Category: McDonaldization of Society

The prosperity and the significant increase of fast food chains is now a correspondingly commonplace trend that symbolize the society we live in today. Society as a whole is propelled by concerns for heightened rationality, speed, and efficiency that we are able to witness in terms of the way the universally recognized fast food chain such as that of McDonald’s operates. Components such as food, packaging, and service are all devised to thrust customers at an efficient and cost worthy speed in and out of these restaurants, thus granting them a fleeting experience of the utmost modernity synonymous with contemporary society. Being able to have speed, convenience, and standardization has now replaced the desire such as that of comfortable interiors, friendly customer service, availability of options, etc. McDonalds has now extended “Far beyond its point of origin in the United States and in the fast-food business. It has influenced a wide range of undertakings, indeed the way of life, of a significant portion of the world’ (1).

In the book ‘The McDonaldization of Society’, this symbolization I mentioned earlier is further explained by author George Ritzer who describes the term McDonaldization as “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world” (1). In this regard, Mcdonaldization success has allowed the chain to grow so omnipresent, if you were to venture virtually anyplace in the world there will be a variety of instantly recognizable chain restaurants, stores, hotels, and other familiar institutions of commercial exchange. From this, a resulting effect is the increased consisty of society’s culture and life, alongside a set of rational, efficient, and impersonal principles.

McDonald’s can credit its success “because it offers consumers, workers, and managers efficiency, calculability, predictability, and control” (14). One of the most ubiquitous factors of those four, and the focus of my paper, is the principle of efficiency.

Ritzer states that efficiency is “the optimum method from getting to one point to the other” (14), in other words, in implementing the use efficiency, businesses and organizations can constitute a multitude of tactics to create a more convenient environment for their customers. If you were to compare back to 50 years ago, life as of now is unquestionably more convenient. If we were to look from fast-food to even online classes, an individual’s demands can bet met in the most advantageous time achievable. Even though the principle of efficiency has mainly became popularized through fast-food chains and moreover, businesses who have now implemented efficiency in hopes of obtaining their share of success likewise to McDonalds. Owing to the cost effectiveness in addition with the capability to further expedite operations and customer satisfaction, a multitude of companies have acknowledged the benefits of efficiency in order to be able to establish business continuity.

Within the book, Ritzer describes the principle of efficiency and how it is a significant facet of mcdonaldization. He mentions examples in where the use of efficiency occurs from education and entertainment to hospital and even church services. Although Ritzer does not really delve into the pros and cons efficiency has on contemporary society, he acknowledged a few complications that concern the consumer. He argues that “for increasing efficiency in a McDonaldized world is to put customers to work” (70), which results in consumer restrictions and limitations. Consumers will have to customarily follow by a business’s menu and standards for improved efficiency. A case in point illustration of this is when “customers with the temerity to ask for a less well-done burger or well-browned fries are likely to cool their heels for a long time waiting for such ”exotica” (69).

Granting all this, although a multitude of businesses and organizations accordingly stand by the rules of efficiency, consumers can no longer make personalized requests to cater to their tastes. A observation of this is where the customer is required to do the work for instance, “McDonald’s came up with the slogan we do it all for you in reality at McDonald’s we the customers do it all for them” (70). In this regard, the consumer is presumably expected to wait in line, place their own order, clean their area, etc.

Forever 21 has been one of the largest fast-fashion companies within the last decade. Recently, the company has announced its decision to file for bankruptcy to resolve financial difficulties that have affected the company for some time now. The enactment of bankruptcy for this organization could provide a clean slate for the company. According to Linda Chang, the Vice President of the Forever 21 company “bankruptcy was “a strategic move on our part”(Maheshwari 2019). However in accordance with Pfeffer and Salancik Resource Dependency theory and George Ritzer’s Mcdonaldization theory, the enactment of the bankruptcy process within the Forever 21 organization could have been avoided. Based on the theories of Pfeffer, Salancik and George Ritzer the organizational change that has taken place within Forever 21 can be implemented to provide a proper solution for this organization.

The Forever 21 organization has been a leader in the clothing industry for over a decade. Forever 21 “was far from a run-of-the-mill family operation. At its peak, the retailer brought in more than $4 billion in annual sales and employed more than 43,000 people worldwide”(Maheshwari 2019). Because Forever 21 is such a large company, the rumors for the possible enactment of bankruptcy was not seen as a real threat. Unfortunately for the company, “Forever 21’s missteps, combined with industry-wide changes in consumer tastes and shopping habits, will have far-reaching effects” (Maheshwari 2019). This decision to file for bankruptcy can have drastic effects on not only the company itself but their employees as well. 43,000 workers depend on Forever 21 for their income and livelihood. This drastic change within the company was something that was not anticipated by such a large successful clothing organization. There must be another way to save this company instead of resorting to bankruptcy.

Pfeffer and Salancik were both American theorists who co-wrote the novel The External Control of Organizations: A Resource Dependence Perspective. Both Pfeffer and Salancik believed in the idea that “To understand the behavior of an organization, you must understand the context of that behavior-that is, the ecology of the organization” (Pfeffer and Salancik 1978). It is this understanding that can shed light as to why the Forever 21 organization has not been as successful in recent years. Pfeffer and Salancik’s Resource Dependency Theory can analyze the bankruptcy process within Forever 21. Resource Dependency theory is a process within organizations that illustrates how “organizations are embedded in an environment comprised of other organizations. They depend on those organizations for the many resources they require.”(Pfeffer and Salancik 1978). As each organization is focused within these external environments, it is the surroundings that can have a direct correlation to the outcome of the organization itself. Pfeffer and Salancik illustrate this with the Resource Dependency Theory. For survival, each organization depends on the other organizations around it. According to Pfeffer and Salancik “ the key to organizational survival is the ability to acquire and maintain resources. This problem would be simplified if organizations were in complete control of all the components necessary for their operation”(Pfeffer and Salancik 1978). The Resource Dependency Theory is clear in this essence that organizations need to acquire outside resources for them to be successful in their environments. Too much dependency on a single resource can ultimately lead to the elimination of that said resource. In turn, this creates an ongoing toxic cycle where organizations are taking on each other. This idea can further be illustrated with a statement made in Pfeffer and Salancik’s piece where “environments can change…and the supply of resources becomes more or less scarce. When environments change, organizations face the prospect either of not surviving or of changing their activities in response to these environmental factors”(Pfeffer and Salancik 1978). As these supplies of resources become more and more scarce the vicious cycle further continues. This toxic cycle of resource elimination is part of the reason why the Forever 21 company has been burdened with millions of dollars of debt. Pfeffer and Salncik’s theory can aid in the development as to why bankruptcy has been the organizations final choice in saving its company.

