”
Community
McDonald's business continuation depends upon global community support, however
sometimes there can be resistance and conflict to the entrance of McDonald's into a
new market.
McDonald's feels that it is important to play an active role in the community and it
illustrates this best through its involvement in the Ronald McDonald House Charities
(RMHC). This charity was founded in memory of Ray Kroc and is a public charity.
RMHC’s mission is to create, find, and support programs that directly improve the
health and well being of children. To date McDonald's has donated more than $300
million to fulfil this mission.
The author is o f the belief that McDonald's strength lies in its brand image and the
golden arches are the second most recognisable symbol in the world. Its involvement
in the numerous charities, programs and events extends the reach of its brand image
and also its association with charitable causes is an important factor for McDonald's.
There are many ongoing initiatives throughout the world in which McDonald's
28
partakes in e.g. sponsorship of Clean Up Australia Day, support of Chinese soccer,
education in different areas, international youth camps and community development.
The intention, with regards to the community, is to extend the reach of the RMHC
internationally and also to be able to construct some kind of measurement tool to
report on their community involvement and development.
Environment
It is necessary for McDonald's to focus on the environment as the sourcing of its beef,
chicken, fish and fries comes under attack from environmental critics.
One o f McDonald's goals is to integrate environmental sustainability into the
corporation. According to TNS (The Natural Step) “Sustainability is the minimum
system conditions required for society to operate in balance with the rest of nature.”
The corporation is committed to the protection of the environment and is resolute
about analysing every aspect of its business with regards to its impact on the
environment and it will take more than expected action to ensure that future
generations live in an environmentally sound world.
The most difficult and challenging task for McDonald's now is to design quantifiable
data regarding its performance and the environment, to have a system that can analyse
data and put forward suggestions on improvement.
People
With more than 1.5 million employees worldwide, McDonald's employees make up an
important part o f the company. McDonald's aims to be the best employer in the
various communities throughout the world by focusing on the following five people
principles, which mirror McDonald’s values:
■ Respect and Recognition
■ Values and Leadership Behaviours
■ Competitive Pay and Benefits
■ Learning, Development and Personal Growth
■ Resources to Get the Job Done
29
In order for McDonald's to maintain profit and productivity levels, employee
dedication, development and value must also be maintained and strengthened. In the
People section of the report McDonald's elaborates on its five people principles and
gives examples of them being put into practice in different countries. Diversity
education in the corporation is also dealt with through seminars and workshops.
i
In the report the importance of people throughout the corporation is acknowledged.
People are viewed as an asset to the company and through recognition, education,
rewarding, training and development, this asset can be enhanced.
Marketplace
Increased interest in and focus on McDonald's influence in the marketplace has led to
McDonald's taking more responsibility. Its responsibility has expanded from just the
fast-food industry to issues of animal welfare, beef safety, and toy safety research.
The BSR (Business for Social Responsibility) explains that an ethos for companies to
undertake more responsibility for their goods/services regarding its production, use,
and consequences has become more widespread in numerous industries.
McDonald's demonstrates its social responsibility in the marketplace through
numerous activities:
i) The encouragement of positive change regarding animal welfare;
ii) The creation of the McDonald's International Scientific Advisory Council for
the protection of beef safety;
iii) The implementation of the Hazard Analysis and Critical Control Point
(HACCP) systems and;
iv) The collaboration with third-party laboratories to advance toy safety research.
McDonald's has developed a Supplier Code of Conduct and it is compulsory that
suppliers comply with this code.
Even though McDonald's doesn’t have any direct dealings with animals, it does
acknowledge its responsibility as a meat, poultry and pork purchaser, and so has
created an animal welfare council. This council is an advisory board on animal welfare
issues.
30
McDonald's also established an International Scientific Advisory Council for advice
and knowledge on BSE (Bovine Spongiform Encephalopathy). . This council is made
up o f leading scientists and medical experts that are researching ways to prevent BSE
and strengthen McDonald's beef safety program. McDonald’s needs to strengthen their
beef safety program so as to ensure consumer confidence and trust.
5.1
Discussion and Analysis
This is McDonald's first ever social responsibility report and it has received a notable
amount of media attention. No one can refute the fact that this report is a step in the
right direction for McDonald's and its future; however the author wanted to examine
how viable this report was in the context of social responsibility..
Paul Hawken is the founder of The Natural Step (TNS) in the United States. TNS
participates in McDonald's Global Environment Council and is assisting McDonald's
in implementing a sustainability framework into their business
Hawken is quite sceptical of the report and sees it as “a melange of homilies,
generalities, and soft assurances that do not provide hard metrics of the company, its
activities, or its impacts on society and the environment.”
While the production of the report has been widely praised the report does fall short in
some aspects.
