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Executive Summary

USA and McDonald's Corporation Culture

Emily Stokes

May 7, 2018

This report investigates and discusses the findings of national culture within the USA today and how that affects businesses and management practices operating within that culture. Along with this, the report analyses how McDonald's operates under the influence of American culture and how that functions effectively in an international environment.

The analysis draws attention to how the USA has a low context culture and operates under a low power distance score, but with an extreme level of individualism, which can be revealed through the findings of Hofstede and Hall. The scale of the dimensions and the scores that have been associated with the USA reveals clear hierarchy structures and clear communication as well as members taking responsibility for their own activities and actions. It has been evaluated within the report that national culture has a direct impact upon how a business operates and in order to be successful it is recommended that they take influence from how the country operates. Through both national, and organisational culture it has been communicated that McDonald's are able to operate efficiently in their place of origin along with, on a global scale as they adapt to suit the needs and wants of various cultures, whilst still being able to endorse their original aim.

McDonald's is one of many fast food chains to grow into global markets. The report evaluates their organisational culture and concludes that many elements have stemmed from the national culture of the USA helping them to achieve a larger market. It is recommended that McDonald's develop new ways to communicate with international cultures and adapt new forms of working to accommodate for differences in national culture.

1. McDonald's Corporation and USA – Introduction

Within this report there will be analysis and discussion towards national culture within the USA along with its influences upon McDonalds Corporation – where this company originated from. The report will investigate how national culture affects the management and business practices and will look to identify the effectiveness of this firm in an international context. Worldwide, McDonald's is a largely popular organisation attracting consumers from different backgrounds and cultures. McDonald's (2018), first opened to the public in 1955 in the USA, and soon became a success with owner Ray Kroc looking to own and run a franchise. The company started off small producing only a limited menu, however, within three years they had sold its “100 millionth hamburger.” Globally, McDonald's is easily recognised and expanded quickly and adapted to different culture which is evident through the company now having over “36,000 restaurants open across 100 different nations.” McDonald's (2018).

2. National Culture within the USA

This section of the report will take a focus upon national culture within the USA and how it can be explored using various different methods and techniques. The main exploration methods are using models by; Hofstede, Hall and Lewis.

2.1 Hofstede – USA

Hofstede (2018) defines culture as "the collective programming of the mind that distinguishes the members of one group or category of people from others". Hofstede's Six Dimension Model analyses different aspects of culture; power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. Hofstede suggested that each country has different ways of living and that, each have varied ways on dealing with specific dimensions, determining how each of them behave in different scenarios. Different dimensions come with a varied importance towards the US – two key elements that are looked at are power distance, and individualism versus collectivism.

Dimension Score High Low

Power Distance 40 •

Individualism vs Collectivism 91 •

Uncertainty Avoidance 46

Masculinity vs Femininity 62 •

Long term vs Short Term Orientation 26 •

Indulgence vs Restraint 68 •

(Hofstede 2018)

2.1.1 Power Distance

 The first dimension looks at Power Distance which is defined as “the degree to which the less powerful members of society accept and expect that power is distributed unequally” (Hofstede 2018). This element analyses how a country accepts authority and specifically how American's handle any inequalities amongst one another. According to Hofstede, when looking at power distance within the USA they have a relatively low score of 40, although the score is low, it is still stable. This indicates that a sense of acceptance shows throughout American culture in regards to equality which, with regards to how organisations run within America, a hierarchy is developed for ease as it allows managers to know that they have more control over their employees. American culture allows communication to be directed to a more informal approach and encourages employees to be involved and participate during discussions within the work place (Cook 2012).  It is more common in the USA to have high levels of delegation within organisations which creates a healthy working environment for the employees as managers seek to further develop an employee's skills instead of trying to lower their skill level or make them feel de motivated. Managers are looking to develop a healthy working relationship and although the hierarchy is clear they encourage staff to be approachable so that nobody within the organisation feels discouraged.