Forever 21 filed for bankruptcy on September 29th, 2019. Part of the reason for this sudden organizational change was the large amount of rent debt that the company owed to a surplus of vendors. In September,“when [Forever 21] filed, the company owed $347 million to its vendors” (Maheshwari 2019). The Resource Dependency Theory in summary states that organizations thrive on the success of other organizations. Forever 21 continuously chose to invest within malls and open up large retail stores in various locations throughout the world. However, there has been a dramatic decerase in the success of malls during the last decade. There has been a “cited shift in mall traffic and the rise of e-commerce…[has become a] challenge” (Maheshwari 2019). So why did Forever 21 continue to invest millions of dollars into mall stores and merchandise? There competitors had managed to leave low profiting malls and focus their marketing on the ever increasing ecommerce trend. Yet Forever 21 has failed to acknowledge this shift from in-person shopping to a primarily online shopping method of retail commerce. As a result, the organization has seen a dramatic decline in sales and unfortunately resulted in the inability to pay their rental leases. The Forever 21 company has been blind to the environmental changes that have taken place within this organization’s surroundings which is a key element in understanding Pfeffer and Salncik’s theory. If Forever 21 would have analyzed how other contemporary organizations have been functioning within the last few years, there is a large possibility that this organization would not have to file for bankruptcy. Unfortunately, “Forever 21 made its biggest mistakes in real estate. In the years before and after the recession, the company expanded aggressively and decided to open huge flagship stores” (Maheshwari 2019). If the Forever 21 organization would have depended on the current environment of similar organizations like this company, they would have been able to survive. Pfeffer and Salancik clearly illustrate that organizations need to depend on one another to generate success. Forever 21 has a history of being autonomous and not allowing outside sources to intervene with their business. This lack of dependency is the reason as to why they are filing for bankruptcy now despite all the years of success. Their environment has begun a shift and they failed to accept this change.

George Ritzer was also an American theorist who wrote the novel titled The Mcdonaldization of Society 6. George Rirzer’s ideas and theories, like his Mcdonaldization policy, goes hand in hand with Max Weber’s ideals and his viewpoints of society. George Ritzer and his Mcdonaldization theory can help illustrate the problems within the Forever 21 through the lense of a fast food company. Ritzer’s Mcdonaldization theory is “the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world”(Ritzer 2011). This process explains the rise in efficiency within contemporary societies. Companies throughout the modern world have adopted this process due to the amazing success that companies like Mcdonald’s have had in society. Ritzer’s Mcdonaldization theory also has a subcategory called disenchantment. This is the idea that “anywhere you go in the United States, and increasingly throughout the world, you are likely to find the same products offered in the same way” (Ritzer 2011). Unfortunately for many organizations within contemporary society, there is a visible lack in the amount of differentiation available between organizations. As a result, even the products available can ultimately become just as disenchanted as the organization in which they derive from. George Ritzer also argues that “Mcdonaldization [overall] works against enchantment…anything that is magical, mysterious, fantastic, dreamy, and so on is considered inefficient…. [this] elimination… is one of the reasons that Weber saw rationalized systems as disenchanted systems” (Ritzer 2011). As this rationalization process eliminates these aspects in society, a majority of organizations continue to remain very similar to their competitors and even other organizations. The question here is why are the organizations that are capable of standing out and having the enchanted properties are seen as inefficient according to Ritzer? An answer to this would be that enchantment and focusing on the “magical” properties of an organization might take away from the mechanistic functions of an organization. There would be too much focus on the stylistic properties and very little focus on how this organization can function in the most economically feasible ways possible. The implications of George Ritzer’s Mcdonaldization theory can be further explained with the current organizational change within Forever 21.

George Ritzer’s aspect of Mcdonaldization and the disenchantment that has taken place within the Forever 21 organization can also be analyzed regarding their recent file for bankruptcy. Forever 21’s lack of uniqueness had contributed to their lack of sales and loss of consumers within recent years. “Forever 21 said in the filing that most of its international locations were unprofitable as of 2015 and that its stores in Canada, Europe, and Asia were losing an average of $10 million per month in the past year”(Maheshwari 2019). The reason for the loss of 10 million dollars? There is a continuous problem that Forever 21’s marketing strategies remain very similar to their competitors. This organization thrives on imitating popular styles and fashion trends, yet fails to realize that this company is not the only company selling the same pair of blue jeans or same graphic tee. “The retailer… raced into[these] expensive, massive new stores overseas…the chain often did not understand local labor laws and made mistakes… It didn’t help that many of these areas were familiar turf for H&M…and Zara”(Maheshwari 2019). These large stores like H&M and Zara have been large clothing companies that have dominated countries overseas for years. Forever 21 taking the initiative and stepping into these areas to “take some of the wealth” was another very big mistake made by this company. George Ritzer illustrates in his views of disenchantment the lack of individuality among companies. Having a third company coming into an area where already two large clothing stores are competing one another does not make sense to take on. The world needs uniqueness and variation, especially when it comes to clothing and individual style. Forever 21 simply does not offer anything different than these opposing organizations.