Regarding the environment McDonald’s stated that it now demands the use of
antibiotic free chickens by its poultry farmers; this is a harsh irony for the small
poultry farmers who went out of business because of the giant agri-corporation using
antibiotic pumped chickens years ago. This shows the large purchasing power that
McDonald's has and its ability to control its suppliers through its demands.
With reference to sustainability McDonald's detailed their collaboration with TNS (the
natural step) for the implementation of a sustainability framework into their business.
The first step in this framework is the identification of McDonald's social and
environmental impacts and the construction of a strategy to encompass these impacts
and move forward. The author thinks it crucial that the real sense of sustainability not
get lost in between all the corporate speak.
31
Recently Environics International Ltd produced results from a worldwide survey and
the findings were that people are more inclined to judge companies by their social
behaviour rather than their financial performance. Promoting social responsibility of
companies is good for business.
It seems to be that a lot of large multinational corporations, whose products or services
have been received negatively in the world, are jumping on the bandwagon of
corporate responsibility and sustainability. It is the author’s belief that they are only
jumping on this bandwagon if it is deemed profitable and doesn’t modify their purpose
or focus.
The idea of sustainability then brings into question the roles of the World Trade
Organisation, the World Bank and also the International Monetary Fund, which as
shown in chapter 2 are perceived to have only profit motives and are heavily
influenced by corporate interests.
If promoting social responsibility is good for business, then is McDonald's, who has
had more bad than good publicity of late, trying to win people over by promoting its
social responsibility? The author concluded this to be the fact from analysis of
numerous points.
Firstly, the report was entirely internally audited and was subject to no independent
verification. As social reporting is still in its infancy Bob Langert, director for global
social responsibility, said that there is a universal lack of acceptable auditing rules and
regulations, so it was through no fault of McDonald's that they has to internally audit
the entire report. The author believes that the report is not feasible with only internal
auditing as this creates an unfair bias in relation to the data and information given.
Secondly, the report is lacking in hard data and figures which doesn’t allow for
comparison with past performance. It lists all the awards it gives out and has received
but without comparison these are meaningless.
Thirdly, the report fails to talk about trade unions or collective bargaining. In the
people section, where one would envisage some mention of trade unions or collective
bargaining it contains no reference to them. Even though one of the people principles
is ‘respect and recognition’, the author is of the opinion that McDonald’s just ignored
this area as there is not one mention of trade unions in the entire report.
It must be noted that McDonald’s did acknowledge the fact that one of their problems
lies in their franchising system. What is meant by this is that McDonald's have no
method o f gathering common restaurant information from its 30,000 plus restaurants.
32
With no common data, irregularities begin to form; the picture form the analysed data
becomes uneven and untrue. The author sees this as one of the root problems in
McDonald's social responsibility reporting and one which will hinder its effectiveness
in future reporting.
5.2
Conclusion
McDonald's must be commended on its production of its first ever social responsibility
report and the first in the fast-food industry, however, the viability of the report comes
under scrutiny into question as it has numerous shortcomings. As McDonald's has
been a target of nutrition experts, labour unions, environmentalists, animal welfare
activists, and anti-globalisation protestors, it came as no surprise to the author that
there were accusations that the report was part of a global PR campaign to improve thev
corporation’s image.
On the subject of social reporting Bob Langert, director for global social
responsibility, said that it is still in its infancy. Therefore the author believes that this
will be one of many social reports from McDonald's and as social reporting grows so
j
will McDonald’s reporting. It is hoped by the author that more viable social reports
will be produced in the future by McDonald's as she questions the feasibility and
integrity o f this report that contains no hard data on the company’s activities or what
impact it has had on the environment and society.
33
Chapter Six: Communication
6.0
Introduction
Me Spotlight see themselves as “the biggest, loudest, most red, most read antiMcDonald’s extravaganza the world has ever seen”.
Me Spotlight Website
This website was produced in conjunction with the findings of the McLibel Trial. The
aims o f the website are to firstly to make a free, globally accessible information library
about McDonald's available to anyone wanting to find out the reality about
McDonald's, other multinationals and McLibel. Secondly it aims to assist other
campaigners worldwide who are trying to unveil the truth behind other multinational
corporations. Thirdly it wants to show McDonald’s and others that trying to silence the
critics is futile as the internet presents an open and unrestricted forum for the people.
And finally it aspires to inform other campaigners about the use of the internet as a
new medium in which to voice ones opinion and to fully cover campaigns.
McSpotlight was built by the Mclnformation Network, an - independent group of
volunteers from 16 countries who have joined together to work on the website, and
began in February 1996, following the McLibel Trial, and monthly has more than a
million hits to the site.
McLibel Trial
The McLibel trial developed from McDonald's libel actions taken against Helen Steel
and Dave Morris, two members of London Greenpeace, who allegedly distributed a
leaflet called “What’s Wrong With McDonald's. The libel action turned out to be the
longest ever in British legal history.
