The Impact of Globalization on Business Enterprises: McDonald’s

The Impact of Globalization on Business Enterprises: McDonald’s

“Hours after the United States started its bombing raids in Afghanistan…angry crowds vandalized McDonald’s outlets in Islamabad and Karachi…demonstrators burned an American flag outside a McDonald’s restaurant in the resort town of Makassar and then stormed it. No company faces the issue of globalization more acutely than McDonald’s.” (Barboza, para 1) Often the symbol of American entrepreneurship and capitalism in the world, McDonald’s has enjoyed successes with its association to the United States. However, that same association in recent years has become a vice to this fast-food chain as U.S. foreign policy around the globe is being met with resistance from enemies and allies alike. How will the McDonald’s Corporation adapt to the new challenges of globalization in world of growing resentment of anything American?

Found in 119 countries around the world, McDonald’s has branched out into 30,000 locations serving nearly 50 million customers each day. (McDonald’s, 2006) The global success of this fast-food giant can best be attributed to its ability to adapt to local cultures and resources. Problems of globalization can quickly be turned into opportunities by the company’s continued sensitivity to local cultures. “McDonald’s training programs are delivered in up to 40 languages, with the primary languages being Chinese, English, French, German, Italian, Japanese, Portuguese and Spanish for the top markets.” (Ray, para 3) Because “more than 70% of McDonald’s restaurants around the world are owned and operated by independent local businesspersons,” (McDonald’s, 2006) adherence to cultural values is often a natural occurrence. For example, in Saudi Arabia, single men must eat separately from women and children. In India, there is no beef or pork, but a vegetarian Maharanja Mac, the equivalent of a Big Mac. In Japan, where the “r” sound is rarely pronounced, Ronald McDonald is known as Donald McDonald. (Barboza, para 25) Even with the corporation’s ability to locally adapt, the world’s perception of “Golden Arches” continues to put pressure on these local franchisors.

As has become the trend in the United States and subsequently the world, healthier eating and non-fast-food lifestyles have given McDonald’s a black eye. The image of greedy, obese Americans is often associated with this iconic corporation. McDonald’s has become the poster example of public health nightmares that have contributed to the “doubling of obese people in the United States from the late 1970s to the early 1990s. Over one quarter of adults and more than 12% of children in the U.S. are obese.” (Goodman, 2002) McDonald’s has been forced to modify its product line. For example, in the Philippines, “McSpaghetti” has been added because it was discovered that Filipinos consider spaghetti to be a treat. (Blackwell & Stephan, Global Selling). Coinciding with child obesity, “the anti-McDonald’s website ‘McSpotlight’ criticized the fast-food giant for its disregard for nutritional value and the environment, and the way it panders to children.” (Feine, para 5) Listing other examples would merely demonstrate the likely reality of “too little, too late.” Health realities only contribute to the larger problem image.

In countries where the U.S. has experienced recent political discord, direct examples of globalization pressures were felt by McDonald’s. Politically and religiously motivated clerics in Lucknow, India urged the faithful to boycott all things American to include “McDonald’s, Coca-Cola and Nike.” (Barboza, para 8) Trying to disassociate itself from the United States, McDonald’s allowed its French outlets to run “print advertisements that poked fun at Americans and their food choices by depicting a hefty American cowboy.” (Barboza, para 16) As the symbol for cultural imperialism and multinational corporate greed, McDonald’s (as well as other U.S. global giants) takes great deal of heat.

Comparative advantages of developed countries over poor nations have recently become a fast-food industry challenge as well. “U.S. fast-food giants, in a move reflecting the crucial role of agricultural subsidies at the World Trade Organization, are for the first time injecting themselves into trade talks in a big way.” (Kilman & Gray, para 1) Many fast-food notables have joined together to “support efforts to lower barriers to trade in processed foods and commodities, ultimately lowering the prices of ingredients world-wide. (Kilman & Gray, para 8) It is quite evident that the vast supply lines of fast-food franchises often originating in highly-developed nations are being affected by import barriers of less-developed nations. In many ways, this is a smaller nation’s attempt to