McDonald’s and Its Crisis Essay Example for Free

McDonalds and Its Crisis EssayWhat should a fraternity do when its core product is considered unhealthy or change surface harmful by the human race? Is it even possible for such a political party survive and thrive or will it eat to shut down its business? McDonalds agile f argon has for a long time been considered unhealthy by the public. In recent years, the health conscious trends have be get down increasingly popular. Moreover, many scientific studies and findings have surfaced and favoredly confirmed that childrens increasing intake of nimble intellectual nourishment, which often contains spicy sodium field, sugars, saturated fats, and calories, for a long period of time would lead story to childhood obesity. Moreover, obese children have a much higher find of many health problems such as coronary heart disease, high source pressure, diabetes, and certain cancersall of which are fatal if left untreated.In 2010, a mother from California sued McDonalds over the companys securities industrying practice of able meal. The mother claimed that McDonalds used alluring toys to lure kids into clever Meal. This lawsuit, which might be viewed by many as senseless and absurd, was atomic number 53 of McDonalds biggest cases. In order to come out of the lawsuit ahead, this largest dissolute food set up had to undergo some major(ip) organisational changes. In this paper, we would care to use the intimacy learned in the class to analyze the event (the lawsuit) and its effects on McDonalds.The paper will have four main piece of musics. In the first part, we brook a brief introduction of the company, McDonalds, and the lawsuit. In the second part, we will use the concepts learned in class to analyze contented Meals influencing strategies and the organizational changes during and after the suit. We bank that able Meals influencing strategies deserve our attention as they were the main causes of the crisis. Since its glad Meals influencing ta ctics were so effectively and successfully executed, McDonalds became the obvious fundament of the mentioned legal dispute. In the third part, we will declare oneself our evaluations, pros and cons, of McDonalds strategies and tactics in handling the crisis.Finally, in the twenty-five percent part, depending on our evaluation of how McDonalds control of the situation, we want to qualifying our recommendation to parts of the companys strategies which in our opinions could have been improved. Also, since we overall felt that McDonalds managed the crisis extremely well, we recommend its strategies to be implemented to asshole in the boxful, which faced a corresponding situation to McDonalds. However, unalike McDonalds which vigorously stir up for the duration of its apply toys to push Happy Meal sales, doodly-squat in the Box decided to drop toys in its Happy Meal when it was faced with the pressure from the public. We believe McDonalds implementation of strategic changes could have helped Jack in the Box to put toys back to its Happy Meal.I IntroductionMcDonalds Corporation is the worlds pencil lead food service organization. The corporation started out as a small drive-through in 1948 by two brothers, Dick and Mac McDonald. In 1961, Raymond Albert Kroc, a salesman, dictum a great opportunity in the grocery store at the time and bought the business from the McDonald brothers. By 1967, McDonalds began its first business expansion to countries outside of the coupled States. This unyielding expansion resulted in the opening of 23,000 McDonalds restaurants in 110 countries in 1994. Today, McDonalds, the leading fast food chain, had twice the market share of its closest U.S. competitor, Burger King. In fact, McDonalds market share represented 7 percent of summarise U.S. eating-out sales (Cohen, 2009, p8-2, p8-3).There are several major influences and factorssuch as government, customers, complaisant trends, and so forthwhich play an heavy role in shaping organizational behavior.In the recent years, McDonalds corporate image has been negatively affected by adverse publicity. For example, McDonalds has been criticized of paying its employees low wages and enforcing an aggressive anti-union policy throughout its fast-food empire. Further much, the corporation was heavily condemned by the public for exploiting children market and causing childhood obesity. Indeed, McDonalds has been using advertising which mainly backsideed children.As a result, according to the survey to American school student in 1996, 96 percent of all children could identify Ronald McDonald (Cohen, 2011, p8-5). How was McDonalds able to achieve the above result? McDonalds children marketing strategies were objective bare(a) unless extremely effectiveto give small toys as a discourse to children in order to appeal to their interests. With the repeated uses of this psychological influencing tactic, children would subconsciously make a connection between McDonalds and toys. Therefore, children, who were under the influences of McDonalds marketing strategies, could non help to think of McDonalds whenever thinking of toys.The plaintiff, Monet Parham, a California mother of two, sued McDonalds overly exploiting children market on