The distributed leaflet attacked McDonald's blaming it for exploiting children through
advertising, manipulating their staff, endorsing an unhealthy diet, ill-treating animals
and damaging the environment.
34
As London Greenpeace was an ‘unincorporated association’, McDonald's needed to
find out people’s names in order to bring libel actions against the campaigners. This
was achieved through the infiltration of seven McDonald’s spies into the London
Greenpeace group, finding out their goings-on, their organisers and the people
responsible for distributing the leaflet. In 1990 McDonald's served five volunteers libel
writs over the concerned leaflet. This wasn’t the first time McDonald's threatened libel
action, usually the recipients apologised for their behaviour and McDonald's withdrew
their action. Three volunteers backed down and apologised but two refused to and
went to court to do battle with McDonald’s.
The author believes that McDonald's manages to defeat or make so many people or
organisations back down because of its fear factor. People believe that when
threatened by such a large powerful corporation they stand no chance of victory as it is
McDonald's who is seen as the one with the power.
“It just really stuck in the throat to apologise to McDonald's. I thought it was them that
should have been apologising to us-well not us specifically, but society for the damage
they do to society and the environment.”
Helen Steel (libel defendant)
It could be interpreted that Helen Steel and Dave Morris never saw or believed in this
fear factor as they knew that when brought to justice McDonald's would be found
guilty of the wrong-doings, it was just a matter of doing so.
So began the longest libel trial in British history. As Dave Morris and Helen Steel
were not entitled to any financial aid, the Me Libel Support Campaign was set up to
generate unity and financial assistance as the defendants were representing
themselves.
An ex-McDonald’s manager describes the two defendants, Helen Steel and Dave
Morris, as nutters and believes that McDonald's would do so as well. It is uncertain
whether this is an individualistic or a McDonald's point of view. The author is lead to
the supposition that this viewpoint is bias as the interviewee believes that the famous
leaflet was incorrect yet didn’t follow the McLibel trial.
The leaflet was contested by McDonald's under the categories of employment,
animals, food poisoning, nutrition, recycling and waste, rainforests and publication.
The trial lasted over two years and judgement day was the 19th of June 1997. Mr.
Justice Bell ruled that Dave Morris and Helen Steel had not proved their accusations
that McDonald’s was partly to cause for the rain forest destruction, cancer, heart
disease and Third world starvation.
35
Nevertheless the judge did rule that the defendants proved that McDonald's did
“exploit children” through its advertising, was “culpabably responsible” for the cruelty
to animals, fallaciously advertised its food as nutritious, are “strongly antipathetic” to
unions and it does pay low wages.
Even though McDonald's won and Dave and Helen were summoned to pay £60,000
in compensation, it was a PR disaster for McDonald's. The general public and media
saw the trial outcome as a loss to McDonald's as it itself had been put on trial and
ridiculed to some extent with its responses- the complete transcript of the trial hearing
is available at www.mcspotlight.org.
T
6.1
Discussion and Analysis
In chapter 2 Klein (2000:393) is of the opinion that “if the courts are becoming a.
popular tool to pry open closed corporations, it is the internet that has rapidly become
the tool of choice for spreading information about multinationals across the world”.
This statement is exemplified by the McLibel Trial as it was the McLibel Trial that
opened up McDonald's closed closets and it is now the McSpotlight website that is
spreading the information across. The site not only contains the famous pamphlet that
led to the McLibel trial but it also contains the 20,000 plus page transcript of the libel
trial, a debating room for discussions and much more.
The internet has strengthened the McLibel campaign as a low-profile programmer for
the McSpotlight website explains (Klein, 2000:395) “this is a medium that doesn’t
require campaigners to jump through hoops doing publicity stunts, or depend on the
good will of an editor to get their message across.” The campaigners themselves are
their own editors and the risk of libel actions being taken against them is low to non­
existent. Another strength of the McSpotlight website is its clarity. The website is user
friendly and is kept simple yet effective. The main list of subjects (issues, media,
campaigns, company, debating room, for sale and beyond McDonald’s) are clearly
stated and permits all kinds of user to effectively avail of the website.
McSpotlight have what are known as ‘mirror sites’ in more than three different
continents and so if their main server in the Netherlands was to be targeted by libel
actions, these ‘mirror sites’ would effectively maintain the website in its original state
36
through the usage of the ‘mirrors’. With this backup system McSpotlight have in
effect set up a system that prohibits McDonald's from blocking or suppressing the
spreading of information about the company. To the author this shows the clever
usage of an effective medium that makes a vast-amount of information available to
anyone anywhere in the world at the press of a button. A libel threat from McDonald’s
to close the website is futile.
Dave Morris sees the internet as a valuable medium for people wanting to carry out
research and it also allows people to communicate with one another through the site.