2.1.2 Individualism vs Collectivism

Furthermore, Hofstede looks into the individualism or collectivism level within the USA. Hofstede (2018) defines it as being “the degree of interdependence a society maintains upon its members”

This segment within his research refers to the importance of social relationships. When investigating this, he found that they had an individualistic score of 91– which introduces the theory that Americans enjoy to work on their own, but also reflects how they behave out - with the workplace. Members within the USA tend to focus more on themselves rather than others which is highlighted within the extremely high score. The USA has one of the highest individualistic scores from Hofstede's research, this is due to how social relationships are not relied upon within a work environment, however, it is important in terms of independence and how they are encouraged to make their own decisions whilst still taking responsibility for their actions. Americans strive towards independence and working hard for what they want as they believe that the benefits and quality of life will be improved regardless of where they stand in society.

2.2 Hall

When investigating culture, Edward T Hall had a different approach. He instead created a culture map which identified formal, informal and technical aspects of culture within a specific country. He also introduced and focused his research upon the concept of high and low cultures, referring to how each country communicates with each other. Nguyen et al (2007) define the concept of culture in terms of Edward Hall as “The high-low context concept refers to the extent to which communication is carried by explicit, verbally expressed messages or is embedded in context in which the message is conveyed.” which highlights how different countries function and how the cultures can differ due to ways that they want to communicate.

Hall identified that the USA has a low context culture which is described by Williams (2018) as a country who relies on having a direct approach where only words are used, does not take in to consideration what kind of tone people speak in or how they are portraying their body language. Hall further investigated the country, looking specifically at; planning, organising, staffing, directing and controlling. Typically, low context cultures do identify as being an individualistic country, as has been found by Hofstede, as they thoroughly value personal space and having their own privacy within their personal lives.

Each member within the USA, typically has an honest approach when dealing with conflicts or confrontations, making it a culture where disagreements are sorted quickly, allowing problems to be dealt with in an upfront manner instead of there being any confusion through body language or tone of voice. Gorrill (2007) assumes that American's would not hesitate in stating that someone was wrong which reiterates the concept of American's being self-orientated and only concerned with what they do. American's enjoy being explicit with what they do or say and prefer to have brief communications rather than extortionate lengths of conversations.

3. USA's influence upon Business Practices

This section of the report focuses upon how national culture influences business and management practices. Typical American culture naturally has a great influence on business practices throughout the US, with specific traits being identified time and time again within the culture of an organisation. The values look to encourage employees to behave in a certain way, in line with what is normal for national culture.  When looking at the effect culture has on a business, Hofstede analyses each of his dimensions further to determine what suits the organisation, and this section identifies how business practices adapt and conform to what is required from operating in the USA.

Hofstede (2018) identifies the USA as being an individualistic country - with a score of 91 - promoting that American's thrive off of being independent as they believe it to be better than having to rely on somebody else. The power distance within the USA reveals it as being low, in comparison to individualism with a score of only 40. The power distance score suggests that a hierarchy may not be necessarily required within the structure of the organisation, however, through having a high score within the individualism element, it is presumed that many organisations within the USA will, and should adapt a hierarchical structure, which is to ensure that everyone within the organisation is ranked according to their specific roles (Gorrill, 2007). Many organisations do adapt to having a clear and organised structure within their workplace as it allows any negotiations to be made efficiently and in line with what is needed within the business. It is important to ensure that managers play a key role within organisations due to the cultural dimension being so high and it is encouraged of them to have expert knowledge towards the business that they are working in.

An example of where USA culture has influenced an American company is to look specifically at McDonalds Corporation and how they have been influenced by this. As identified by Thompson (2017), they have a global hierarchy in place across the entirety of the company. This structure allows McDonald's to operate more efficiently and as the hierarchy is widespread, it suggests that all decisions and activities keep in line with what is expected of the organisation as a whole. Along with the global hierarchy, Thompson (2017) states that there are also performance-based divisions directed to each individual branch - whether that is a franchise or owned by the company of McDonalds - where the less critical decisions can be made at a lower level through managers, whilst still looking towards the importance of their employees to ensure that their opinions are taken into consideration.

Operating in the USA where there is an extreme level of individualism, it is expected that all decisions are made through the employee and that deadlines should be met promptly. Gorrill (2017) highlights that all employees working in the USA realistically should be able to work efficiently on their own and that managers should only be involved where needed. This shows how within certain business practices it is expected of employees to take initiative and perform to the best of their ability allowing themselves to achieve a greater sense of value. This reiterates how large an influence individualism has within business and management practices. This also ties into the factor introduced from Hall, stating that the USA is a low context culture, therefore managers take the role of being affirmative, instead of being laid back in the workplace.