The organizational change that is taking place within Forever 21 ultimately could have been avoided. If the organization would have implemented Pfeffer and Salancik’s Resource Dependency theory the company would not have been in debt of millions of dollars from rental fees. If Forever 21 was able to understand George Ritzer’s Mcdonaldization theory and the aspects of it maybe the company could have taken extra steps into becoming unique instead of following the same paths as their competitors. If Forever 21 was able to revisit their rental process and depended on other companies like themselves, this organization could have seen the shift from in person shopping to ecommerce. With the implication of these two theories, the success of the Forever 21 clothing organization could be a reality. The company overall is completely autonomous and unopened to outside reform. The enactment of bankruptcy for this company was ultimately a matter of self-destruction. The idea of shopping now is no longer primarily done at a shopping mall or retail store. Due to the development of technology and other online retailers like Amazon, eBay, Fashion Nova and other large scale retailers have quickly become a powerful organization that cannot only provide a surplus of goods but is available 24/7 for all customer needs. Based on George Ritzer’s ideals, society is quickly becoming more efficient as the decades progress and more closely related to a “McDonaldized” society. Bankruptcy for the Forever 21 company is not an optimal solution. It will not provide a clean state for the company and nor will it be a permanent eraser for the organization’s current financial issues. Society has the tools available to aid this organization into success. All it takes if for the hierarchy of this company to sit down and realize what must be implemented to appropriately benefit this organization. If the company chooses to remain isolated and closed off to the ever-changing world, this large fast-fashion company will never be able to survive.

The Rise and Challenges of Uber: A Case Study in McDonaldization

Uber is a massive company that was launched in 2012 and has changed the way people travel by car. Uber is a modern day alternative to taxi cabs that lets you request car service through an app on your phone. Uber is different than traditional taxis because the uber drivers do not have special licenses because they use their own personal vehicles. It can be entirely cash-less with your credit/debit card information already programmed into the app. In order to use the app you must be 18 years old or over. While it undeniably has been one of the most popular car transportation services, lately the company has been dealing with some setbacks. Within in the last year, Uber has had to layoff many employees from different divisions of the company because of how much money they are losing. This organizational change is a big disturbance in the company. Since July of this year alone, the company has cut over 1,000 jobs which is “more than 2 percent of its workforce”(Conger 2019). Some of the divisions affected in the company include the marketing department, engineering and product groups. In the most recent layoff round, they focused primarily on “the autonomous vehicle unit, operations, recruiting, and customer support”(Cogner 2019). Dara Khosrowshahi is the chief executive at Uber and he issued each department head to make the cuts. The reason this company is losing money seems to be because it “had gone off course as it grew”(Cogner and Isaac 2019). Uber developed a self-driving car unit called Autonomous Technology Group(ATG) that cost $7.25 billion dollars. This type of innovative technology is risky and it has caused them a great loss rather than promising gain. Uber also had to settle many lawsuits recently relating to theft and “attempted theft of trade secrets from Google”(Cogner 2019).This car service company has been trying to branch out into more innovative projects which is costing them and their employees. Uber’s organizational structure follows modern day hierarchy. Superiors and subordinates is how this company functions smoothly. This company is a modern day bureaucracy, with a focus on efficiency, hiring experts for each division of labor, and clear rules set for how to do certain jobs. Bureaucracy is also tied with McDonaldization as a more prominent theory in today’s society. McDonaldization has four dimensions that can be applied to the company, Uber. This theory can be seen in almost every aspect of people’s everyday lives too. Its main focus is all about rationalization even though irrationalities emerge all the time. Ritzer’s “The irrationality of rationality”(pg.1) promotes inefficiency which is the exact opposite of what McDonaldization is trying to do.

Understanding Bureaucracy in Modern Organizations

Bureaucracy is implemented into modern society in organizations like the government or companies like Uber. Put simply, a group of people usually the leaders or the head of the organization make official decisions which are then turned into laws or rules of that institution. Bureaucracy is supposed to be an efficient process that everyone in the workplace follows. Max Weber was a German sociologist and economist who focused on bureaucratic theory, he believed that it was “the most prevalent organizational form in modernity”(Rotondi) Weber had 8 different qualities that described modern day bureaucracy. The first one is“governed by a set of impersonal rules”(Rotondi). These impersonal rules allow for a relationship with the organization rather than the person or worker for functional purposes. The second quality is “extensive use of written documents and file keeping”(Weber 1978:2). Without these two things there would be no record of rules, regulations, safety protocols, employment records, etc; all of which is essential to the institution for many kinds of purposes. In today’s advanced society however most places do not keep written documents anymore, almost everything is digital now. Although these important matters are now on a computer, this does not stray from the bureaucratic quality Weber discussed. The third quality is “these rules are universally applied(not based on personal influence)”(Rotondi). The rules of a bureaucratic organization are not supposed to be questioned, if the rules are set in place it is because someone at the top of the hierarchical chain believes it is essential for optimum function and efficiency of the institution. Rules are not to be made based on what the person feels is personally correct or else that disrupts the focus on the organization’s productivity. The fourth one is “employ technically qualified, full-time, experts assigned to a specific division of labor”(Rotondi). These people are crucial to the working order of the organization because if you do not have experts working on certain jobs then there is no way to get anything done. It is also important to have the best experts in the field so that your company can be number one in selling/promoting or whatever the goal may be in relation to companies who do similar things. The fifth quality is “hierarchy of superiors and subordinates”(Rotondi). Hierarchy is fundamental in bureaucratic places. There are levels of people ranked one above the other. The leader of the organization is at the very top and then it goes lower into upper management, maybe even lower management, all the way down to the workers on the floor. These clear distinctions of status lets people know who is in charge and who takes orders. The sixth quality is “subordinates obey superiors because of their office, not the person”(Rotondi). The office in this case refers to the status or title a person has because of their job. Anyone who is qualified can be in the position of upper management and it does not matter who that person, as long as they continue to have that high status, the subordinates will adhere to them. The seventh quality is “promotion is based on testing on technical skills and knowledge(merit)”(Rotondi). The best way to move up the hierarchical ladder is to display your extensive knowledge of the job at hand. Having better skills than other people around you can intrigue upper management and decide to give a promotion to the employee. However many leaders promote because of patrimonialism meaning the son inherits the father’s position no matter if they possess the skills necessary for the job. The last bureaucratic quality is “personal property is separate and distinct from organizational property”(Rotondi). This essentially means that personal life and work life should not mix. There should be a clear difference in what is personal that should be dealt with outside the organization and what is strictly work. However, this is almost never the case because of how often we see personal and organizational property/business mixing. According to Weber, bureaucracy is the best kind of organization there is. This is because it is technologically superior in terms of “precision, speed, unambiguity, strict subordination”(Weber 1978:9) and more. Bureaucracy does a great job at dehumanizing people because it wants emotion and personal thought out of the workplace and only logical ideas for optimum efficiency, it is a purely objective organization. Bureaucracy does not just take over companies but almost all aspects of life as well and there is almost no stopping it once it is in place.

