Mcdonaldization

In 1939 brothers Maurice and Richard McDonald, who had tried (and failed) to open a retail store up to that moment, saw that the only business that was permanently profitable during the economic depression in the USA were hot dog stands. So, they’ve decided to open a roadside eatery selling fast food. It brought 40000$ of profit in the first year of operation.

Brothers undertook a comprehensive study of the business to find why it was doing so good and what could be done to boost their benefits. They decided to restructure their enterprise and to make a number of changes:

  • No more waiters. Customers had to come to the counter to make an order (“putting the customer to work”).
  • The number of items on the menu was reduced from 25 to 9.
  • Tableware was replaced with cardboard containers and cups, promoting takeaway sales.

One of the MacDonald’s suppliers was so fascinated with their eatery that he suggested to take over the franchise of its operation. This person, Ray Kroc, created the business model and went on to drive its extension from seven cafes in 1955 to more than 30,000 all over the world today.

The main feature of the McDonald’s business model is the distribution of generic products to market in large amounts. This has a number of aspects, which may be systematized under the next captions:

  • Productivity. Production of such items is usually cost not much, products delivered fast and they are efficient in their consumption of resources.
  • Calculability. The activity pays a lot of attention to assessments such as weight, size, waiting time and price. These are easy to handle and franchise.
  • Predictability. Customers can assuredly purchase any product from anywhere in the world without having a second thought. You can buy a Big Mac in Manchester or Beijing and have no fear of disappointment since you know exactly what you’ll get.
  • Control. Production concerns usage of the certain set of resources and a simple, prearranged chain of tasks. It makes the process of performance evaluation easier: just compare actual inputs with standard ones.

This is just a representation of traditional scientific management, developed by Henry Ford and Frederick Taylor. McDonaldization is a perpetuation of old ideas that have become obsolete in some business sectors. Though, the latest discussions about management accounting are about how shortening of the product life cycles, increasing product customization and growth of service element deprecates the standard cost concept.

Moreover, there are claims, that the traditional approach (based on static optimization) to performance evaluation using comparing actual and standard costs tends to evade certain thrusts of contemporary ideas like total quality management, value engineering and continuous improvement. The McDonald’s business model counters this theory.

US sociologist George Ritzer in 1993 published a book called The McDonaldization of Society, in which he used this term as derogatory and identifying the following negative aspects:

In 1939 brothers Maurice and Richard McDonald, who had tried (and failed) to open a retail store up to that moment, saw that the only business that was permanently profitable during the economic depression in the USA were hot dog stands. So, they’ve decided to open a roadside eatery selling fast food. It brought 40000$ of profit in the first year of operation.

Brothers undertook a comprehensive study of the business to find why it was doing so good and what could be done to boost their benefits. They decided to restructure their enterprise and to make a number of changes:

  • No more waiters. Customers had to come to the counter to make an order (“putting the customer to work”).

  • The number of items on the menu was reduced from 25 to 9.

  • Tableware was replaced with cardboard containers and cups, promoting takeaway sales.

One of the MacDonald’s suppliers was so fascinated with their eatery that he suggested to take over the franchise of its operation. This person, Ray Kroc, created the business model and went on to drive its extension from seven cafes in 1955 to more than 30,000 all over the world today.

The main feature of the McDonald’s business model is the distribution of generic products to market in large amounts. This has a number of aspects, which may be systematized under the next captions:

  • Productivity. Production of such items is usually cost not much, products delivered fast and they are efficient in their consumption of resources.

  • Calculability. The activity pays a lot of attention to assessments such as weight, size, waiting time and price. These are easy to handle and franchise.

  • Predictability. Customers can assuredly purchase any product from anywhere in the world without having a second thought. You can buy a Big Mac in Manchester or Beijing and have no fear of disappointment since you know exactly what you’ll get.

  • Control. Production concerns usage of the certain set of resources and a simple, prearranged chain of tasks. It makes the process of performance evaluation easier: just compare actual inputs with standard ones.

This is just a representation of traditional scientific management, developed by Henry Ford and Frederick Taylor. McDonaldization is a perpetuation of old ideas that have become obsolete in some business sectors. Though, the latest discussions about management accounting are about how shortening of the product life cycles, increasing product customization and growth of service element deprecates the standard cost concept.

Moreover, there are claims, that the traditional approach (based on static optimization) to performance evaluation using comparing actual and standard costs tends to evade certain thrusts of contemporary ideas like total quality management, value engineering and continuous improvement. The McDonald’s business model counters this theory.

US sociologist George Ritzer in 1993 published a book called The McDonaldization of Society, in which he used this term as derogatory and identifying the following negative aspects:

The fast food assured by McDonald’s isn’t actually that fast. Customers often have to stand in long queues to get their order and then they have to find an empty seat where they can eat. Though quantity and quality of the product may be predictable, the second one is never more than just fine. The use of disposable wrapping and cups externalises costs by forcing the community to pay for the collection and clearance of dumped packaging.

According to self-service policy, customers have to serve themselves and are frequently compelled to clear their own tables. They may also have to deal with food and packaging leftovers, which is also a part of exteriorization of expenses.

The standardisation and division of job give to the workers very little of challenge and responsibility. Communication with unskilled and low-paid employees does not improve the customer experience.

An abundant amount of McDonaldization’s features have pervaded different areas of the business. For example, Internet banking requires customers to do the bulk of work themselves. You can use the computer to access and operate your account and get cash at ATM. It could be enough until some problems or special requirements occur. Then you phone the bank only to be left on hold, listening to a repeating loop of music and a computerised voice periodically assuring you that “your call is valuable to us”.

McDonaldization can be a satisfactory business strategy for some industries, but there are pieces of evidence that the intensive introduction of associated management ideas into other sectors may be inappropriate.