A Case Report On Mcdonalds In New Zealand Business Essay Example

their success due to significant trends and activities. The first question focuses on conducting an environmental analysis using Pestle.

Question 1. Environmental Analysis using Pestle

Political Factors

McDonald's global operations are greatly affected by the governmental policies implemented in each country. In Europe and the United States, few individuals pay attention to government actions regarding the health risks associated with fast food consumption.

The fast food industry is linked to negative effects such as high cholesterol and obesity. Across different states, there are diverse regulations and operations in place to manage this industry. Worker well-being, safety and security, and environmental concerns are among the specific areas of focus in various markets. These factors are all apparent in the government's regulation of fast food licensing within specific states.

If, for example, a discrepancy has occurred in the McDonald's franchise in India where the usage of a certain meat (beef) in their establishments in India is considered offensive according to the Hindu faith, there are also other studies that point to McDonald's violation of employment laws in the targeted markets. Similar to any business venture, these McDonald's shops have to compete with employment policy issues and taxation responsibilities in order to succeed in the overseas market (Abhijeet, 2010). New Zealand's political system is strong and its comparative characterization system provides equal opportunities for both males and females. The country's governance indicators are excellent, with a 96.7 percentile ranking on the voice and accountability parameter in 2010.

Economic Factors

The fast food companies are not exempt from any disparities. They do have their own individual concern regarding economic factors. Stores and franchises of fast food restaurants like McDonald's find it

extremely difficult when the economy of the individual states is affected by price increases and changes in the exchange rates. The consumers therefore are faced with a situation of exceeding their budgets to decide whether to spend more in these foreign fast food restaurants.

The economic environment presents challenges for fast food establishments due to changes in land regulations and customer response, which impact sales. For instance, McDonald's and other major food chains often import a significant amount of ingredients to a country experiencing supply shortages. Fluctuations in exchange rates are likely to significantly affect the company's operations (Abhijeet, 2010).

In order for McDonald's international operations to be successful, it is crucial that the company focuses more on their microenvironment rather than solely depending on global supply and exchange rates. Additionally, McDonald's should consider the current tax policies in the countries where they operate as this helps ensure the smooth functioning of franchises.

Similarly, the company must also take into account the economic situation of the state where they are doing business. The growth rate of that specific state's economy will impact its residents' purchasing power. Consequently, if a franchise operates in an economically disadvantaged state, their products will be pricier compared to other alternatives available. Hence, these franchises need to make necessary adaptations to maintain their economies of scale (Abhijeet, 2010). Moreover, New Zealand's banking sector is strong and has acted as a safeguard against the European debt crisis.

As of November 2011, there were 21 registered Banks in the state.

Socio - Cultural Factors

The company continues to establish a positive approach from their main consumers. McDonald's caters to a specific variety of consumers with distinct

personalities. It is a fact that the company has provided markets like the United Kingdom with a choice for their dining needs. McDonald's has wisely introduced a menu that offers a reliable standard of quality for the particular market it operates in. Additionally, it targets the younger crowd, specifically those under 35, who are believed to be the majority of McDonald's loyal customers.

McDonald's effectively utilizes market research to understand the needs of the industry and improve their chances of success. By analyzing detailed data, they take advantage of concepts like consumer behavior and product quality. Ultimately, this approach influences McDonald's potential in specific markets (Abhijeet, 2010). Additionally, it is worth noting that New Zealand has a thriving business environment.

According to the Wall Street Journal's 2011 Index of Economic Freedom, New Zealand ranks 4th in terms of its economic system. In the Asia-Pacific region, it holds the same position among 41 countries. The World Bank's Doing Business 2012 rankings also rank New Zealand at 3rd place. Starting a business in New Zealand is considered straightforward as it only requires one procedure and can be completed within a day, according to Doing Business 2012.

Technological Factors

McDonald's generates consumer demand for its individual products through various methods, including television commercials. The company also excels at capturing the attention of younger customers, employing recreational activities at its locations and offering toys with meals to attract children. These promotional tactics are evident in their advertisements.

McDonald's utilizes recognizable characters such as Grimace and Hamburglar. The company also employs celebrities for product promotion. Additionally, McDonald's regularly implements new technology into their operations. This includes an efficient inventory system

and value chain management, which simplifies payments for suppliers and other vendors. Furthermore, individual stores in different markets handle these processes.

The implementation of engineering in the operations of McDonald's adds value to their products. This can be seen in the advancements made in their value chain. The development of the inventory system, along with their supply chain, allows them to operate on a global scale (Abhijeet, 2010).

Legal Factors

As McDonald's is a certified fast food establishment, they must adhere to numerous regulations and policies. One such requirement is obtaining Halal certification, which is of concern to the Muslim community. McDonald's must ensure the integrity and consumer confidence by following all stated materials and processes.

The concern proprietor must comply with legal requirements, such as operating hours, concern enrollment, revenue enhancement demand, labour and employment Torahs, and quality and environment enfranchisement (such as ISO) certification. Violators of these requirements may face fines or have their concern banned from operating, which can have devastating consequences (Abhijeet, 2010). McDonald's New Zealand operation appears to have some flexibility in HRM and labour dealingss policies and practices.