Introduction to McDonaldization and Its Impact on Modern Companies

McDonaldization is a theory coined by sociologist, George Ritzer that states “the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world”(Ritzer pg.1) McDonaldization is recognized by its dimensions which include efficiency, calculability, predictability, and control. Efficiency is being able to get something done well with minimum effort and time. An example would be putting on the GPS before your drive to get to your destination by the most optimum method. Calculability is “quantifying the aspects of products sold and services offered”(Ritzer pg. 8) This dimension looks at time and money for an individual. The customer wants the product in as much abundance as possible in the fastest amount of time like drive thru vs sitting down at eating vs food delivery. The customer also factors in how much the product is going to cost and if it is worth the price to get said product. This can also look at workers who do a lot of laboring tasks for very little pay. Predictability is very straightforward in its definition in that it something happens exactly the way it was expected to. In relation to McDonaldization, “products and services will be the same over time and in all locales”(Ritzer pg.8) A pumpkin spiced latte from Starbucks in Riverside will be the same latte in a Canada location. According to Ritzer this provides satisfaction and comfort because people like knowing what they are getting over and over again without any surprises. The last dimension is control and this is “exerted over the people who enter the world of McDonaldization”(Ritzer pg.9). When you walk into a restaurant, you can only choose from the menu they put in front of you and only sit at tables that the waiter walks you to. In terms of the workforce, workers only do tasks in certain ways and it is the presence of hierarchical authority that reinforces them.

The Irrationality of Rationality: Contradictions in McDonaldized Systems

McDonaldization has a concept called the irrationality of rationality. This states that rational systems become irrational or have irrationalities making the systems no longer rational. This is a huge disadvantage of the McDonaldization theory because it is basically the opposite of what it is trying to accomplish. Irrationality looks at different aspects like inefficiency, high cost, false friendliness, disenchantment, health and environmental hazards, homogenization, and dehumanization. Inefficiency occurs because of how busy and big a company can get leading to human errors. High cost can mean paying 30 dollars for a meal out where you can take that same money for groceries and make more than a single meal. False friendliness is expressed in almost every employee, especially a temporary minimum wage job. This can mean saying “hello, how are you” with a smile even though you do not care at all but you just want to show that the company cares for each individual. Disenchantment is the magic or uniqueness loss because of how sensible, standard, and concise everything is turning out to be. Almost everyone eats things that we know are not healthy for us but because its cheap, convenient, and tasty we cannot seem to give it up. The environment is in great danger because of human activities, especially meat production because that leads to “climate change, water and air pollution”(Ritzer pg.6). Homogenization is recognizing and engaging in things from home even though you are in a different city or country. Lastly, dehumanization looks at employees working jobs with barely any skill involved and low pay. Knowing you are very easily replaceable by another person is dehumanizing. Workers engaging with customers but not actually being invested/caring is also dehumanizing.

Uber is a modern day bureaucracy with a clear hierarchical ladder in place. As of recent Uber’s bureaucracy is failing because it is no longer being efficient by losing so much money because of risky endeavors rather than just people driving other people around. Dara Khosrowshahi is Uber’s chief executive and he controls and rules over all the other smaller executives and floor workers. The first bureaucratic quality can be applied here because this type of company is all about following the rules for efficient progress with little social mingling. The layoff surprisingly is an efficient method in letting the company progress forward to focus on future projects. In today’s modern world all the important documents are on laptops and computers and Uber is all about advancement and technology. In relation to the third quality, Uber’s executive gave the order to fire staff based on improving performance in the workplace, not based on any personal notion. Uber has specific divisions to divide and tackle labor and they hire experts in their field to complete these jobs, like engineering experts for their ATG. The workers and their immediate supervisors were shocked by the layoffs because they were given no warning and no real clear details. Hierarchy is bureaucracy’s structure and it can mean a lot of information is not passed down. No one questions hierarchy in this company, when your boss or leader says to get something done, it gets done no questions asked. The lower executives followed the orders of Khosrowshahi not because of who he is as a person but because he holds the title chief executive also known as CEO.

Uber as a Model of McDonaldization and Bureaucracy

Uber is a McDonaldized system that follows the main dimensions discussed previously. This company has been anything but efficient lately in terms of profit gain however, Uber strayed from its original path to branch into other areas of business like UberEats, UberFreights, and the ATG. The main reason they lost so much money was because of their ATG project. Uber misjudged calculability in terms of how much it would cost the company resulting in many layoffs and theft and trade secrets also lost them more money. They calculated that the benefits should outweigh the costs but they were mistaken and engineering, marketing, customer support, and more suffered for it. In terms of services offered, “Uber’s ride-hauling business”(Cogner 2017) is the main focus along with other popular services like Eats and Freights. No matter what Uber driver you get, the structure and experience is essentially the same every time, you get in either say nothing or very little small talk and then you get out once you have arrived at your destination. Uber controls customers by letting them request drivers but not being able to pick them. UberEats only has certain restaurants available on the app so you have a very limited section to choose from. Uber’s rational system becoming inefficient is highly irrational. In relation to high cost Uber can be more expensive in certain cities versus taking a taxi or driving yourself. Since they have been inefficient lately in wanting to become more of a “massive revenue generator”(Rotondi) they are hurting themselves in hopes that their new product works and sells. Uber is trying to get back on track after these layoffs in these last few months. Mr. Khosrowshahi is now trying to rationalize why they had to let people go, he said “in the past, we grew our teams rapidly and in a decentralized way”(Cogner and Isaac 2019). He solely wants to focus on being an efficient organization again without any mystery or magic(Ritzer pg.4) therefore highlighting the disenchantment concept of irrationality. The dehumanizing aspect of McDonaldization is inevitable if this company truly wants to be efficient. These people who were fired just to have the hiring freeze be lifted soon after and be replaced by another person with the same credentials makes them feel easily replaced and unvalued.