Effectively for Dave the McSpotlight website was another nail in the coffin for
McDonald's censorship strategy. The author is of the opinion that the key to the
success o f the McLibel Trial and the McSpotlight website is mass communication.
With the combination of force, the anti-McDonald’s were able to spread their
information and obtain information for the trial and website that without mass
communication wouldn’t be possible.
The internet is also seen to successfully allow for the global harmonisation of
international actions for those with few resources. The 18th annual Worldwide AntiMcDonald’s Day, which coincides with the UN World Food Day, took place on the
Wednesday the 16th of October 2002. Protests against animal cruelty, exploitation of
workers, damage to the environment and society, cruelty to animals, and the
exploitation o f children as susceptible subjects of advertising (all issues that the anti
side relate to McDonald's) took place around the world from Brazil to the UK,
Australia to Russia, the USA, in Eastern and Western Europe, and also in South
Africa. The internet was the communication tool that made this possible and has
permitted the protests to grow as extensively as they have. Another international
organisation that was set up with the help of the internet in 2000 is the McDonald's
Workers Resistance, which also took part in the action on the 16lh of October 2002.
The McDonald's Workers Resistance is an underground organised rebellion ‘against
the idiocy o f McDonald's and capitalism’. The organisation was founded in Glasgow,
Scotland and comprises of ‘a loose network of McDonald's employees, who work
together to strengthen the position of workers in relation to their employer’.
37
In 2001, ‘PR Weekly’, a UK marketing industry magazine positioned the McLibel
case and campaign 9th in a list of the Top 20 most effective public relations ‘consumer
facing’ campaigns of all time. These campaigns were mainly UK based.
This is a remarkable achievement for the campaigners as they have no marketing
budget, no institutional backing and no PR firm to help them. Although this doesn’t
have any real repercussions for McLibel and McSpotlight, it does however show to
the large corporations that this campaign is one to be reckoned with and it is an
example to others activists of what can be achieved with cooperation and
amalgamation.
6,2
Conclusion:
The author is o f the opinion that the internet as a communication tool is the most
effective medium of transmitting information for McLibel through McSpotlight. The
internet has strengthened the McLibel actions as interested folk can be kept updated
with McLibel’s and McDonald's goings-on through the free mailing service offered.
Also the trial was the first of its kind and the McSpotlight website keeps that interest
in it alive. The continuation of actions against McDonald's are gaining strength and
this is evident through the anti-McDonald's day rallies and the numerous
demonstrations and protests, whose size and magnitude are thanks to the
communication on the internet.
As McLibel is an organisation with neither a marketing budget, nor a PR company,
their reach and availability have been hugely increased because of the internet as there
are no limits for its growth or availability.
38
Chapter Seven: Culture
7.0
Introduction
Thomas Friedman believes that “globalisation is in so many ways Americanisation:
globalisation wears Mickey Mouse ears, it drinks Pepsi and Coke, eats Big Macs, does
its computing on an IBM laptop with Windows 98. Many societies around the world
can’t get enough of it, but others see it as a fundamental threat.”
To think o f globalisation as only Americanisation is wrong, Americanisation is only
part of globalisation. The author believes Americanisation to be the imposition of the
American culture on the world. The American culture is both vast and wide-ranging
and so the author deems McDonald's only to be a participant and. not a leader nor sole
contributor to the process of Americanisation.
7.1
Discussion and Analysis
The globalisation of the fast-food industry
The globalisation of the fast-food industry is one means by which the American
culture has spread. McDonald’s has over 30,000 restaurants in more than 120 nations,
and through is viewed as a transmitter of the American culture. Many are opposed to
the growth of McDonald's in their region as it symbolises the continual imperialism of
America. A fear exists that this continual imperialism poses a threat to local cultures
and traditions, i.e. that this imperialism will wipe out local cultures and redesign the
world with one big global culture.
When asked about the globalisation and Americanisation of the world, an exMcDonald’s manager said that “American management style has been adopted right
throughout the world as part of its globalisation.” This standardisation of rules,
regulations and procedures across the globe had a homogeneous, effect. The author
believes that it firstly has an effect on the business culture as they all become the same
throughout the globe and so the cultures of the restaurants are very alike if not the
same-this has an adverse effect on local traditions and customs as McDonald’s
employs more than 1.5 million people. Secondly the author pertains this homogeneity
to effects on culinary traditions and rules of certain countries e.g. in India or Israel, in
these countries McDonald's is viewed as breaching local cultural customs and habits.
39
The American influence is seen to alter cultures and brings the world closer to a single
global culture.
This homogeneity can go from having a negative effect, felt by anti-McDonald’s
protestors, to a destructive effect as shown by the wrecking of a McDonald's restaurant
in the French town of Millau by Jose Bove and his companions.