Environmental Factors

As the world's major consumer of beef, potatoes, and chicken, McDonald's has faced criticism from conservationists. Vegetarian environmentalists have accused the fast-food leader of animal cruelty. McDonald's desire to use giants in their burgers has sparked controversy, particularly because giants are considered endangered species.

McDonald's faced criticism for their lack of environmental consciousness before they switched to using paper packaging. They previously used wrappers made from polystyrene, which posed challenges in terms of recycling. The use of such packaging by fast food restaurants contributes to negative impacts on both the environment and humanity due to difficulties

in disposal. With increasing global concerns about environmental issues, businesses need to go beyond profit-making and consider responsible utilization of resources for future sustainability. Prioritizing the well-being of people and advocating for a healthy lifestyle for future generations is crucial (Anonymous, 2008). The issue of obesity is escalating as a health risk in advanced and developing countries alike.

The World Health Organisation refers to high calorie consumption as the "planetary epidemic." This issue also affects New Zealand (Loureiro, 2006).

Decision for Environmental scan

New Zealand is globally recognized for its strict values and excellent quality of products and manufacturing process. It is renowned for its innovative research and knowledge in rural development. The country leads in addressing sustainability issues and the environmental impact on natural and food resources. Many other countries seek and implement New Zealand's expertise. Different competitive strategies require different Human Resource strategies to execute them. Acquiring, training, and retaining talented individuals are crucial for creating organizational capability and intellectual capital that drives business strategy execution.

Different organizations employ various strategies to manage their workforce. They believe that innovation, quality, and cost are the three main factors for achieving a competitive advantage. Strategies relating to quality and innovation are typically associated with a dedicated workforce. However, for companies prioritizing cost, control is likely to be a more significant factor than commitment. Though a certain level of agreement is always required, control is a top priority at McDonald's.

Control at McDonald's is achieved not only through direct supervision, machines, the restaurant's physical design, and a detailed set of rules and regulations, but also through recruitment, job design, Human Resource Planning (HRP), compensation, training, job evaluation, performance evaluation, and termination.

Unskilled workers have the ability to disrupt the operation by withdrawing support from the production process or leaving the company. While workers may be subject to employer power, they still maintain a strong interest in exerting their labor power. Staff and management are interdependent; coercion and strict compliance alone cannot achieve high performance. The organization must obtain employee approval and foster teamwork.

According to "Human Resource Management at McDonald's" (2009), employers have more control over workers' personalities and values when their efforts are acquired through a complex system of regulations, which includes rules regarding evidence for publicity and penalty, compared to acquiring their efforts through direct persuasion or coercion or through equipment design.

Question 2. Strategic Human Resource Management

Excellent management is not limited to just an organization. Effectively managing administration stems from the determination to perform tasks correctly. It involves genuinely caring about the well-being of the team you collaborate with.

The importance of inclusiveness in a company is vital for both employees and non-employees. Human Resource Management (HRM) is crucial in businesses, and Strategic Human Resource Management (SHRM) is a strategic method that aligns human resources with the company's strategy. The objective of SHRM is to direct human resources towards organizational goals and objectives by implementing various actions and functions.

Strategic Human Resource Management involves implementing the organization's HRM activities strategically and systematically to achieve strategic goals. It includes job design, compensation, HR Planning, recruitment, performance evaluation, training, and termination (Qasemi, 2009).

Figure 1 shows the HRM System with twelve crucial elements of HRM (Qasemi, 2009). Figure 2 illustrates the stages of Strategic Human Resource Management.

The primary objective of Strategic Human Resource Management is Strategic Human Resource Planning. It

aims to align strategic requirements with the workforce in both short and long terms.

Strategic Human Resource Planning involves anticipating future human resource needs and finding long-term solutions. It includes predicting future HR needs, assessing the current supply of HR, analyzing supply and demand, and developing strategies for stability. These strategies leverage environmental opportunities, threats, organizational strengths, and weaknesses to gain a competitive advantage. In essence, Strategic Human Resource Planning helps manage companies in various situations.

Strategic Human Resource Planning involves tactics that are determined by studying the company's strategic plans, examining both internal and external environments, and considering the limitations, opportunities, and strategic goals of the Human Resources department. Each company has its unique approach to Strategic Human Resource Planning. The following model outlines five phases in developing a Human Resource strategy: Strategic direction, Human Resource Management system, Workforce planning, Generating necessary Human Resources, Investing in HR development and performance, and Evaluating and supporting the organization's competency and performance. This model emphasizes the importance of strategic integration and commitment from top management for successful Human Resource Management (Qasemi, 2009).

As the universe progresses technologically, administrations are incorporating new IT systems to enhance competency and effectivity. In light of this, Human Resource directors must consider if and how technology adoption can support their organization's management of people (Hartel, A & A Fujimoto, 2010).