“Internationalization is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures, a process called localization.” -Margaret Rouse, A “Firm” Step.

“Internationalization is the growing tendency of corporations to operate across national boundaries.” -Alex Wilson, Tackling Bigger Markets.

Internationalizing firms tend to start their expansion into culturally close countries before expanding further.

Introduction

The establishment of a firm is always carried out with a stable growth in mind. This thought process is the impetus for any hardworking and focused team. “Businesses are quite linear in terms of their operation, the cost incurred has to be met with profit or a break even result.” Brian R. Cheffins, (2008), “Corporate Control”, Corporate Ownership and Control, pp. 81. The same way firms tend to start their expansion into culturally close countries first.

Running a firm is no cake walk as there are risks at every corner and the payoff is never huge in the beginning. Millions of firms often ponder over what is the best step to take when they are thinking of establishing themselves in the market. Establishing yourself in the market is bifurcated into two- Local Markets and Global Markets. “When you talk about expanding globally you can either gamble and jump into unknown waters or play it safe and expand in culturally close countries”. Mark Hirschey, (2009), “Effective Management”, Corporate Governance and Firm Performance, pp. 137.

Switching across international markets is quite tough and comes with a lot of liabilities and the payoff is rarely beyond the costs incurred. One has to really be pragmatic and understand the market trend and what would be the best time to jump in the business.

Age-old practice

Targeting culturally close countries is an old practice followed till date as it has worked. The reason for this action plan is that for example, the firm will realize its success or failure if it experiments in the culturally closer countries. This is because these specific countries act as a yardstick to how far the firm can flourish or how much work still needs to be done for it to take off.

It’s imperative that they concentrate their finances towards these selected countries, the results will be quicker, it will be easier to identify areas that need to be worked on and areas that have reaped good profit.

The firm should always look for a singular objective, a singular objective plan can fail and result in the decline of the employee’s morale. Equity, Goodwill and Profit are the barometers which define a successful venture.

The benefit of a trial and test method in these culturally close countries makes it easier for the firm to establish themselves. A successful establishment in these countries will propel the firm towards unknown land to expand in. ‘The trade might look down upon this practice and it might come off as weak or the firm is doubting itself but usually it’s the other way around’, Steve Baumgardner & Marie Crothers, (1994), ‘What Matters To People’ Positive Psychology, pg. 124. Firms just want a good and safe start so that they can build further.

Trial and error method

Firm’s expansion towards these countries familiarizes them with all the sectors that are a safer bet, they get to know what areas can they invest in, how to create a better flow for goods and services that are provided under their umbrella. ‘A firm’s inflow of cash with goods exchanged and services plots a graph on how well the company can survive under pressure in foreign markets.’ Brad Feld and Jason Mendelson, (2011), ‘The New Age Model’, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, pg. 111.

Though this action plan can often be criticized due to its “playing safe” nature, it has a lot of benefits and a good share of setbacks as well. Setbacks can range from not experimenting in new markets which can reduce the chances of having a monopoly period for the firm. Not experimenting reduces the risk taking ability which will again reduce the firm’s confidence.

When you venture into new markets, especially foreign markets you get to learn the new trade and get well versed with how the business works.

However the firm before expanding into culturally close countries must evaluate itself, expanding and establishing themselves in these countries can give a false confidence which can be harmful and the firm can create action plans according to the influence favorable results.

I personally believe this process of expanding in culturally close countries is a great action plan and often a default procedure for many firms.

McDonaldization

A better way to understand this aspect is through the popular phenomenon “McDonaldization”

Sociologist George Ritzer developed this term in his book “The McDonaldization of Society” in 1993. Ritzer McDonaldization is when the society starts adopting the norms and rules of a fast-food restaurant, an example here is McDonalds.

Ritzer says that the concept of McDonaldization is roughly based around being rational or pragmatic towards change and observing new methods. Max Weber used a different model and approach to talk about the changing society, Ritzer differs with Weber here and considers this concept as the ultimate global paradigm. George Ritzer, (1993), ‘Deep Dive’, The McDonaldization of Society, pg. 51.

The process of McDonaldization is very simple in its first look, it talks about building a global franchise by subliminally manipulating the audience into believing what works and what’s new in the market. When you even talk about any other fast food joint, you can observe the same nature and trends.

This example is a benchmark for the concept of internationalizing firms. You start a business in a familiar place, you adopt all the different qualities and strong areas to build in; start applying the observation into a new country. This can cause a snowball effect which can be the make or break for some firms. It can be a straight gamble; the firm can flourish with this static method of establishment or the firm can fail miserably leaving the market dead.

McDonaldization made things clearer for how the human psychology can be manipulated and modified to adapt to big corporates, they twisted the system around. Earlier the public used to be responsible for creating a demand but George Ritzer believes that the characteristics of fast-food restaurant have been subliminally inserted for the public to accept.

Observing the market

McDonald’s as a fast food company left itself open to adopting and absorbing all the various choices demanded by their customers. ‘McDonald’s started with Beef and Pork, two Non-Vegetarian items outside India. It observed that India is not comfortable to accept the availability of Beef and Pork in a fast food joint next to them’. Rajendra Sisodia, (2003), ‘Tackling Simplicity’, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, pg. 91.

Indian citizens practice different religions in the country, McDonald’s new that these two items would not work as entities in the fast food market, so they came up with the second most consumed meat and vegetable, Chicken & Potato.