Jose Bove
Jose Bove, who is viewed as a national hero and sympathised with by predominant
French politicians, was symbolically attacking America by his destruction of the
McDonald's restaurant in Millau in 1999. Jose Bove is a sheep farmer and a union
organiser and in recent times, has become a leading member of the anti-globalisation
movement.
McDonald's was the chosen target as Bove sees it as the most conspicuous symbol of
US global imperialism and also an icon for the attempts of the World Trade
Organisation (WTO) to control food consumption and global agriculture. This is a
viewpoint taken by most anti-globalisation protestors and is one of the reasons why
McDonald’s has so many adversaries.
Both the WTO and McDonald's are looked on as dangers to different cultures as they
promote the standardisation of food. Bove is intolerable to either organisation and this
view is growing momentum within the anti-globalisation movements, people no
longer just accept things at face value and will now voice their opinions in protest to
alter proceedings. McDonald's has the reputation of damaging local cultures by forcing
itself on the country and people and it drives small farmers and restaurants out of
business. As explained on the website www.mbcnet.org there is a fear that one “will
become American...by using American products, eating American food and enjoying
American cultural artefacts”
40
Think global, act local
McDonald’s is attempting to overcome the stigma attached to its arrival into a country
by adapting to local traditions and customs. In Ireland a green milkshake is served for
St. Patrick’s Day, in India lamb burgers, are served, German McDonald's serve beer;
southern France McDonald’s replace pickles with aubergines. Little variances like
these are attempts to be accepted by local communities and they add to McDonald’s
belief that “they are family-run businesses that the operator runs like his own.”
7.2
Conclusion
McDonald’s main participation in the Americanisation of the world is culturally. From
being such a dominant icon throughout the world it has huge influence over other
cultures, whether it wants to or not. McDonald's are aiming to focus on local cultures
by adapting the menu accordingly. These efforts are viewed as insufficient by anti­
globalisation activists, who believe McDonald's to be a curse for cultures and
ramifications of the corporation are far more wide ranging than just fast-food.
41
Chapter Eight: Markets and Money
8.0
Introduction
With more than 30,000 restaurants worldwide, McDonald’s reported a net income of
$894 million, revenues of $15 billion and system-wide sales of $41 billion in 2002.
These figures are stereotypical ones that would be expected of McDonald's, a global
company that has continually gone from strength to strength since becoming a public
company in 1965. However, what they fail to show are debts that have increased from
$6.2 billion in 1996 to over $10 billion in 2002, McDonald’s first ever quarterly loss of
$343.8 million in January 2003, the decline of same-store sales for 12 consecutive
months in the US, the loss of more than $20 billion in market cap in the last year and
the trading share price of $14 which is nearing a ten-year low. Are these figures signs
of hard-times that will ultimately led to the end of McDonald's or are they signs that
change is needed?
8.1
Discussion and Analysis
The beginning o f the end?
The recent financial reports on McDonald's are causing a bit of concern. With its debts
nearly doubling from $6.2 to $10 billion in three years, huge losses of more than $20
billion in market cap in one year and a near ten-year low trading price for is shares,
confidence and security in investment in McDonald’s is at an all-time low. An exMcDonald’s manager, interviewed by the author, said that “people are looking at this
situation and thinking are McDonald's getting desperate? Are they seeing the end?”
There is a belief in people’s minds that this is it-McDonald’s has reached its peak and
is now on the slow but steady decline. Even with the closure of over 700 under­
performing restaurants, and projected yearly growth rate of 10%-15% now viewed as
an “unrealistic challenge”, the end of McDonald’s is not yet in sight, the author
believes it unrealistic to think so. As Winston Churchill said in 1942, “Now this is not
the end. It is not even the beginning of the end. But it is perhaps, the end of the
beginning.” McDonald's have grown at a phenomenal rate and that has reached its end,
now they must alter their course to continue being profitable.
The interviewee believes that McDonald's current phase is definitely one of
adjustment and this echoes what Jim Cantalupo, who became the new CEO in
December 2002 after Jack Greenberg, said, “McDonald’s has changed before and will
continue to change with the consumer.” Globally the consumer’s purchasing decisions
are changing and this is affecting McDonald's and so something within McDonald's
needs to change to redirect the consumer back to the doors under the golden arches.
McDonald's need change not closure and Jim Cantalupo is the man that has
undertaken this formidable task. Cantalupo took over McDonald’s International in
1987 and oversaw the growth and expansion of McDonald's in Europe and Japan.
McDonald's must believe that Cantalupo will work his magic like back in 1987; within
7 years he more than doubled the number of McDonald's restaurants abroad from 2000,
to 4700.
McDonald's change is fundamentally explained by the alteration in its philosophy
from “building more stores to get more customers toward getting more customers in
our existing stores”.