Competitive Advantage

In order for businesses to fully grasp the nature of competition they encounter, it is crucial for them to accurately identify their market. This entails recognizing a wide array of competitors. For instance, McDonald's faces thousands of competitors, all vying for a share of the market.

McDonald's understands that it faces competition not only from

other large burger and chicken chains, but also from independently owned fish and chips shops and other dine-in or take-out establishments. Therefore, McDonald's must develop competitive strategies that set it apart from its competitors. All companies must stay connected to their business environment to ensure that their actions align with customer expectations. These expectations change over time. Additionally, the IEO market in which McDonald's operates is becoming more competitive, as shown in the chart below ( "Staying ahead in a competitive environment", 2012).

Global HR for Competitive Advantage

Global companies face a situation in which social, economic, and political issues are interconnected, and major business decisions cannot be made without considering these factors.

The decision-making process for foreign investments depends on the judgments made by companies regarding the potential social and political growth in the targeted country. Sometimes financial considerations support one direction, while political considerations point in another direction. Ultimately, international companies face various challenges due to uncertainty in the setting caused by the rapid pace of change and its inherent unpredictability. Previous strategies, developed during a period of relative stability, confidence, freedom, and transparency, cannot guarantee the continued presence of international companies in the current environment, let alone provide them with a lasting competitive advantage in the market. This also implies that the organizational structure, procedures, and policies should become increasingly flexible and compliant. The complexity of the setting should be reflected within the company itself.

Due to the demanding nature of the competitive environment, there is a need for more complex management strategies to support and enhance universal organizational capabilities. This presents a significant challenge, as the key elements required for success are closely tied to

individuals, their attitudes, and behavior. Consequently, the Human Resource function finds itself operating in a new and vital area of focus.

In New Zealand, the market is relatively small, and relying solely on local market analysis may not lead to sustained productivity. Therefore, local companies may expand globally if they possess unique products or services and view global markets as opportunities for continued growth. In some cases, companies become international players when they are new to the market or when local circumstances are unfavorable but may withdraw once local conditions improve.

Human Resource Management needs to apply their understanding and knowledge of global affairs to benefit the company during the process of expanding internationally. As businesses grow, they enter new markets and eventually become global entities. To be more proactive in strategy and business competition, companies can use the internet as a platform to connect globally to the digital financial system. The changing laws, advancing technologies, international requirements, and intense local competition have led to significant changes in New Zealand companies over the past decade.

The focus has shifted from cost-cutting to include value-add-on due to stakeholder disputes over quality and low-cost goods. In today's globalized world, very few companies can claim to be unaffected by competition, and this new development has undoubtedly highlighted the strategic importance of Human Resource management. Consequently, there are various arguments in favor of and against the skills required in a global company, where Human Resource Management faces challenges in an international organizational culture. Companies in New Zealand enjoy the freedom to distribute resources and share information without geographical limitations (Plessis, 2009).

Decisions

A company's talent strategy and business strategy form the foundation of

its HR strategy, which guides its staffing approach.

The organization's endowment doctrine is a reflection of its approach to employees. Its concern schemes are designed to utilize the resources and capabilities of its staff in ways that lead to the creation of greater value in comparison to its competitors. The ability to leverage the resources and capabilities that come from the talented individuals it can attract and keep is crucial for maintaining a competitive advantage. The organization's positioning in the market determines the necessary competitive advantage and staffing strategies required to acquire and retain the right talent.

The company's choice and implementation of its staffing strategy impact the number and types of individuals it hires, and thus its ability to maintain a competitive advantage and execute its business strategy (Qasemi, 2009). The following statements from McDonald's website caught my attention and seem like a promising beginning for McDonald's new hires. "Even presidents and CEOs of major corporations had to start somewhere. And for many of them, that start was a job at McDonald's. We are proud of the many people who chose to stay with us throughout their careers, building long-term success for themselves and their families." "We strive to recruit and retain the most talented and exceptional individuals."

And to make that, we've put together fringe benefits designed to make you smile - even before you pick up your payroll check. From flexible schedules and competitive rewards to management training and investment opportunities, our benefits let you know you're a valued part of our team.

Recommendations

Making engaging goals that are clearly linked to organizational strategies and objectives guides the strategic staffing process. Strategic staffing should result

in the organization being better able to execute its business strategy. Every organization has to use its resources as efficiently as it can. Continuous improvement in products, processes, and productivity is crucial to success.

Reasonable processes must be implemented for compliance, risk management, and accountability. However, customers base their purchasing decisions on how they perceive the value of what is offered to them, rather than on how convenient it is for the provider to deliver it. The satisfaction of customers comes from the discretionary behavior of employees at all levels of the organization, many of whom are far from the headquarters and its authority over compliance. HR should establish practices that facilitate both international procurement and local awareness.

The HR department needs to establish HR patterns that ensure consistency across different regions while also adapting to local conditions. It is important for companies to be transparent about their internal operations when they are subject to external scrutiny. HR professionals should ensure that value is created by promoting and identifying values.