McDonald's and its Cultural Web

This work will focus on organisational culture, its paradigm and how it is
implemented by particular company, in order to acquire logical strategies
and achieve success. It contributes to the understanding of how groups of
people respond and behave in relation to issues they face, and that is the
reason why it plays an important role on the development and change of
organisational strategy. Definitions of organisational culture are many,
counting 54 and more. (Tharp, 2009) One of them is considered to be the
most comprehensive and states: "a pattern of shared basic assumptions
that the group learned as it solved its problems of external adaptation and
internal integration, that has worked well enough to be considered valid
and, therefore, to be taught to new members as the correct way to
perceive, think, and feel in relation to those problems." (Schein, 2004)
The procedure of the implementation of such task requires a deep
understanding of the culture where the company operates or aim to
operate. It also requires understandings of the culture within the company
itself, so it could easily readapt if necessary. In order that to be done there
is the cultural web (Figure 1). Mentioned for first time by Gerry Johnson
(1992), it is a perfect tool to identify a culture within an organisation. Its
six key elements that are inter-linked form the paradigm which is the core
of the web.

Symbols

Power Structure

Stories

The Paradigm

Routines and Rituals

Organisational Structure

Control Systems

Figure 1. Cultural Web

The six key elements which overlap each other are finely connected to
form the paradigm of an organisation. This is because they are concerned
about different sectors within an organisation, but are important for its
completion. They analyse and express a collective experience within a
situation in order to form a likely course of action for all of them. For
example in this case McDonald's is a dominant American fast food chain
restaurant, which obvious aims would be to provide products for its local
market, based on the customer's interests. The increase of sales will
increase the reputation, which would lead to wider brand recognition. From
a strategic point of view, in order to increase its revenues, McDonald's will
focus on a different strategy - to get bigger on its local market and to take
the business abroad. The implementation of franchise would lead to many
more strategies, in order to satisfy the different market needs, and so it
might change the key elements to some extent of the cultural web.
However, people within this organisation will behave in line with its
paradigm, and no matter where they operate, they will aim for a dominant
position and recognition on a given market, as they were already able to
achieve that on their own. Johnson explained paradigm as: "paradigm
which, in many organizations, creates a relatively homogeneous approach
to the interpretation of the complexity that the organization faces." (1992)
and, quoting Schein from 1986, he defined it as: " essentially cultural in
nature in so far as it is the deeper level of basic assumptions and beliefs
that are shared by members of an organization, that operate

unconsciously and define in a basic taken for granted fashion an

organizations view of itself and its environment." (1992)
Stories
Being better, not just bigger
We care about our customers
Very delicious and organic products
Commitment to firm

Symbols
McThis and McThat
Big Mac
I'm Lovin' It
Ronald McDonald
Happy Meal
McDonald's Logo

Routines and Rituals

Coming up with new products periodically

Celebrating anniversaries and world days
Engaging in CSR activities
Organising private events
nstantly updating advertisements and campaigns

PARADIGM
Greatest and oldest
Open for innovations in the name of business
Brand recognition
Market expenditure

Power

McDonald's Cultural WebCEO and likeminded seniors

Controls

taurant control systems (cameras, computer software)

Quality control (products, packaging etc.)
Audit control (regional/country)
Customer's satisfaction control (surveys, games)

Huge investments
Massive advertisements and campaigns
Worldwide recognition
Own its properties

Structure
Hierarchical structure
CEO and seniors
Country managers (Franchise)
Regional/State managers (Franchise)
Local/Restaurant managers

Figure 2.
As we already got the cultural web for McDonald's filled (Figure 2), we
would be able now to analyze whether or not the key elements and
paradigm are easy or hard to change for this organisation. Also would such
changes be beneficial and necessary, given the fact that McDonald's is the
best known restaurant in its branch. Surely it is the most recognizable fast
food chain nowadays, but it haven't been like that always, so in order
understand the strategic steps that it acquired we will go back in the
history of the company. That would help us to find out what some seniors
and CEOs have done to get the organisation to where it is now. It is
familiar to most people that McDonald's got its name from its inventors
brothers - Richard and Maurice McDonald. What they don't know probably
is that the brothers didn't started their career by selling burgers. They had
to acquire that strategy by focusing on the products with highest demand
only. After 3 years of research and significant demand only on a few
particular products from their way much wider back then menu, the
brothers came to conclusion to focus their business on burgers only. That
decision led to another significant one. Since they were selling burgers
only, they found all the dishes, glasses etc. unnecessary anymore, and
replaced them with papers and plastics. That is a huge cost/efficiency
strategy for chain restaurants, not that it was back then, but it is like that
even now, so it was a very on time adopted strategy for an efficient and