An adjustment for over-expansion:
This change in philosophy sounds and reads quite simple but if the outer layers of
McDonald's are stripped off, it then becomes a daunting task as McDonald’s itself is
fundamentally two different companies with two very different roles: firstly it’s a
franchiser in the fast-food industry and secondly it is a real-estate company.
McDonald’s acts as a real estate company as it owns both the land and the buildings of
the majority o f its franchised locations. Through this ownership McDonald's collects
about 10% o f total sales as rent plus a 4% royalty from each franchisee. This system
explains why for such a long-time McDonald's pursued profits through major global
expansion; this was its main focus and the huge profits that were generated from it
blanketed its in-store problems of quality in service and food. Now with the decline in
McDonald's expansion, the in-store problems are becoming all too clear. This transparency has led to McDonald’s focus of change being put on the improvement of
the company’s quality of food and service.
43
/
Improving the quality o f McDonald's food and service
The author is of the opinion that one of the causes for the decrease in the quality of
McDonald's food and service was the abandonment of the restaurant-grading system in
1993. With no grading system the various McDonald's restaurants could do as they
pleased, as the ex-McDonald's manager explains, “as long as you were willing to work
you could become a McDonald's manager. McDonald's downfall is that they don’t
select their staff correctly- there are certain people who are suited to McDonald's and
others that aren’t. The management skill level has gone very low.”
No specific talents or criteria were needed and with no grading system on
performance, these newly appointed managers were more than likely inadequate. In
turn this affected the restaurants, with so many unsuitable managers coming of age
they were bringing the system down. Through bringing the system down, the author
means that the new managers were not fulfilling their job tasks or carrying them out
poorly and this was filtering through to the crew members, thus bringing the level of
service and food quality down which led to the overall operation of a poor fast-food
service. Greg Sanders of the QSR Magazine says that, “speed and quality of service
are really the basis of business.” A recent survey carried out by the QSR (Quick
Service Restaurant) Magazine exemplifies, in the Fortune 500 Magazine, McDonald’s
deficiency in speed and quality of service. In the drive-thru service, McDonald's are
rated 35 seconds slower than Wendy’s (one of McDonald's main competitors in the
United States). McDonald's calculated that 6 seconds at the drive-thru increases sales
by 1%, with an average annual sales of S1.6million in each franchise, these mere 35
seconds translate as a little over $93, 000 a year per franchise. With franchisees
running 85% o f the total global number of restaurants (85% of 30000= 25500) this
total loss of 35 seconds globally translates to a loss of $2,371,500,000 yearly. This is
an astonishing figure for such a small time difference between two competitors. The
company wasn’t interested in service levels even though it were loosing so much from
its poor quality, it was only interested in profit from expansion and so it let the service
slip because it could afford to: this is a great paradox of McDonald's, it was the quality
of its food and service that has it in its current financial predicament. It must slow
44
down the expansion plans and focus on the improvement o f its food and service to try
and improve its profits.
It could be interpreted that the whole system now relies on the implementation of the
new quality standards and procedures.
Execution o f the new system
With the implementation of a menu reduction, simplification of the ordering process
and the re-introduction of the restaurant-grading system, McDonald’s has already
begun its alterations. Is it enough though? Even though McDonald’s reported a 2.5%
improvement in service in 2002, in the article ‘Can McDonald’s Cook Again’, it was
stated that “O f McDonald's 13,000 US restaurants, fewer than 10% have consistently
performed up to expected levels since the beginning of the year (2003).”
In general people are more inclined to remember bad experiences longer than good
ones and this doesn’t favour McDonald’s who continues to come up against its
problem of inconsistency. McDonald's needs to bring it back to basics and focus on its
customers and its service to the customers. This is crucial for McDonald's as
competition increases, not only within the fast-food industry but also from the outside
competitors e.g. sandwich stores. Davis explains in his article ‘Can McDonald's Cook
Again?’ that sandwich stores like Subway are the latest and most perilous alternatives
to McDonald's. Subway are currently in a segment that has a growth rate of 12.8% and
has more US outlets than McDonald's. No longer must McDonald's look at
competitors within the fast-food industry but also from others industries that also have
the potential to do harm to McDonald's customer and profit levels. This is why
McDonald's must come up with the right solution and implement it correctly
throughout because if not then the end of McDonald's might not be so far away.
8.2
Conclusion
McDonald's has experienced phenomenal growth over the past 35 years or more, with
approximately 30,000 restaurants worldwide and 1.5 million employees in 121
countries. Recent losses spell the end for the profit driven global expansion and now
McDonald’s are bringing it back to basics- the customer and service. The author
believes the implementation of the new strategy is just as vital as the strategy itself,
45
how McDonald's go about the new changes and their implementation will be the
deciding factor for its future. Jim Cantalupo has undertaken this challenge, probably
the biggest of his career and if he rises to the occasion and pulls it off then it will be
placed beside the rest of McDonald’s big hits.
