FACULTY OF MANAGEMENT, EDUCATION & HUMANITIES

BACHELOR OF BUSINESS ADMINISTRATION (HONOURS)

(HUMAN RECOURCE MANAGEMENT)

BUSINESS ENGLISH (BBM 6133)

“MCDONALD’S CORPORATION”

PREPARED BY:

STUDENTS NAME MATRIC NO.

NUR SYAMIMI ROZANAH BINTI MOHD SIDIK BHR09230003
SYAHIRA BINTI SUPANDI BHR09230005
MUHAMMAD DANEAL BIN ANIZAM SHAH BHR09230006
NIK FARAH NASUHA BINTI MD AZAM BHR09230016
NUR HAJARRUL ASWAD BT AHALLUDDIN BHR09230019

PREPARED FOR:
MADAM NAZIHA BINTI TASIN

SUBMISSION DATE:
21st FEBRUARY 2024
 Table of Contents

EXECUTIVE SUMMARY ....................................................................................................... 1

1.0 INTRODUCTION .......................................................................................................... 2
2.0 ANALYSIS PROBLEM ................................................................................................. 4
2.0.1 Overpriced issue ...................................................................................................... 4
2.0.2 Technological Innovation issue ............................................................................... 5
2.0.3 COVID-19 Impact on McDonald’s business........................................................... 5
2.0.4 Boycott issues .......................................................................................................... 6
2.0.5 Change in Consumer Preferences ............................................................................ 7
3.0 RECOMMENDATION .................................................................................................. 7
3.0.1 Strategies to lower the cost of the market and staff reward ..................................... 7
3.0.2 Employee training performance .............................................................................. 8
3.0.3 The Well-being of the Employees ........................................................................... 9
3.0.4 Partnerships and Collaborations .............................................................................. 9
3.0.5 Diversifying Menu ................................................................................................. 10
REFERENCES ........................................................................................................................ 11
EXECUTIVE SUMMARY

McDonald’s Corporation is a global brand in the fast-food industry with over 80 years of
operations until today. The organization surprisingly practices downsizing and undergoes
hardships and complaints from many perspectives around the world. This topic become popular
when McDonald’s announced plans to downsize their employees through a memo found on
thelayoff.com website in 2023.

The essay will introduce understandings of downsizing, overpriced, COVID-19 post-

pandemic, technology innovation, boycotts and changes in consumer preferences to analyses
the problem of McDonald’s Corporation to downsizing their employees that might happen
within the organization. For instance, overpriced fast food has become a price war that is still
ongoing between competitors in fast food chains. The customer is obviously affected by the
sudden high prices, and there is a difference in status among customers that the company
purposely selected. Also, the employees get an impact from downsizing from the company
because customers spend less in their restaurant.

The COVID-19 pandemic was challenging for McDonald’s Corp. It affects labour wages and
business profit, there is one case where a company practices layoff. Besides, McDonald
employees might feel pressure to learn new things due to technological innovation because the
company wants to depend more on technology than human labour. Then, McDonald's faces
boycott support from the Muslim community worldwide after making a controversial move
due to supporting Israel. This affects employees’ wages because of a lack of customers. Then,
McDonald's is facing health concerns due to its high-calorie, high-fat menu items, which are
linked to heart disease, diabetes, and obesity, despite attempts to offer healthier options.

The essay will add the recommendation application of the analysis problems of downsizing
that have risen in McDonald's Corp. that could help to solve issues such as strategies to lower
the cost of the market and staff reward, employee training performance, the well-being of the
employees, partnership and collaboration, and diversifying menu within the organization. The
purpose is to ensure a smooth transition for employees and position the company for sustained
success in a technologically advanced landscape.

