Organizational Structure And Business Strategies Of McDonald In Malaysia

Incorporation of Cultural Values

McDonald incorporates the different cultures within its product line when they intend to enter a market. The strategy was very similar as well when it entered Malaysia. Approximately around 61.3% of the entire population in Malaysia is practicing Islam (Swee-Hock 2015). Muslims are very strict with their food choices, which is the one reason they prefer to have halal foods largely (Ambali and Bakar 2014). McDonald has specifically targeted the Muslims and has included halal foods in its menu (Mcdonalds.com.my 2017). This is one of the examples of cultural values that McDonald adds to its menu. The main purpose of this assignment is to analyze the organizational structure that exists in Malaysia. Additionally, this also discusses the business strategies of McDonald in Malaysia.

The company currently has approximately around 200 franchises in Malaysia. The company has so far created an approximate around 7000 jobs in the country (Yunus et al. 2013). This is indeed a very huge expansion.

Justification

Such a huge expansion of McDonald can be judged from the fast food trends in the country. Approximately around 98% of Malaysian adults love to have meals at take-away restaurants. The figure is even bigger to what it is in the United States. Even the state of health does not affect this figure. The fast-food market size is on an increase year after year (Yunus et al. 2013).

McDonald has used several factors to identify its target customer in Malaysia. The company has targeted the dual income families in Malaysia. Dual income families do not get time to prepare their food, which is why they need to rely on external resources. The company has designed its menu in such a way that the menu is suitable for both the upper-middle class and the lower class consumers. They have brought variations in their offerings, which is suitable to the different kinds of families. Additionally, the company has shown its relevance to the cultures as well. They have introduced halal foods in their menu, which is suitable to the largest population in Malaysia the Muslims (Bohari, Hin and Fuad 2017).

The theory will help to analyze the strategy chosen by McDonald in Malaysia. According to the Ansoff Matrix, companies follow the four strategies depicted in the matrix to enter in a new market. McDonald has used “product development” and “diversification” to enter the Malaysian fast-food market. The introduction of halal food in its menu is one of the examples of “product development”. The initiation of McDelivery is the example of “diversification”. This is so because the Malaysian customers largely belong to dual income families. They do not have time to prepare their food. They are required to rely on such option as offered by McDonald in Malaysia (Rezai, Mohamed and Shamsudin 2012).

Target Customers and Expansion

The use of technology is very well evident in initiating the McDelivery service in Malaysia. Customers can book their food online to avail their required orders. The company has a very efficient after the service supports for the customers. The service is supported by call centre branches (Yunus et al. 2013).

The number of internet users is on an increase year after year. The incrementing use of internet validates the investments made by McDonald on McDelivery service. Providing the online booking facility is another example of appropriateness (Abedalaziz, Jamaluddin and Chin 2013).

There are few important issues that are familiar with the fast-food industry. Packaging is one of issues, which is responsible for Styrofoam a common food waste. Fast-food wastages and packages are responsible for CO2 emissions, which has become a much talked topic in nowadays. Food delivery involves logistics, which is a very good contributor of CO2 emissions (One Green Planet 2017).

Justification

McDonald is one of very few companies that are focused on supporting the environment by minimizing its contribution in polluting the environment. The company uses indeed a very effective recycling strategy to help in conserving the energy. They have been able to eliminate numerous million pounds of packaging (Shen and Xiao 2014). However, the use of delivery system can never be ignored in terms of its contribution in polluting the environment. Transportation is probably the biggest contributors in polluting the environment. The greenhouse gas emission is so severe that different automotive companies have now considered the effectiveness of Electric Vehicles (EVs) (Hawkins et al. 2013).

Shared assumptions

The different organizational cultures make a lot of difference in the overall output of the operation. There are examples of organizations that are successful because of their rare organizational culture. Shared assumptions can be defined as a unity of different assumptions. This is widely expected especially in global operations (Hogan and Coote 2014). McDonald is one of those organizations that have successfully utilized the shared assumptions to enter the several new markets. They have introduced halal food in their menu for the Malaysian people. They have avoided the use of beef for entering the Indian market. The organizational culture has helped it dominate despite the sheer competition from its biggest rivals such as KFC.

Example

They have tried to capture the attraction of a larger population in Malaysia by adding halal foods in its menu. The largest population in Malaysia is of Muslims. McDonald has touched the core feeling of Muslims by introducing the halal food. They have provided no-beef food to the Indian people. This is because of the ritual values that are attached with the beef. The shared assumptions in McDonald help them to unite at the global level and then they introduce something that is relevant to the target cultures yet retaining the trademark values of McDonald (Shen and Xiao 2014).

Use of Technology

Cultural values

Cultural values are essential elements for global operation. Organization those that understand the cultures of different geographical place are more successful (Hogan and Coote 2014). McDonald is one of those companies that scores high in identifying the different cultures that exist in the different parts of world. This is one such factor that has contributed in the success of McDonald.