As a result the fast food outlet became a huge success and is still running swiftly in the country. If you want to build a successful business you have to listen to the public and observe how they respond to goods and services provided to them.

“It’s easier for the firm to research the market and make changes or modifications to what they were offering. After launching into a safe market i.e. culturally similar country, the firm just has to observe and critically evaluate all the areas”. Eric Ries, (2011), “Uncovering Simple Truths”, The Lean Startup, pp. 294.

This final step will reveal new areas to experiment in, where the firm has a stronger presence and which area needs more work. The obtained data after evaluation always makes it easier for everyone to be on the same picture.

Conclusion

After evaluating this method of expanding business we can conclude that, this process is highly imperative for firms as it helps them step into newer markets with bigger competitors and helps them survive. It breeds the ability to take risks in the future, many firms often pullback in future ventures or become more careful if they fail at their first venture.

“Online platforms have adopted this method of providing goods which resonate with indivuals cultruallly and it reaps big reward as goodwill and customer satisfaction”. David Maister, (1993), “Where to Start?”, Managing the Professional Service Firm, pp. 229.

This rational approach is practical and often easier to implement in the market.

“Countries which have more in common with the business are more welcoming and easier to build relationships in, whereas new markets are tougher to crack and in the long-term sufficient finance is required to keep the process going.” John Doerr, Lee W. Frederiksen, and Mike Schultz, (2009), “Simple Concepts”, Professional Services Marketing, pp. 247.

Curating goods and services keeping the public in mind is an almost guaranteed advantage but how to make your service standout in this common path is the real challenge.

It’s an age-old practice done by numerous companies, firms and corporations. Having a certain comfort level gives the firms time to plot out the next step and firms also hire expats to get a better insight into the country which aligns to the firm’s area of work. This process has reaped great benefits and there’s nothing to lose when you try internationalize a firm in a culturally close country before expanding to foreign markets.

References

1. Brad Feld and Jason Mendelson, (2011), ‘The New Age Model’, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, pp. 107-129.
2. Brian R. Cheffins, (2008), “Corporate Control”, Corporate Ownership and Control, pp. 78-94.
3. David Maister, (1993), “Where to Start?”, Managing the Professional Service Firm, pp. 218-231.
4. Danny Miller, (2005), “Equating it with Success”, Managing for the Long Run, pp. 171-189.
5. Eric Ries, (2011), “Uncovering Simple Truths”, The Lean Startup, pp. 291-305.
6. George Ritzer, (1993), ‘Deep Dive’, The McDonaldization of Society, pp. 48-52.
7. John Doerr, Lee W. Frederiksen, and Mike Schultz, (2009), “Simple Concepts”, Professional Services Marketing, pp. 241-252.
8. Mark Hirschey, (2009), “Effective Management”, Corporate Governance and Firm Performance, pp. 133-146.
9. Rajendra Sisodia, (2003), ‘Tackling Simplicity’, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, pp. 84-101.
10. Steve Baumgardner & Marie Crothers, (1994), ‘What Matters to People’ Positive Psychology, pp. 120-146.
11. Margaret Rouse, (2012), “Relevance in the New Age”, A “Firm” Step, pp. 84-102.
12. Alex Wilson, (2014), “Modernization – Pros and Cons”, Tackling Bigger Markets, pp. 50-62.

Internationalizing firms tend to start their expansion into culturally close countries before expanding further.

The establishment of a firm is always carried out with a stable growth in mind. This thought process is the impetus for any hardworking and focused team. Businesses are quite linear in terms of their operation, the cost incurred has to be met with profit or a break even result. The same way firms tend to start their expansion into culturally close countries first.

Running a firm is no cake walk as there are risks at every corner and the payoff is never huge in the beginning. Millions of firms often ponder over what is the best step to take when they are thinking of establishing themselves in the market. Establishing yourself in the market is bifurcated into two- Local Markets and Global Markets. When you talk about expanding globally you can either gamble and jump into unknown waters or play it safe and expand in culturally close countries.

Switching across international markets is quite tough and comes with a lot of liabilities and the payoff is rarely beyond the costs incurred. One has to really be pragmatic and understand the market trend and what would be the best time to jump in the business.

Targeting culturally close countries is an old practice followed till date as it has worked. The reason for this action plan is that for example, the firm will realize its success or failure if it experiments in the culturally closer countries. This is because these specific countries act as a yardstick to how far the firm can flourish or how much work still needs to be done for it to take off.

It’s imperative that they concentrate their finances towards these selected countries, the results will be quicker, it will be easier to identify areas that need to be worked on and areas that have reaped good profit.

The firm should always look for a singular objective, a singular objective plan can fail and result in the decline of the employee’s morale. Equity, Goodwill and Profit are the barometers which define a successful venture.

The benefit of a trial and test method in these culturally close countries makes it easier for the firm to establish themselves. A successful establishment in these countries will propel the firm towards unknown land to expand in. The trade might look down upon this practice and it might come off as weak or the firm is doubting itself but usually it’s the other way around. Firms just want a good and safe start so that they can build further.

Firm’s expansion towards these countries familiarizes them with all the sectors that are a safer bet, they get to know what areas can they invest in, how to create a better flow for goods and services that are provided under their umbrella. A firm’s inflow of cash with goods exchanged and services plots a graph on how well the company can survive under pressure in foreign markets.

Though this action plan can often be criticized due to its “playing safe” nature, it has a lot of benefits and a good share of setbacks as well. Setbacks can range from not experimenting in new markets which can reduce the chances of having a monopoly period for the firm. Not experimenting reduces the risk taking ability which will again reduce the firm’s confidence.

When you venture into new markets, especially foreign markets you get to learn the new trade and get well versed with how the business works.

However the firm before expanding into culturally close countries must evaluate itself, expanding and establishing themselves in these countries can give a false confidence which can be harmful and the firm can create action plans according to the influence favorable results.

I personally believe this process of expanding in culturally close countries is a great action plan and often a default procedure for many firms.