Oct 2010 (Dan, 2011).She claimed that McDonalds gave out alluring toys that come with the meals in order to lure kids into unhealthy diet. The mother also stated that McDonalds make it so much harder to say no to her kids when they are actually want those toys (York, 2010). The CSPI (Center for Science in the Public Interest) confirmed that kids do not have the cognitive maturity to understand the persuasive intent of advertising (York, 2010). afterward on, the ban of dowry Happy Meals with toys was easily passed by the Board of Supervisors in an 8-3 vote, which would take effect on Dec 1st, 2011 if McDonalds didnt meets the nutritional standards of meal in San Francisco till that time (San Francisco Hap py Meal Toy Ban Takes Effect,2012).McDonalds quickly do response to this event. The fast food chains spokeswoman, Bridget Coffing, told the LA Times newspaper We are confident that parents understand and appreciate that Happy Meals are a fun treat, with quality, right-sized food choices for their children that can fit into a balanced diet, (York, 2010). McDonalds said that it would defend itself against the lawsuit. Meanwhile, it started offering apple slices and milks in the new Happy Meals. Eventually, the San Francisco judge dismissed the suit since McDonalds was able to meet the required nutritional standards. In the next part, we will assess this problem relate to the concept of influence and organizational change.II Course Concepts Related To The Event defineInfluence is any communication which produces a change in an action and/or an attitude in one or much people. Influence is one of the virtually important management strategies in any organization. A strong influence tac tic includes role of planning and dialogue, establish credibility, frame goals and parking lot ground, vividly pay back your position and connect emotionally (Wong, Influence and persuasion, 2012).In this case, although McDonalds was sued by alluring children, they indeed occupied the children market successfully. In order to establish an influence, one must first establish communicationexchanges of dialogue. McDonalds did good at emotional influence and ingratiation. The company created a clown division named Ronald and featured it on local anesthetic TV in early 1960s. Then, people were employed to perform live Ronald McDonald clowns at childrens birthday parties held in restaurants. Ronald McDonald had a magic touch with children give McDonalds an important advantage over its competitors in the children market (Cohen, 2011, p8-5). With Ronald McDonald mascot so successful as a communication besidesl, McDonalds went one step get along to establish its credibility in children s minds.This was not hard for the leading fast food chain as it is a common notionand quite truethat children are in most cases easy to influence. Then, how did McDonalds make children trust it? The answer is easymake the children happy. For example, children were happy when gifts such as Ronald dolls and wristwatches were given free with every purchases of Happy Meals. McDonalds also used toys of characters from popular movies appeal to children. In this aspect, they used influence of ingratiation effectively. Ingratiation means do something what the person likes. For example, a recent and very successful Happy Meal promotion was a tie-in with the popular DreamWorks Animation film Shrek Forever After.The meals included toy watches fashioned after the movies characters Shrek, Donkey, Gingy and pool in Boots (Dan, 2011). Furthermore, McDonalds needed to create a common goalas to what it stands forwith children. With free toys and the eternally smiling Ronald McDonald, McDonalds con vinced children that the company and its restaurants stands for happiness and enjoyment. However, just establishing common goal and credibility is not enough to make an effective influence, the communicating message and/or idea must be vividly reinforced and emotionally connected with the target audience. According to the Fast Food FACTS Report, young people viewed enormous amounts of fast food advertising.Every day, the average preschooler saw 2.8 fast food ads on television, the average child saw 3.5, and the average teen saw 4.7. Teens listened to approximately one radio ad per day. Children were exposed to more than 1,200 conventional fast food ads per year while teens saw and heard more than 2,000. (Harris, Schwartz Brownell, 2010, p132)Thus, with its spending of $900 million in media in 2009, McDonalds make sure that the companys image was vividly reinforced and emotionally connected in the minds of many children (Harris, Schwartz Brownell, 2010, p132). In sum, McDonalds in fluencing strategies were so successful that 90 percent of the children go to McDonalds once a month (Fast Food Marketing to Children, 2010).Nevertheless, McDonalds effective influencing strategies made it a target for one of the biggest lawsuit in the fast food industry. In the next part, we will discuss how McDonalds applied its strategic changes to overcome the crisis.Organizational ChangeFor years, critics have been criticizing McDonalds and its role in Americas obesity problemspecifically the franchises aggressive marketing strategies toward children. As