MNC's are complex organizations however, they dominate the worldwide market. Knowing the background and nature of MNC's, answer the following:
1. Identify the benefits and disadvantages of MNC's.
Multinational corporations can provide developing countries with critical financial infrastructure for economic and social development. However, these institutions also bring with them relaxed codes of ethical conduct that serve to exploit the neediness of developing nations, rather than to provide the critical support necessary for countrywide economic and social development.
With the realization that multinational corporations create such a mixed bag of pros and cons for developing nations, there is a clear impetus to examine what has been written about the advantages and disadvantages of these institutions. To this end, this investigation considers what benefits and problems are engendered when multinational corporations establish themselves in developing nations. Through a careful consideration of the benefits and drawbacks of these institutions, it will be possible to identify critical businesses standards that should be used by these organizations. Further, by examining the advantages and disadvantages of multinational corporations, recommendations for what role the American government should play in policing these organizations will be identified.
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2. Identify one MNC company and describe its operation.
McDonald's Corporation (NYSE: MCD) is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily.[3] McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts. More recently, it has begun to offer salads, wraps and fruit. Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables.
Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.[5]
McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.
To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.
3. Describe how the parent control/coordinates with its subsidiaries in other countries or region.
The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators.
4. How is IT maximized or used by this MNC?
5. WHat were the weaknesses/problems encountered by this MNC from its environment and global setup?
As a prominent example of the rapid globalization of American fast food industry, McDonald's is often the target of criticism for its menu, its expansion, and its business practices.
The McLibel Trial, also known as McDonald's Restaurants v Morris & Steel, is an example of this criticism. In 1990, activists from a small group known as London Greenpeace (no connection to the international pressure group Greenpeace) distributed leaflets entitled What's wrong with McDonald's?, criticizing its environmental, health, and labor record. The corporation wrote to the group demanding they desist and apologize, and, when two of the activists refused to back down, sued them for libel in one of the longest cases in British civil law. A documentary film of the McLibel Trial has been shown in several countries.
In 1999, French anti-globalisation activist José Bové vandalized a half-built McDonald's to protest against the introduction of fast food in the region.[16]
In 2001, Eric Schlosser's book Fast Food Nation included criticism of the business practices of McDonald's. Among the critiques were allegations that McDonald's (along with other companies within the fast food industry) uses its political influence to increase its profits at the expense of people's health and the social conditions of its workers. The book also brought into question McDonald's advertisement techniques in which it targets children. While the book did mention other fast-food chains, it focused primarily on McDonald's.
In 2002, vegetarian groups, largely Hindu, successfully sued McDonald's for misrepresenting their French fries as vegetarian.[17]
Morgan Spurlock's 2004 documentary film Super Size Me said that McDonald's food was contributing to the epidemic of obesity in society, and that the company was failing to provide nutritional information about its food for its customers. Six weeks after the film premiered, McDonald's announced that it was eliminating the super size option, and was creating the adult happy meal.
Anthony Bourdain on his show, No Reservations, has criticized McDonald's among other fast-food restaurants for its culinary blandness.
The soya that is fed to McDonald’s chickens is supplied by agricultural giant Cargill and comes directly from Brazil. Greenpeace alleges that not only is soya destroying the Amazon rain forest in Brazil, but soya farmers are guilty of further crimes including slavery and the invasion of indigenous peoples’ lands. The allegation is that McDonald's, as a client of Cargill's, is complicit in these activities.[18]
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