A better way to understand this aspect is through the popular phenomenon “’McDonaldization”

McDonaldization is a term developed by sociologist George Ritzer in his book “The McDonaldization of Society” (1993). For Ritzer McDonaldization becomes manifested when a society adopts the characteristics of a fast-food restaurant.

McDonaldization is a reconceptualization of rationalization and scientific management. Where Max Weber used the model of the bureaucracy to represent the direction of this changing society, Ritzer sees the fast-food restaurant as a more representative contemporary paradigm.

The process of McDonaldization can be summarized as the way in which ‘the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world.’ The McDonaldization thesis in its cultural version is a comparatively recent idea about the worldwide homogenization of cultures due to globalization.

This example is a benchmark for the concept of internationalizing firms. You start a business in a familiar place, you adopt all the different qualities and strong areas to build in; start applying the observation into a new country. This can cause a snowball effect which can be the make or break for some firms. It can be a straight gamble; the firm can flourish with this static method of establishment or the firm can fail miserably leaving the market dead.

McDonaldization made things clearer for how the human psychology can be manipulated and modified to adapt to big corporates, they twisted the system around. Earlier the public used to be responsible for creating a demand but George Ritzer believes that the characteristics of fast-food restaurant have been subliminally inserted for the public to accept.

McDonald’s as a fast food company left itself open to adopting and absorbing all the various choices demanded by their customers. McDonald’s started with Beef and Pork, two Non-Vegetarian items outside India. It observed that India is not comfortable to accept the availability of Beef and Pork in a fast food joint next to them.

Indian citizens practice different religions in the country, McDonald’s new that these two items would not work as entities in the fast food market, so they came up with the second most consumed meat and vegetable, Chicken & Potato.

As a result the fast food outlet became a huge success and is still running swiftly in the country. If you want to build a successful business you have to listen to the public and observe how they respond to goods and services provided to them.

It’s easier for the firm to research the market and make changes or modifications to what they were offering. After launching into a safe market i.e. culturally similar country, the firm just has to observe and critically evaluate all the areas. This final step will reveal new areas to experiment in, where the firm has a stronger presence and which area needs more work. The obtained data after evaluation always makes it easier for everyone to be on the same picture.

After evaluating this method of expanding business we can conclude that, this process is highly imperative for firms as it helps them step into newer markets with bigger competitors and helps them survive. It breeds the ability to take risks in the future, many firms often pullback in future ventures or become more careful if they fail at their first venture.

Countries which have more in common with the business are more welcoming and easier to build relationships in, whereas new markets are tougher to crack and in the long term sufficient finance is required to keep the process going. Curating goods and services keeping the public in mind is an almost guaranteed advantage but how to make your service standout in this common path is the real challenge.

It’s an age-old practice done by numerous companies, firms and corporations. Having a certain comfort level gives the firms time to plot out the next step and firms also hire expats to get a better insight into the country which aligns to the firm’s area of work. This process has reaped great benefits and there’s nothing to lose when you try internationalize a firm in a culturally close country before expanding to foreign markets.

Sources

1. George Ritzer., 1993. The McDonaldization of Society
2. Steve Baumgardner & Marie Crothers., 1994. Positive Psychology
3. Rajendra Sisodia., 2003. Firms of Endearment: How World-Class Companies Profit from Passion and Purpose
4. Brad Feld and Jason Mendelson., 2011. Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

Executive Summary

This report focuses on the innovative approaches adopted by one of the largest eye care services in the world which ultimately defeated barriers of distance, poverty and ignorance to create a self-sustaining system. In order to achieve this, the report outlines its effective use of scientific management and McDonaldization in providing high quality care available to masses at lowest possible cost. It finds that the all 4 elements of McDonaldization put forward by Ritzer were fundamental in the cooperation of a successful self-funding healthcare model. The report concludes with an update of how this system/Aravind…

Introduction

Whilst we are solely dependent on our vision to live a life of independence, in developing countries there is a heavy burden of individuals with visual impairments. This puts them at huge risk with many below the poverty line and others with income levels that would place professional treatment far beyond their reach. In order to eliminate this barrier, Aravind Eye Care Hospital has eradicated comprehensive eye care systems to address the underprivileged in India, offering their services for free or at steeply subsidised prices. Ongoing research has reported the exponential growth of Aravind through the principle of McDonaldization to ensure a system of continuous improvement whilst ensuring innovative operating practices.

This report will therefore apply the principles of McDonaldisation to Aravind eye care to explain the ongoing efforts in providing highly successful medical interventions to break the destructive cycle of poverty that entraps the blind. First, I will introduce the concepts of scientific management and McDonaldization. A brief background of Aravind’s service and facilities will then follow. This will highlight the need of Aravind’s purpose to step in and meet the health needs of fast growing populations. Following this, I will discuss how McDonaldisation has been influential in ensuring Aravind’s efforts in maintaining consistency and efficiency in its delivery to low-income populations.

What is scientific management?

Fredrick W. Taylor was the originator of the ambitious and vigorous proponent of the “scientific management” principle which brought a revolution in shaping the early twentieth century factory system (Jaffee, D. 2001). He made one of the earliest attempts in applying science to the processes in management. His tremendous surge of affluence lifted the working masses away from inefficiency and ensured each motion of work was executed under maximum capacity of workers with an elaborate organisation and system to ensure maximum prosperity between all assets of the business (Caldari, K. 2007). On one hand this was “a complete mental revolution” whilst others criticised Taylor for introducing industrial action, monotonous jobs and negligence towards workers at the workplace (Ratnayake, C. and Ima. 2009).

George Ritzer’s concept of ‘McDonaldisation’ should also be explored which elicits McDonald’s as one of the most influential developments in contemporary society. The central thesis of McDonaldisation is that the fast-food restaurant has created dominant operations—efficiency, calculability, predictability, and control—and that this adaptation has engulfed more and more aspects of contemporary life in a globalized world. Efficiency is geared towards a managerial focus on utilising the optimum method to complete tasks. Calculability entails a focus on quantifiable objects (numbers and figures) rather than the evaluation of quality. The third component of predictability ensures a routinized production and service output which allows familiarity for consumers. Under control, employees become standardized to perform tasks in the same manner each time. All in all, this resounding success of McDonald’s has increasingly led other types of businesses adapting these same principles to their needs. Whilst these concepts have made important developments in the present moment, it has also evoked controversy with a considerable number of costs and risks (Kellner, D).