the lawsuit pointed out, McDonalds used toys to lure children and in turn strike off kids up for a lifetime of health problems.The leadership and management of an organization must be prepared for a turbulent environment which demands more manifold planning for the future. The phrase organizational change is some a significant change in the organization, such as reorganization or adding a major new product or service. In fac t, there are six forces creating the need of changethe changing nature of the work force, technology, economics shocks, changing social trends, the new world politics, and the changing nature of competitions. (Stephen,1992, p.270)From this lawsuit, we could find evidences of a major force, changing social trend. As the health conscious became a more and more popular, people will be looking for healthy food that is low in calories, fat and sodium. In the American, childhood obesity has more than tripled in the last(a) 30 years. Furthermore, according to the Centers for Disease Control, seventy percent of obese children have higher risk for cardiovascular disease, and are at greater risk for chock up and joint problems, sleep apnea, and social and psychological problems such as stigmatization and poor self-esteem (Centers for disease, 2012).The publics pointed a finger at McDonalds, the worlds largest fast food company, who use of Happy Meal toys to lure children. This situation mad e McDonalds under heavy criticism from public health officials, parents, lawmakers and so on because they are frustrated with rising childhood obesity rates and weak anti-obesity efforts from fast food restaurant operators.Oftentimes, organizations are confronted with problems in the environment or with versed contingencies suggesting that current ways of doing things are not effective (Miller, 2012, p180). When facing the changing forces, organizations often make changes gradually. Of course, the implementation of planned change is neither a simple nor a straight-forward process (Miller, 2012, p181). In fact, it took McDonalds six years (from 1984 to 1990) to react to pressure meeting tactics and litigation before starting to adapt its service offer to the dietary concerns of its customers. At the very beginning, the company just made some modestly changes, such as using light oil, adding 2% milk into the carte du jour before actually launching new products such as the McVeggie, the McLean, and pizza in the 1990s (Joanne Caroline, 2006).If we consider McDonalds step-by-step changes, in the above examples, organizational planned change in response to social trend, the fast food franchise reactions to the CSPI (Center for Science in the Public Interest) lawsuit then can be defined as unplanned change. According to Coombs (1999, p.2), organizational crisis is an event that is an unpredictable, major threat that can have a negative effect on the organization, industry, or stakeholders if handled improperly. In other words, crisis is unplanned change that can rock an organization and all the people associated with it.In response to this lawsuit, on December 15 2010, McDonalds posted on its website a Response to CSPI LawsuitWe are proud of our Happy Meals and intend to vigorously defend our brand, our reputation and our food. We stand on our 30 years track record of providing a fun experience for kids and families at McDonalds. We listen to our customers, and p arents consistently tell us they approve of our Happy Meals. We are confident that parents understand and appreciate that Happy Meals are a fun treat, with quality, right-sized food choices for their children that can fit into a balanced diet. (Bridget, 2010)Later on, McDonalds made it clear that the fast food chain had begun to make changes to the composition of Happy Meals in response to parental and consumer pressure. It also pledged to reduce the sodium content in all of its foods by 15 percent, with the exceptions of soda and desserts. Moreover, it set a deadline of 2015 for limiting salt, and said that it would spend the rest of this decade cutting back on sugars, saturated fats and calories and making adjustments to portion sizes. The new Happy Meals were introduced in September and launched across the companys 14,000 restaurants on April 2012.They would all include apple slices, but in a smaller amount of three to five slices than the current eight to 10 offered as an altern ative (Stephanie, 2011). McDonalds will also offer a fat-free chocolate milk option, along with the option of low-fat milk or the traditional soda. The price is not expected to change (Andrew,2011). Furthermore, as part of an effort to provide better introduction to nutritional information about its foods, McDonalds developed its first mobile application for the public. Additionally, in 2011, McDonalds executives toured the earth to hear directly from consumers about their concerns (Alex, 2011). In the next part, we would like to offer our evaluations, pros and cons, of McDonalds strategies and tactics in handling the crisis.III EvaluationAs we could image, the sales of Happy Meals have been a large contributions to McDonalds daily revenue. Thus, if McDonalds had bemused the lawsuit, the company would have faced a really huge