4. Effectiveness of McDonald's Corporation

The final section of the report, investigates how effectively McDonald's operates within a global context. It relies on their approach towards; Leadership, Communication, Team working and diversity management. As McDonald's originated in the USA, a country that provides an ideal comparison of culture is India as both of these countries have different ways in which they feel are the best to operate efficiently. However, they do share similarities and so it shows that McDonald's can adapt to suit the needs of the country, whilst still trying to operate under their company's culture, which is a difficult task to undertake.

4.1 Leadership

There is a defined leadership team at the head of McDonald's corporation who undertake all responsibilities and management over the company as a whole. McDonald's leadership team considers any boundaries that may arise from an international location and so they need to plan strategically to accommodate for differences in, for example, employee backgrounds or cultural differences. In a SWOT analysis undertaken by (McDonald's Corporation, 2017), an opportunity for the company is the growing need for fast food in Asian markets. This opportunity allows for development within the company meaning they can introduce their ideals into an international field allowing them to shape the company's future in line with what is expected of them. They can work in a global mind set and integrate fully into the culture whilst adapting the company to learn about the culture.

4.2 Communication

Communicating is a key element within McDonald's company culture. Through operating within the USA, they have adapted a low-context style of communicating where it is very exact and explicit through words only. India however, operates under a high context culture, where they need reassurance on what the message is and they look for signs within the body language as well as words. The cultural approach adapted from the USA inhibits McDonald's to succeed fully in India in terms of communication within hierarchies. However, in 2012 McDonald's looked to communicate more with their customers and adapted their communication strategy to focus upon the changing lifestyles across the globe which included all forms of communication from papers to discussions on how to best illustrate newly introduced messages from within the company (Dixit, 2017). This change in the way they interact with customers supports McDonald's working internationally, as it allows cultures to see receive messages in a way that best outlines them, and allows them to see the impact their changes will have within their culture.

4.3 Team – Working

Team work plays an important role in the organisation, with Thompson (2017) describing McDonald's organisational culture to that of being supportive of the goals that the company has in order to succeed and to be in the position to fully maximise their customer base to become market leaders.  McDonald's work to ensure that everyone is valued within their company and aim to promote their training programs for everyone within their brand, in order to provide support and help people in to reaching their full potential (McDonalds, 2018). This commitment provides a clear structure from McDonald's, as it shows how they are looking to develop their team's skills overall to provide the same experience throughout the brand as a whole. Working in India where their ranking on Hofstede's individualism scale is only 48 means they don't mind working in close proximity to others, and they enjoy sharing the experience with other people, without taking all of the responsibility for themselves. This makes McDonald's an ideal organisation to operate in this country as it suits the cultural approach and ensures that their employees are looked after.

4.4 Diversity – Management

McDonald's offer a standardised menu throughout all of their franchises and restaurants, allowing customers to receive a set standard of food and beverages. Through adopting this approach, it has meant that as a company they only offer a specific range which may not accommodate to the needs of countries worldwide which could inhibit their ability to operate effectively. When opening their restaurants in India, McDonald's would not have been able to operate effectively and so they decided that the menu would be developed locally, with food being sourced to suit the requirements of the culture (McDonalds India, 2018). This has allowed vegetarian options to be available to the Indian market. This has shown the diversity that comes from their company culture and how their approach is to suit the needs of specific countries across the globe whilst still continuing with McDonald's overall vision of the company.

5. Conclusions and Recommendations

To conclude, national culture within the USA is that of a mixture between both high and low scores from Hofstede's and Edward Hall's research. It is evident that through various sources of research the USA provides a stable and efficient environment for an organisation, along with clear evidence that national culture has a direct correlation towards company culture.

The various characteristics that come from the USA relate directly to how business and management practices operate, clearly revealing that hierarchical structures work best for the environment that they operate in and to provide the best sort of working relationship for employees. It is recommended that McDonald's continues to operate both in the USA and internationally, however, in order to succeed internationally and reach full potential then the company needs to ensure adequate resources are available to adapt diversely and communicate directly within cultures of a different context.

The changes that McDonald's corporation makes in terms of leadership and communication will have a direct benefit globally for the company. This will ensure that the company culture meets what is said of national culture, so it is recommended that they continue to expand in to new markets and continue to adapt new ways of communicating with the market as a whole.

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