46
Chapter 9: Conclusions
9.0
Final Address
When I began my dissertation my objective was to understand why so many groups
and organisations are against McDonald's. As I started researching globalisation for
the literature review I got lost in the vast amount of publications on the subject and so
I chose to give an understanding of the development of globalisation and antiglobalisation.
I chose McDonald's as the case study as I felt it was an excellent example of a
globalised corporation one which receives a lot of attention form the anti-globalisation
movements.
By following Held and McGrew’s characterisation of globalisation, I dealt with each
of the propositions separately as I felt that this gave a wider understanding to both
sides o f the argument and that is the aim of this dissertation; to give an understanding
o f globalisation and anti-globalisation by using McDonald's as the example.
Communication:
The latest and most effective mass-communication medium is currently the internet.
The McLibel trial of McDonald's against Helen Steel and Dave Morris was the longest
ever libel trial in British history and even though the judge ruled in favour with
McDonald's, the defendants had proved some controversial allegations to be true. The
trial has long ended but it is the internet that keeps the organisation alive and strong in
support. The internet permits the global spread of information that without the internet
wouldn’t be possible. From this the author concludes that the internet, as a
communication tool, has strengthened the McLibel actions through the website
McSpotlight.
Money and Markets:
McDonald’s has had some bad financial times of late and with a change in CEO and a
new strategy McDonald's is hoping that its focus on its quality of food and service will
turn the tide and change things for the better. McDonald's current situation is an
adjustment for over-expansion and doesn’t spell the end of its reign as king of the fast-
47
food industry. It must be noted that this can only be taken as speculative as one must
wait and see the repercussions of the. change in the future.
Culture:
McDonald's is linked to the continual cultural imperialism of America. Many groups
are against McDonald's because they believe that it is destroying local cultures and
promoting the idea of a single global culture. Jose Bove is one of the most
recognisable leaders of an anti-McDonald’s group that focus on culture and he is
gaining more and more support throughout the world. McDonald's main role in
Americanisation is a cultural one and one in which anti-McDonald’s activists are
growing in protest against.
Consciousness:
With the production if McDonald's first ever social responsibility report, McDonald's
aims to increase the awareness and consciousness of its social responsibility.
Numerous groups have criticised the report, from trade unionists to environmentalists
and farmers to a founder of an organisation that it in collaboration with McDonald's,
as they found numerous faults. It was concluded that little viability could be taken
from the report for numerous reasons as explained in chapter 8 although as social
reporting is still in its infancy, this has the possibility of changing over time.
Numerous organisations are opposed to McDonald's for very different reasons, their
beliefs and ideas are unrelated but one thing they do have in common is their feeling
of antagonism towards McDonald’s. Even though demonstrations and protests have
not been as frequent of late, the opposition to McDonald’s is still alive and as along as
McDonald's keeps its doors open the opposition will continue.
48
BIBLIOGRAPHY
Books
❖ Brannick, Teresa and Roche, W.K. (1997) Business Research MethodsStrategies, Techniques and Sources, Dublin: Oak Tree Press.
❖ Ellwood, W (2001) The No Nonsense Guide to Globalization, Oxford: New
Internationalist Publications.
❖ Giddens, A (2001) Sociology, Cambridge: Polity Press.
♦♦♦ Klein, N (2000) No Logo, Canada: HarperCollinsPu6//.s,/iers.
♦> Powey, J and Watts, M (1987) Interviewing in Educational Research, London:
Routledge.
❖ Robertson, R (1992) Globalization, London: Sage.
♦♦♦ Saunders, Dr. M., Lewis, P. and Thornhill, Dr. A. (1997) Research Methods
fo r Business Students, London: Pitman Publishing.
❖ Schlosser, E (2001) Fast Food Nation, London: Penguin Group.
♦♦♦ Scholte, J.A (2000) Globalisation a critical introduction Palgrave Hampshire.
❖ Waters, M (2000) Globalisation, 2nd Edition, Routledge, London.
❖ Wurm, S. A (1996) Atlas o f the World’s Languages in Danger o f Disappearing
Paris, UNESCO.
❖ Yin, R.K (1993) Applications o f Case Study Research, California: Sage
Publications Ltd.
49
Websites
❖ www.globalpolicv.org
❖ www.mcspotlight.org
❖ www.politv.co.uk/global
❖ www.mcdonalds.com
❖ www.mbcnet.org
Articles
❖ Anti
❖ David, G (2003) Can McDonald’s Cook Again? Fortunes 500 Magazine, 14th
April.
❖ Rush, D (2003) McDonald's Seek Fallen Arches Remedy The Sunday Times,
6th April.