fast growth. And the third important agreement that they made in order to
reorganize their old restaurant to the McDonald's as we know it now, was
to implement the "self-service" which were gaining popularity back then.
With all those 3 significant changes which took place during a 10 year
period (1940-1950), McDonald brothers acquired dynamic capabilities
strategy for their company, before it has even been defined: "the firms
ability to integrate, build, and reconfigure internal and external
competences to address rapidly changing environments." (Teece, 1997).
Those integrations saved them a lot of staff, maintenance, and other
services expenses, and set the starting point of their future world brand.
Many of the assumptions based back then formed to some extend the
paradigm, which is very similar to the one that could be extracted now
from the cultural web (Figure 2). A minor changes might be noticed,
because of the franchise implementation later on, but the main ideas and
concepts have been set long ago during first few years of McDonald's.
That makes those aspects impossible to change, because obviously they
are the main drivers for the business growth, since the previous
approaches werent that efficient. As Richard McDonald said: "Our whole
concept was based on speed, lower prices and volume. We were going
after big, big volumes by lowering prices and by having the customer
serve himself."(Adelson, 2012), and by offering the most preferred
products to him. Later on some random entrepreneur for the time then
noticed a huge potential for the business growth. Ray Kroc the man with
the successful strategies and strong principles. He continued with
significant improvement of the dynamic capabilities for McDonalds,
developing most of the key elements of its cultural web to the points,
which we see now. Most of these were implemented while operating during the franchise expansion, as it gave a vision of how the business
should be managed to be successful. This makes a rational explanation
why most of these key elements would be hard to change as they were
adopted with the time in order to serve the enhanced by Kroc paradigm.
For example McDonalds have different products from country to country
for customers satisfaction. If somewhere is noticed an unhappiness, which
could be monitored through surveys and product demand, McDonalds
might want to focus on its routines and their main point to come up with a
new product for the specific market. That might change some of their
products, but wont change the aspects of their cultural web elements.
For conclusion we will carry out a VRIO analysis in order to examine the
internal environment of the organisation. That tool developed by Barney
(1995) emphasis on functionality and usefulness of the companys
resources to gain competitive advantage. McDonalds VRIOS is as follows
Value: a high value in accordance to its brand image and exploitation of

the available resources which had helped it evolved successfully for more
than five decades. Rarity: the utility of the resource may be franchise
oriented and spread through its breadth but the main control still remains
in the hands of the top management authorities. The franchisee has to
follow company rules strictly to run a franchise of McDonalds. Imitability:
may not be difficult to imitate in aspect of the product, but its functionality
is very difficult to achieve. Organisation: always ready to exploit new
resource and the organisation structure is well developed. It provides a
good support for its franchise operations. Overall McDonalds have
competitive advantage of resource based view over its competitors. Most
recognizable in its HR sector for example, as it have the Hamburger
University, which is concerned about the knowledge required by all
members of the hierarchical structure of the organisation.

References:

Adelson, S.M. (2012) 'McDonald's and the New Franchising Paradigm',

Museum of American Finance, pp. 15 [Online]. Available at:
http://www.moaf.org/publications-collections/financial-historymagazine/103/_res/id=File1/McDonalds.pdf (Accessed: 15th December
2015).
Barney, J.B. (1995) 'Looking inside for competitive advantage', Academy of
Management Executive, vol.9(). [Online]. Available at:
https://www2.bc.edu/~jonescq/articles/barney_AME_1995.pdf (Accessed:
18th December 2015).
Johnson, G. (1992) 'Managing Strategic Change Strategy, Culture and
Action', Long Range Planning, vol.25(). [Online]. Available at:
http://xa.yimg.com/kq/groups/18937164/744773344/name/johnson
%20(1).pdf (Accessed: 15th December 2015).
Schein, E.H. (2004) Organizational Culture and Leadership Third Edition,
pp. 17 [Online]. Available at: http://www.untagsmd.ac.id/files/Perpustakaan_Digital_2/ORGANIZATIONAL%20CULTURE
%20Organizational%20Culture%20and%20Leadership,%203rd
%20Edition.pdf (Accessed: 15th December 2015).
Teece, D.J.; Pisano, G. and Shuen, A. (1997) 'Dynamic Capabilities and
Strategic Management', Strategic Management Journal, vol.18(), pp. 516
[Online]. Available at: https://business.illinois.edu/josephm/BA545_Fall
%202015/Teece,%20Pisano%20and%20Shuen%20(1997).pdf (Accessed:
15th December 2015).
Tharp, B.M. (2009) 'Defining Culture and Organizational Culture: From
Anthropology to the Office', Haworth, pp. 5 [Online]. Available at:
http://www.thercfgroup.com/files/resources/Defining-Culture-andOrganizationa-Culture_5.pdf (Accessed: 15th December 2015).