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1.0 INTRODUCTION

The context of the meaning of downsize is to reduce the number of people who work in a
company, business, etc. in order to cut costs, implement measures, and increase organizational
efficiency. This practice has become increasingly common in today’s competitive business
environment as companies seek to remain competitive and adapt to changing market
conditions. For example, when we use the term “downsize”, it refers to McDonald’s
announcing plans to downsize their US operations.
(https://www.oxfordlearnersdictionaries.com/definition/english/downsize)

1.1 ANALYSIS PROBLEM

Analysis is the full detailed of the study or assessment of something in order to emphasize and
acknowledge more about the topic of discussion, in other words, the result of a study case, such
as statistical or data analysis, to conduct an analysis, detailed outline analysis, and further
analysis. For example, this essay is an analysis of a problem facing McDonald’s Corporation
in the United States. (https://www.oxfordlearnersdictionaries.com/definition/english/analysis)

1.0.1 Overpriced
Overpriced refers to something that is supplied for trading at a premium, which is
something that costs more than it is worth or too expensive for the customer to purchase.
For example, these dresses are very pretty, but they are really overpriced. Also, most of
the cafés I went to are way overpriced, but they have a nice view and delicious food.
(https://dictionary.cambridge.org/dictionary/english/overpriced)

1.0.2 COVID-19 post-pandemic

The official name from the World Health Organization (WHO) is known as ‘2019 novel
coronavirus’ and the causes of coronavirus disease (COVID-19) as a new infection. The
name of the virus announced by ICTV on February 11, 2020, alludes to severe acute
respiratory syndrome coronavirus 2 (SARS-CoV-2). For the present, this malady is a
discussion on disease prevention, spread, transmissibility, severity, and remedy.
(https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-
guidance/naming-the-coronavirus-disease-(covid-2019)-and-the-virus-that-causes-it)

2
 1.0.3 Technology Innovation
The new design, application, or boost technologies, tools, systems, and processes that
bring significant advancements or breakthroughs in various fields is known as
technology innovation. As well as the individual knowledge, expertise, and resources
to develop solutions to innovation problems, upgrade lifestyles in efficiency that fit
modern society and extend economic. (https://ideascale.com/blog/what-is-technology-
innovation/)

1.0.4 Boycott
Boycotts are identified as engaging in a concerted refusal to deal with a particular
person, a store, and organization, etc. Most of the time, is to show dissatisfaction or
oppress a certain condition. For instance, many people in the United States of America
started to boycott entirely McDonald’s fast-food restaurants in 2023 due to the sensitive
issue of free meals for the Israeli army, while the controversy still rages.
(https://www.merriam-webster.com/dictionary/boycott)

1.0.5 Consumer
A consumer can be defined as a person who buys goods or services for their own use,
it can be something or anything that the person spends on personal use. For example,
healthier options, sustainable methods, and customization have influenced consumer
preferences. (https://dictionary.cambridge.org/dictionary/english/consumer)

1.2 Recommendation
A recommendation is advice, a proposal, or a submission that something is morally correct or
acceptable for a particular determination or post. To illustrate, the new staff entered was
recommended by our personal general manager, or many people bought that food because they
received advice from influencers on the internet.
(https://dictionary.cambridge.org/dictionary/english/recommendation)

3
2.0 ANALYSIS PROBLEM

Significant issues have been rising since downsizing practices were implemented on April 3,
2023. Chris Kempczinski, CEO of McDonald’s, sent a warning memo to the employees about
possible layoffs in early January. Surprisingly, it happened on April 3. The article from
ABC7News was discovered in a memo shared with staff, which is trending globally on
TheLayoff.com website, but McDonald’s is announcing layoffs that affect hundreds of
employees. Hence, the following are the problems that McDonald’s Corporation faces while
practicing the downsizing that might happen to the company:

2.0.1 Overpriced issues

Based on corporate.mcdonalds.com, McDonald’s has entered the world for the past 80 years,
successfully bringing joy and satisfaction to the consumer, and has more than 100 markets
around the world. However, complaints about overpriced meals in fast-food chains have risen
on new.ycombinator.com after the company announced a layoff. According to Adam Chandler,
a journalist who wrote the book Drive-Thru Dreams: A Journey Through the Heart of America’s
Fast-Food Kingdom, in an article on npr.org (Schweitzer, A. 2023), the menu prices of
McDonald’s restaurants responded to inflation in 2022, and many customers could not realise
the changes. This could impact customers with lower incomes and lead to company
downsizing.