Example

Offering halal food to the Malaysian people and no-beef food to the Indian people are some of the examples that show how smarter McDonald is in reading the cultural values of different geographic. Additionally, offering McDelivery service to the Malaysian people is another example of their cultural understanding. This was indeed a solution for the numerous dual income families in Malaysia as they have very less or no time to prepare their food on their own (Shen and Xiao 2014).

Shared behaviors

Shared behaviors are another very important element of the organizational behavior. It helps to move towards a shared mission. This is indeed very important to attain the set organizational objectives (Hogan and Coote 2014). McDonald is one of those very few companies where values are shared within the organization.

Example

This is widely evident in the cultural performances of the company in its different geographical places. The company is known to have touched the core feeling of culture in regards to the different cultures in the different markets across the globe. The large numbers of outlets have produced ample of jobs opportunities at the different target market. This just show how capable is McDonald with its shared behaviors (Shen and Xiao 2014).

Cultural symbols

This is one of the core parts of organizational culture that plays a very vital role during the global operations (Hogan and Coote 2014). McDonald is a very rare company in this regard. They have used different symbols at the six different places to relate themselves with the target place culture.

Example

They introduced McAloo Tikki in India. This was a move to support the cultural beliefs of Hindu community in India. They are the largest population in India and hence, the company has diligently used its ideas to touch the core aspect of cultural values. To the Malaysian people, the company introduced the Double Prosperity Burger, which is to touch the core feeling of Muslims community in Malaysia. There are several other examples such as McMolletes to Mexican people and Nos Macarons to the French (Shen and Xiao 2014).

Environmental Concerns

McDonald uses the four different kinds of organizational culture such as people-centric, organizational learning, individual learning and diversity & insertion. The strategy has helped the company to have a large number of chains across the globe. However, the strategies have helped them at some point or vice-versa. It has been successful in relating this with the different cultures at the different geographical place. However, they have failed in executing excellence in their service at some point of time. For example, they are less successful than KFC in China. Additionally, the McAloo Tikki in India did not receive a very wide reception. These few examples just prove that McDonald needs to capitalize on the opportunity provided by its failure only (Hanratty et al. 2012).

Conclusion

McDonald targets the cultural values of the market that it intends to enter. The use of McAloo Tikki in India and inclusion of halal food in menu are the few examples of such strategy. The company uses different cultural symbols for different geographic locations. They have been different with the cultural symbols in the Western countries and in the Asian region. However, the company has struggled in proving their cultural stand. McDonald in China is way behind to its rival company KFC. The introduction of McAloo Tikki to attract the vegetarian customers had generated a very few response in India. There is a need to bring the excellence in operations as well. This will help to justify their cultural stand through their operations as well.

References

Abedalaziz, N., Jamaluddin, S. and Chin, H.L., 2013. Measuring attitudes toward computer and internet usage among postgraduate students in Malaysia. TOJET: The Turkish Online Journal of Educational Technology, 12(2).

Ambali, A.R. and Bakar, A.N., 2014. People's Awareness on Halal Foods and Products: Potential Issues for Policy-makers. Procedia-Social and Behavioral Sciences, 121, pp.3-25.

Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).

Hanratty, B., Milton, B., Ashton, M. and Whitehead, M., 2012. ‘McDonalds and KFC, it's never going to happen’: the challenges of working with food outlets to tackle the obesogenic environment. Journal of Public Health, 34(4), pp.548-554.

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Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model. Journal of Business Research, 67(8), pp.1609-1621.

Kipley, D., Lewis, A.O. and Jeng, J.L., 2012. Extending Ansoff’s Strategic Diagnosis Model: Defining the Optimal Strategic Performance Positioning Matrix. SAGE Open, 2(1), p.2158244011435135.

Mcdonalds.com.my. 2017. I'm lovin' it! McDonald's® Malaysia |. [online] Available at: https://www.mcdonalds.com.my/ [Accessed 6 Dec. 2017].

One Green Planet. 2017. 10 Ways Fast Food is Destroying the World. [online] Available at: https://www.onegreenplanet.org/animalsandnature/10-ways-fast-food-is-destroying-the-world/ [Accessed 6 Dec. 2017].

Rezai, G., Mohamed, Z. and Shamsudin, M.N., 2012. Assessment of consumers’ confidence on halal labelled manufactured food in Malaysia. Pertanika Journal of Social Science & Humanity, 20(1), pp.33-42.

Shen, Q. and Xiao, P., 2014. McDonald's and KFC in China: Competitors or Companions?. Marketing Science, 33(2), pp.287-307.

Swee-Hock, S., 2015. The population of Malaysia (Vol. 514). Institute of Southeast Asian Studies.

Yunus, N.K.Y., Zulkeflee, M., Razak, A. and Ilias, A., 2013. Expectation towards McDonald's Malaysia: A Study on Service Quality.