lost on its total profits and taken serious damage on its reputation. On the side of the organization change, we believe that McDonalds did quite well in th e face of the crisis. Organization crisis could be divided into three stages pre-crisis, crisis, and post-crisis (Miler, 2012, p187).In the pre-crisis stage, an organization should protect or prevent possible problems. It should make employees have a form of consciousness of crisis all the time. Indeed, McDonalds has always been accused of marketing unhealthy, greasy food to grownups, and exploiting children through advertising since 1960s (Cohen,2009,p8-6). As a leading company in fast food industry, adverse publicity always be the major problem for McDonalds. Still, McDonalds couldnt find a way to bring this problem at all. It is necessary that a company grow with self-awareness against any problem. After all, McDonalds had got unfavorable publicity in this event what had happened before.During the crisis stage, it is very important that the company should make correct and wise decisions in order to salvage the damaged reputation. As we said before, on one side, McDonalds proje cted itself as a company which was proud of its products and would vigorously defend its reputation in order to calm down concerned customers . On the other side, McDonalds denote that it would reduce the portion of French fries in every Happy Meal by half and replace them with apple slices. It even promised to start serving healthier food in the new Happy Meal to meet the nutrition standards. Indeed, McDonalds made very quick response to this event, and they also pointed out that parents could always choose not to buy happy meals for their kids instead of criticizing the corporations marketing strategies. After making the changes, McDonalds operation was not impacted too much.Lastly, in the post-crisis stage, company should take lessons from this and establish backup plans for exchangeable crisis which may happen in the future. Apparently, even after the crisis, Happy Meal was not banned. Furthermore, it has depart a huge hit for McDonalds and even made the company one of the wo rlds largest toy distributors. As a result, more and more companies wanted to corporate with McDonalds.For example, many animation film companies wanted to team up with McDonalds in order to take advantage of this fast food franchise huge market influence in promoting their movies. In sum, with its achievements overweight shortcoming, McDonalds had a good handle on the whole crisis. Nevertheless, even the crisis had passed, this leading fast food chain suffered from public criticism regarding its products. In the future, we believe that McDonalds should develop an effective strategy to help improve its brand image and a better risk management methodology to help mitigating coming crisis.In the next part of the paper, we want to offer our recommendation to help McDonalds better handling similar situation. Also, since we overall felt that McDonalds managed the crisis extremely well, we would like to recommend its strategies to be implemented to Jack in the Box, which faced a similar s ituation to McDonalds. However, unlike McDonalds which vigorously fight for the continuation of its using toys to push Happy Meal sales, Jack in the Box decided to drop toys in its Happy Meal when it was faced with the pressure from the public. We believe McDonalds implementation of strategic changes could have helped Jack in the Box to put toys back to its Happy Meal.IV Recommendation and ImplementationRecommendation for McDonaldsObviously, McDonalds managed the crisis really well. In fact, the nutrition of Happy Meal was improved as the calories were reduced substantially. Because the lawsuit was dismissed, McDonalds continued sell Happy Meal with toys. In the end, McDonalds didnt have to change its childrens influence strategy. Even though McDonalds made its Happy Meal healthier, we believe that their changes to the meal could be bigger, such as change the cheeseburger to a healthier burger with vegetable inside and make chicken nuggets with real chicken instead of minced meat. A lso, McDonalds could reduce the attraction to children or change a different way. For example, the fast food chain could design an advertisement to assist children to eat healthy, such as drink milk and eat fruit. Furthermore, McDonalds could optimize the influence aspect. For instance, McDonalds could use influence strategy to encourage more people to do charity and educate children to eat healthy and exercise frequently.Recommendation for Jack in the BoxIn 2011, under heavy publics criticism, Jack in the Box decided to stop giving out free toys with the purchases of Happy Meal. Obviously, the scale of the crisis faced by Jack in the Box was much smaller than that faced by McDonalds. However, we felt that Jack in the Box could benefit greatly by learning from McDonalds way of handling its crisis. We also have some recommendations for Jack in the Box based on the successful influence strategy of McDonalds. According to the survey, McDonalds Happy Meal accounted for about 10 percent of the chains U.S. sales in 2010. The sales of McDonalds Happy Meals alone were more than Jack in the Boxs total