McDonald’s in the US has more than 150,000 employees in corporate roles, including the
company restaurant that they own. As consumers become more price-sensitive, sales decline,
and in response, companies may resort to downsizing their workforce to maintain profit
margins. This downsizing will affect frontline staff, including cashiers, cooks, and service
personnel, who are responsible for the everyday operations of these establishments. From the
same article mentioned above, McDonalds’s Corp. CEO Chris Kempczinski, said the
customers are spending less but frequently visiting McDonald’s restaurants. This situation has
shown that the customer cannot afford to buy the food because it is too expensive for them.

4
2.0.2 Technological Innovation issues

McDonald's Corporation is pursuing corporate layoffs. According to the article Dailymail by

Keith Griffith, McDonald's will lay off hundreds of corporate staff to 'free up resources for
growth' as it plans to re-invent the drive-thru across the world. One of the problems that
McDonald downsizing could have been an impact on the company, especially the
employees. In this case, McDonald might have an issue with technological innovation
because the company wants to depend more on technology than human labor. So, McDonald
can reduce costs by planning layoffs to invest in technological innovation. According to the
article Fast Company by Michael Grothaus, the layoffs across various industries have been
due to fears of economic slowdowns and organizations trying to generate operational savings
after tech, especially over-hiring during the early pandemic years.

There may be certain challenges or problems that arise in implementing a McDonald's drive-
thru innovation. Some potential issues that could arise include technical difficulties. For
instance, employees might feel pressure to learn due to technological innovation from various
factors. Besides, rapid technological changes may lead to increased job demands, unrealistic
expectations, or inadequate training, causing stress and burnout. Additionally, surveillance
technologies can infringe on privacy, fostering a hostile work environment. It is crucial for
organizations to balance innovation with employee well-being and address any negative
impacts through thoughtful policies and support systems. New technology may experience
glitches or breakdowns, causing delays in the ordering process and frustrating customers. Other
than that, employees may require additional training to properly operate the new technology,
and some may be resistant to change.

2.0.3 COVID-19 Impact on McDonald’s business

In late 2019, the world was hit with waves of Covid-19. The economic sector had to be close
to slowing down the spread and making sure that people were not going out and going
unnecessary distance. This has made McDonald find solutions to ensure that the company is
able to stay afloat during the pandemic. McDonald’s dropped in global profit and in stores
during the pandemic, followed by the low profit that was expected to follow next year in 2020.
This happened because McDonald would shut down, limiting operations, and only opting for
drive-thru and delivery through apps to follow the guidelines from the CDC in the US. Premises

5
around the globe had a drop of more than 2.5% in shares in the company. As a result, the
employee would be affected by cutting half of their wage.

Most of its restaurants are able to stay open because they provide drive-thru and delivery
options. But the employee, especially delivery man, could not last long in the organization due
to being overworked earning less. Based on a true incident, the layoff case of COVID-19 in the
US occurred when the workers of McDonald’s won back jobs. According to this case, the judge
said the workers were unlawfully fired and ordered that they be reinstated and provided with
back pay. Then, three of the workers have additionally filed a lawsuit in Connecticut Superior
Court (CSC) under a state law requiring employers to re-hire laid-off pandemic workers before
replacing them. At last, in 2019, McDonald’s gave a $170,000 settlement that was approved by
National the Labour Relations Board (NLRB).

2.0.4 Boycott issues

In December 2023, people started boycotting McDonald’s for being accused of having or
supporting pro-Israel. McDonald’s said it was donating meals to all those who are involved in
the defence of the state, hospital, and surrounding areas. In ‘The Street’ article by Tony Owusu,
it says that McDonald's may have stepped on one this week after McDonald's Israel announced
that it was opening five branches dedicated to donating about 4,000 meals to Israeli soldiers
and first responders. There is so much controversy between Israel and Palestine that affects the
Muslim community and the anti-Muslim community. So, it has affected all the McDonald's
employees due to a lack of customers because of boycotting issues.