Web Articles
❖ Anti-Globalisation-a spreading phenomenon (08/2000) [Internet] Available
from: www.csis-scrs.gc.ca
❖ Cohen, D (2002) McDonald(s feeds appetite fo r social responsibility [Internet]
Available from: http://www.planetark.org
♦♦♦ Hawken, P (25/04/2002) McDonald's and Corporate Social Responsibility?
[Internet] Available from:
http://www.foodfirst.org/media/press/2002/mcdresponsibilitv.html
❖ Lane, M. J (06/05/2002) Companies Are Waking Up To Social Consciousness
[Internet] Available from:
htttp://www.marcilane,com/article/wakingup0502.html
❖ Lewis, M (2002) The Greening O f McDonald's [Internet]Available from
http://www.forbes.com/2Q02/04/15/0415mcdonalds.html
❖ Keller, A (2000) U.S Culture covers World [Internet] Available from
http://dailvbeacon.utk.edu/article.php/1008
❖ Tai, K (01/11/1995) Golden arches stretch across the world [Internet]
Available from http://www.valedailvnews.com
50
JAppencCices
in
Appendix 1
PR Weekly’s Top 20 most effective public relations 'consumer facing’ campaigns of
all time:
1. The Labour Party since the mid-1990’s.
2. Sir Richard Branson.
3. The opening of Tate Modem in London.
4. Oxfam.
5. Malcolm McLaren, the brains behind the Sex Pistols.
6. Coca Cola.
7. Greenpeace and its campaign against genetically modified food.
8. Calvin Klein.
9. The “McLibel” trial.
10. The revival of Perrier.
11. The wedding of two strangers brought together in 1999 by Birmingham radio
station BRMB.
12. The “Brylcreem Boy” competition.
13. The “Ted Sid” campaign for British Gas privatisation in the 1980s.
14. The campaign to cancel the developing world’s debt.
15. The women’s suffragette movement.
16. The “Labour Isn’t Working” campaign by the Conservative Party.
17. The Rubic Cube.
18. The “Hello Boys” campaign for the Wonderbra featuring Eva Herzigova.
19* The launch of Sony’s Playstation 2 in the UK.
20. Trivial Pursuit.
52
Appendix 2
McDonald's Reports Global Results For 2002 (www.mcdonalds.com)
Key highlights - Consolidated
Dollars in millions, except per common share
data
(Decrease)
Percent
Increase/
As
Constant
Quarters ended December 31
2002
Currency*
Systemwide sales**
$10,489.5
2001
Reported
$10, 112.7
4
3 . 771.5
3
(203.4)
482 . 7
n/m
(343.8)
271. 9
n/m
(0.27)
0.21
n/m
$4 0 , 6 3 0 . 4
2
2
Revenues
3,899.2
2
Operating income (loss)
n/m
Net income (loss)
n/m
Net income (loss) per
common share diluted
n/m
Years ended December 31
Systemwide sales
$41,526.0
2
Revenues
15,405.7
4
Operating income
2,112.9
(25)
Income before cumulative
effect of accounting change
992.1
(42)
Cumulative effect of
accounting change,
net of tax
(98.6)
n/m
Net income
893.5
(48)
Per common share-diluted:
Income before cumulative
effect of accounting change
.77
(41)
Cumulative effect of
accounting change
(0.07)
.n/m
Net income
.70
(47)
14, 870.0
i
4
2 , 6 9 7 .0
(2 2 )
1 . 636.6
(39)
n/m
1,636 .6
(45)
1.25
(38)
n/m
1.25
(44)
* Information in constant currencies.excludes the effect of
foreign currency translation on reported results, except for
hyperinflationary economies, whose functional currency is the
U.S.
Dollar.
Constant currency results are calculated by translating
the
current year results at prior year monthly average exchange
rates.
** Systemwide sales include sales by all Brand McDonald's and
Partner
53
Brand restaurants, whether operated by the Company, by
franchisees
or by affiliates operating under joint-venture agreements,
n/m Not m e a n i n g f u l .
54
Appendix 3
The .Semi-Structured Interview
■ Describe a bit about your life and work in McDonald's.
■ What did your job entail?
,
■ When the outcome of the famous McLibel trial case in England, involving
Helen Steel and Dave Morris, was announced what was your reaction?
■ Is this the beginning o f the end or merely an adjustment for over expansion?
■ Does McDonald's force itself or Americanisation on other countries or does it
adapt to the different cultures in little ways?
■ There is an ever increasing number of anti-McDonald’s demonstrations from
anti-globalisation organisation-why do they pick on McDonald's?
■ Do you think McDonald's was arrogant with the McLibel trial and the
defendants, Helen Steel and Dave Morris?
■ What is your opinion on the social responsibility report?
■ Do you think McDonald's can have one social responsibility report for the
whole world?
55