Aravind: Background Information

Aravind eye care began in 1976 from an 11-bed hospital to now standing as one of the largest eye care providers in the world with increasing attention from global outlets. With a mission to ‘eliminate needless blindness’ coupled with social responsibility, innovative marketing and an excellent delivering strategy, Aravind Eye Hospital was able to revolutionize the concept of efficient and sustainable eye care in the developing world. Since its inception, Aravind’s eye care facilities include 13 eye hospitals, 6 outpatient eye examination centres and 75 primary eye care facilities in South India making it a model for the rest of the world.

Main Body

Dr. Venkataswamy (respectively known as Dr. V) had a specific mission to eliminate needless blindness in millions of poor people and this vision helped drive a successful execution of the Avarind Eye-Care system. Given the highly fragmented nature of its customer base and its need for scale, Aravind had to establish a low-cost business model whilst delivering exceptional quality (such as that of McDonalds) and thus, the integration of ‘McDonaldization’ was imperative. This service efficiency of McDonald’s fast food inspired Dr. V to emulate this whilst adapting it appropriately to the eye care system.

The first principle outlined in Ritzer’s McDonaldisation theory is efficiency or “the optimum method for getting from one point to another” (Ritzer, 1996). Aravind’s operational efficiency is highly noticeable; in 2001 they performed nearly 200,000 operations, mostly for cataract removal, more than the annual total number of cataract operations recorded for any entire European country (WHO, 2001). This clear productivity can be attributed to the superbly organised approach to “assembly-line” process: each theatre is managed by two surgeons with multiple sets of instruments and medical stuff. The support staff are trained to conduct key non-surgical tasks such as sterilizing the eye and administrating preoperative anaesthetic injections, allowing doctors to focus on core operations at high volume. This resulting partnership between well-trained surgical assistants and adequate staffing are vital in ensuring Avrind Eye Care enables a well-placed and routine fashion to optimise efficiency. Furthermore, this allows Aravind to cope with the increasing numbers of patients, in turn reducing waiting time between surgeries. All in all, Aravind’s efficiency has been the main principle in bringing the company to an elevated position opposed to other contenders in the health care market.

The next process outlined by Ritzer’s McDonaldisation theory is predictability which is the guarantee to uniformity of product and standardized outcomes. This was applied in Aravind through a rotating schedule for medical staff between the free and the paying wings. This systematic approach not only highlights Aravind’s respect to personal and unique needs of each patient but it gives them the satisfaction of consistency of care regardless of individual economic background. Moreover, this means the same quality of service can be applicable to all of its hospital branches.

The third process outlined in McDonaldisation theory is that of calculability which is the assessment of outcomes based on quantifiable rather than subjective criteria. Aravind strives to achieve productivity (quantity) without sacrificing quality. To maximise quality, several training programmes are in place to develop all human resources – ophthalmologists, paramedics, eye care managers aswell as local practitioners which are trained to become high-calibre surgeons. This continuing advancement in knowledge of eye care will not only satisfy the needs of the institution but also take care of the needs of the country. To maximise quantity, Aravind facilitates various community outreach programs, including mobile eye camps, in order to evaluate millions of patients at scale and keep demand flowing. However, it could be argued that Aravind could prioritise quantity to a greater extent as despite its efforts to provide eye care service to the doorstep of the community, it is yet to expand to other parts of India as well as globally to other developing markets which have large impoverished population.

The final process outlined in McDonaldisation theory is control. Aravind aggressively pursued opportunities to control their variable costs. In order to do this, Aravind set up a non-profit charitable trust after the name ‘Aurolab’ to manufacture intraocular lenses which were not pricing for the Indian market. Furthermore, to take care of fixed costs, Aravid is continually finding process to make patient-centric care more efficient. This can explain why surgeons can perform six to eight procedures per hour – an average of about 2,000 operations each year. Therefore, Aravind Eye Care System has philosophy of optimum utilisation of resources which allows control over cost.

Conclusion

In conclusion, at the core of Aravind’s management philosophy is the ability to standardize high-volume input, which together with the use of low-cost service and high productivity allows exceptional output which is also the idea shared by the leading fast food-chain McDonalds. This resulting use of McDonaldisation allows Aravind to exemplify a near-perfection industry market paradigm. The four core principles of efficiency, calculability, predictability, and control were applied in its business model and been a huge success. The scale of achievement has allowed Aravind to provide assistance to a breadth of eye hospitals which have seen extraordinary results – a double or nearly triple in their productivity. This clearly shows how the principles of McDonaldisation can be applied to various fields with necessary adaption to fit their local needs.

References

1. Jaffee, D. 2001, ‘THE RISE OF THE FACTORY SYSTEM’, Organization theory: Tension and Change, McGraw Hill, Boston
2. Caldari, K. 2007, ‘Alfred Marshall’s critical analysis of scientific managementכ ,‘The European Journal of the History of Economic Thought, vol. 14, no. 1, pp. 55-78, retrieved 29 March 2014, Taylor & Francis Group, Routhledge
3. Ratnayake, C. and Ima. 2009, ‘Evolution of scientific management towards performance measurement and managing systems for sustainable performance in industrial assets: philosophical point of view’, Journal of technology management & innovation, vol. 4, no. 1, pp. 152-161, JOTMI Research Group
4. https://pages.gseis.ucla.edu/faculty/kellner/essays/theorizingresistingmcdonaldization.pdf
5. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2566366/pdf/11285680.pdf
6. Riter, 1996
7. Mcdonalistion – https://en.wikipedia.org/wiki/McDonaldization
8. Mcdonalistion efficiency- https://www.mcdonaldization.com/whatisit.shtml
9. Mcdonalistion control- https://www.thoughtco.com/mcdonaldization-of-society-3026751