sales (Maureen, 2011).This fact showed us that the influence strategy used by McDonalds was extremely effective. A spokesman of Jack in the Box said that the franchises target customers were the frequent fast food consumer or adults from 18 to 34. Therefore, we recommend Jack in the Box to use the same influence strategy to their target customer. The fast food chain could also use emotion and/or ingratiation influence to attract customers. For example, Jack in the Box could design online games for adults who gained access to the games with free codes offered with purchases of Happy Meals. Moreover, the company could design a discount card for the customers who accumulate a certain sum of consumption.Unlike McDonalds which vigorously fight so that it could continue using toys to promote Happy Meal, Jack in the Box decided to drop toys in its Happy Meal when it was faced w ith the similar pressure from the public. We believed that many of the McDonalds organizational changes could be copied and apply in Jack in the Box. This would allow Jack in the Box to continue selling its Happy Meal with toys. For example, Jack in the Box could change the composition of Happy Meal toward a more healthier trendssuch as simplification the sodium content, sugars, saturated fats, and calories to its foods including vegetables and fruits in the menu and offering tea, juice, and milk as alternatives to the traditional soda beverages. Jack in the Box also needed to let its customers know of its commitment in making its products healthier.The reason provided by Jack in the Box regarding its letting go of Happy Meals toys was that it waned the Happy Meal to appeal to parents. Brian Luscomb, Jack in the Boxs spokesman, commented Rather than promote a toy weve focused on the quality of products in our Kids Meals, like a grilled cheese sandwich on sourdough, grilled or crispy chicken strips, or a hamburger. We believe that providing these kinds of options is more appealing to a parent than packaging a toy with lower-quality fare(Bernstein, 2011).However, we believed that Jack in the Box could benefit greatly from expanding its Happy Meals target market to include children. To achieve this, Jack in the Box would need to facilitate strategic changethe process of formulating, implementing, and evaluating decisions that enable an organization to achieve its objectives (Wong, Organizational change, 2012). In this case, the strategic plan would include extensive products innovation. For example, Jack in the Box could use popular toys and online games to attract children to its Happy Meal. The burger franchise chain could also demonstrate playgrounds inside its stores. This offered children with fun and healthy exercises.Implementation for Jack in the BoxAs we discussed above, Jack in the Box could drew on McDonalds successful tactics to appeal more customers to consume their products. We found McDonalds influence tactic could be successfully implemented on Jack in the Box due to two main reasons.The first reason is the industry similarity. Jack in the Box is one of the nations largest hamburger chains with more than 2,200 restaurants in 19 states. Also, just like McDonalds, Jack in the Box is also a member of the fast food hamburger restaurant (FFHR) industry. This is an industry characterized by high competitiveness and risk. Although Jack in the Box is concentrated on the West Coastprimarily in California, the competition is still intensive. In this industry, McDonalds is the only fast food chain to occupy nearly 13 percent of the US market (McDonalds Report, 2010). There is no reason that Jack in the Box could not benefit from learning from the market leader, McDonalds.The second reason is the easy-to-influence target customers. As we mentioned before, Jack in the Boxs target consumer are youth, aged 18 to 34. This group of customer is the most active part. They are independent buyers. This means that they could choose the thing they want without asking their parents permission or admission. Another character of this customer group is economic dependent. This group of customer typically has incomes and also can take charge of their money. The situation is much better than McDonalds children market.Also, this group customer of Jack in the Box likes keeping pace with the trend. We think if Jack in the Box could use the influence tactic cater to its target consumers, they could further expand their market share in the future. However, in implementing aggressive marketing strategies, Jack in the Box would certainly be criticized by the public. Still, we believed that if Jack in the Box continues making its Happy Meal healthier and supporting the surrounding community through various charity activitiessuch as donating part of its Happy Meals profit to children hospitals, giving free Happy Meals to the homeless, and so forth, it can enjoy increase profit and at the same time corroborate good public image.ReferenceAlex, M. (July 26, 2011). McDonalds Happy Meal to include sliced apples, less fries. Retrieved from http//www.christianpost.com/news/mcdonalds-happy-meal-to-include-sliced-apples-52867/gKDYWvXCIJGSO8g1.99Andrew, L. (July 28, 2011). 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