There are several analyses of the problem that will affect McDonald downsizing such as
negative public perception. McDonald may be downsizing because boycotting can lead to a
negative public perception of McDonald's. For example, the public may view the company and
all the employees that work for McDonald as insensitive to social issues or worker rights, which
can also impact their reputation. Then, this issue can erode customer trust in McDonald's.
Customers may question the company's values and commitment to ethical practices, potentially
leading to a decline in customer loyalty and patronage. While this boycotting issue affects all
productivity and reduces employees’ income, it can also result in unemployment for many
displaced workers, along with sizable reductions in earnings that are consistent with substantial
losses in their specific human capital.

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2.0.5 Change in Consumer Preferences

In 2023, McDonald’s is facing growing concerns about its fast-food offerings, particularly its
high-calorie, high-fat items like hamburgers and fries (Rifkin & Hampton, 2023). The demand
for healthier options, sustainable methods, and customization that was driven by a growing
awareness of the impact of lifestyle choices on health and environment, has influenced
consumer preferences, leading to a rise in health-conscious options like plant-based or lower-
calorie options (Abbas, 2023). However, concerns about the impact of fast food on health, such
as heart disease, diabetes, and obesity, have grown. Consuming fast food regularly can lead to
an imbalance in energy intake and expenditure, contributing to weight gain. High-calorie fast
food often contains excessive amounts of unhealthy fats, sugars, and refined carbohydrates.

McDonald’s has faced criticism for its generous serving sizes, which may promote overeating
and contribute to the obesity pandemic. The company’s ingredients have also been criticized
for using cheap ones to save money, exacerbating health issues (Pereira, 2023). McDonald’s
marketing strategies targeting children and teenagers have been criticized for encouraging
unhealthy eating habits. A 2010 lawsuit against McDonald’s in California was dropped, but
some still view it as predatory behaviour (Tayade, 2023). Hence, change in consumer
preference will reduces sales and market share that may result from decreased demand.
Prompt fast food to close underperforming outlets to align with the growing demand for
healthier alternatives because of economic pressures and competition from healthier food
options may drive these downsizing decisions (Pereira, 2023).

3.0 RECOMMENDATION

3.0.1 Strategies to lower the cost of the market and staff reward

While overpricing in fast-food restaurants may appear as a short-term solution to financial

challenges, its long-term consequences on employee downsizing raise serious ethical and
operational concerns. Consumers may become more conscious and demanding of the value and
quality of the ingredients. In order to deal with the overpriced issue, McDonald’s Corp. needs
to striking a balance between profitability and fair employment practices for the sustainability
of the fast-food industry. Such as, from article buzzfeednews.com (Wong, V. 2016).
McDonald’s has developed ‘McPick 2’ strategy that allows customers to purchase a cheap meal
7
in two pieces or two items to share for a lower price. This could help a lower income person
afford to buy the food.

As consumers and businesses, it is crucial to advocate for responsible pricing strategies that
not only ensure the financial health of these establishments but also prioritize the well-being
and job security of the employees who contribute to McDonald’s success. The employer should
increase the reward for employees as an expression of appreciation for joining the group
members and gaining more profit such as a birthday gift, a holiday ticket trip, or a free staff
meal. This will foster a more sustainable and ethical fast-food industry for both consumers and
employees for a long time. Then, increase engagement between employer and employees so
the company does not need to implement the downsize because their employees work hard to
achieve the company’s goals.

3.0.2 Employee training performance

McDonald’s can consider strategic hiring of individuals with expertise in emerging

technologies to complement its existing workforce. This can inject fresh perspectives and
accelerate the organization's digital transformation. For this, it can ensure that employees are
well-informed about the responsible use of new technologies and are equipped to handle
potential ethical challenges. So, the workers will keep track of their progress in acquiring digital
skills. For instance, provide employee training performance to measure overall team
productivity and efficiency. Other than that, implement a schedule for regular training sessions
to keep staff updated on the latest digital tools and programmes to make sure and acknowledge
whether they will catch up with every technological innovation in the McDonald Company.

McDonald’s should prioritize investing in training and reskilling programmes for employees
whose roles may be affected during downsizing. Besides, managers should equip them with
skills that align with the evolving needs of the business, promoting a culture of continuous
learning. In addition, the company must retain employees with skills crucial for innovation and
adaptation to new industry trends by prioritising positions that contribute to technology
adoption, digital transformation, and other advancements in the fast-food industry in order to
achieve its mission and vision.

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3.0.3 The Well-being of the Employees

While many companies had to lay off their employees during the COVID-19 pandemic, this
was to cut the cost of expenses that they must consider. But in the case of McDonald, they help
their employees by providing a safe environment at the workplace during the pandemic that
helps employees maintain their jobs and making sure that they have a salary when the economic
sectors is closed. McDonald achieved that by cleaning the surface and the equipment on the
premises, which is safe to use, and by using services from clinics that provide professional
cleaning services on the premises. This helps employees maintain the workforce while still
complying with the restrictions on COVID-19. This gives McDonald’s a better capacity to
operate and use all the manpower that they need during operation.

Other than that, the company can provide paid sick leave and support lines that employees can
utilize during the pandemic that help them if they have COVID-19. While other companies
would not pay if employees had COVID-19, McDonald’s is the opposite. They would make
sure that if any employees are paid during quarantine, they would not need to force them to
work, and this is one of the best ways to maintain the morale and manpower during the
pandemic and while still making sure that they have all the manpower to operate premises.

If any employees is feeling demoralised and having a hard time during work, they can attend
counselling for them or their family members which is a benefit that not a lot of company can
provide, making them stand out the most and showing that they can do whatever it takes to
make sure that their employees are well taken care of and still have the capability to undergo
during pandemics, becoming a strong well-being for the employees than the others.

3.0.4 Partnerships and Collaborations

McDonald’s can collaborate with reputable organizations, influencers, or community groups to

showcase McDonald's commitment to positive change and community well-being. This way,
McDonald can increase their positive publicity. McDonald’s company can collaborate with
influencers so that McDonald can gain all customers trust so they can influence them to buy
McDonald’s back. McDonald can also participate in local events and engage with local
charities to show commitment to the community. This way, they can gain trust from their
customers by doing and participating in all the community services.

9
McDonald's employees can participate in well-being programmes, training initiatives, and
career development opportunities to demonstrate a positive work environment. So, McDonald
employees can make positive changes or take initiatives that the company has emphasized,
emphasizing commitment to positive values. After that, McDonald’s should launch educational
campaigns to inform the public about the company's efforts to address concerns, implement
changes, and contribute positively to society. This educational programme can acknowledge
and address the specific concerns that led to the boycott, showing a commitment to
understanding and resolving the issues. After all, rebuilding trust takes time, and consistent
actions that align with positive values are crucial. It is essential for McDonald's to
demonstrate a genuine commitment to addressing concerns and making meaningful changes.
So, McDonald’s should take better measures to save their company and their employees from
beingunemployed.

3.0.5 Diversifying Menu

Khachatryan (2023) highlights the growing demand for healthier meal options in the fast-food
industry, suggesting McDonald’s can expand its market share by diversifying its menu to attract
health-conscious customers. Introduce items with lower calories counts, reduced sodium, and
healthier cooking methods. Emphasize the use of fresh and high-quality ingredients in menu
items to convey a commitment to health and quality. McDonald’s can position itself as a
restaurant that caters to the needs of health-conscious consumers, attracting a broader
customer base and addressing changing dietary trends (Pereira, 2023).

McDonald’s can cater to a wider customer base by offering vegan and vegetarian options,
similar to KFC, Dunkin, and Burger King’s plant-based menus. This could attract
environmentally conscious and health-conscious consumers. McDonald’s should follow these
trends to stay competitive. Examples include Burger King’s Impossible Whopper, Dunkin’s
Beyond Meat’s plant-based sausage breakfast sandwich, and KFC’s Beyond Meat-produced
vegan fried chicken. These changes have been well-received by investors (Mourdoukoutas,
2019). McDonald’s plans to introduce healthier menu options to address health concerns. The
goal is to keep the menu fresh and appeal to changing consumer preferences. McDonald’s can
enhance its reputation and brand image by launching healthier food options, which could
increase sales and improve customer loyalty, as per Pereira (2023).

10
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