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Introduction
The fast-food industry has become extremely internationalized within the last three decades; such companies as McDonald’s or Burger King operate in countries that may have different political and legal systems, cultures, or even religions (Berberoglu 2002, p. 135).
This essay is aimed at comparing and contrasting the human resource and employment relations strategies used in such countries as the United States, Australia, and Germany.
These countries have been chosen because such examples can show how multinational corporations (MNCs) adapt to different legal systems, social values, and cultural environments.
For instance, the United States can be seen as a country where the fast-food industry first achieved enormous success in terms of financial performance. By looking at it, one can understand the origins of HR practices used in the fast-food industry.
In turn, Germany can be of great interest to business administrators because of its labour relations system that requires MNCs to develop more complex HR strategies and give more bargaining power to workers.
Finally, Australia is a state which places much emphasis on the corporate social responsibility of private businesses and one should see how companies adapt to these requirements.
Overall, it is possible to say that a MNC has to take into account such factors as the labour laws of a country, the degree to which workers are unanimous, and cultural values of a particular society.
Although, it may not be possible to develop a model that can fit every country, business administrators can identify a set of best practices that are related to staffing, training and development, remuneration, management, and industrial relations.
Theories related to HR practices in multinational corporations
To a great extent, the success of international companies depends on their ability to improve or optimize every aspect of their performance. These organizations have to be concerned with the cost of their operations, especially labour expenses, and relations with customers.
These aspects of performance are of crucial importance to the fast-food industry which can be defined as a group of firms specialising on “branded” convenience food prepared in a place and meant for direct sale to retailers (Royle Towers 2002, p. 2).
Human resource management plays an important role for these organizations, because it ensures that a company can recruit and retain the employees who can effectively cope with the goals that the organization sets.
The first strategy is based on the convergence theory. According to this approach, cultural boundaries or distinctions can be eroded; therefore; similar HR models and approaches can be replicated across countries (Mcgaughey & Cieri 1999, p. 236).
In contrast, the divergence theory implies the difference between cultures will continue to play an important role and HR managers will have to encourage diversity (Mcgaughey & Cieri 1999, p. 237).
The countries that have been chosen for this discussion do not differ significantly in terms of such cultural indicators as power distance or uncertainty avoidance (Hofstede 2012).
However, there are some differences in such values as collectivism and individuality, especially if one is speaking about the United States and Germany (Hofstede 2012).
Thus, the influence of culture is one of the issues that multinational corporations (MNCs) should be aware of.
Secondly, HR professionals have to think about laws that are implemented in specific countries. It should be mentioned that the term human-resource relations refers to the programs that an organization puts in place in order to ensure that the employees receive the benefits that are guaranteed by legislation (Lusthaus 1999, p. 69).
In particular, one can mention such issues as compensation, protection of health, or human rights (Lusthaus 1999, p. 69). In turn, employment relations strategies can be understood as long-term objectives set by the management in order to preserve or change workplace procedures and results (Rose 2008, p. 81).
Fast-food companies have to focus on such activities training, recruitment, and compensation policies to make sure that their labour costs remain low, while the quality of organizational performance is not impaired.
Yet, one should take into account that HR practices and relations with workers are affected by a variety of factors, for example, labour legislation of a specific country, or the attitude of a society toward a specific job or occupation, and so forth. Thus, HR managers should be aware of these factors.
Overall, the task of these professionals becomes more complicated when they have to adjust their practices to a different country.
For example, fast food companies that operate in Germany have to consider the increased role of trade unions there and collective bargaining power of German workers (Royle, 2012, p. 75; Schnabel & Wagner 2008, p. 497).
In turn, Australian fast-food companies have to be more concerned with their public image (Allan, Bamber & Timo 2002 p. 161). HR professionals must ensure that the practices used in different divisions of the organization do not compromise the company and its image.
MNCs are pressured to conform to the local legal and social norms. This is one of the most difficult tasks that HR professional have to cope with.
On the one hand, they are pressured by the senior executives who are mostly concerned with the profitability of an enterprise. Yet, they also have to comply with the rules set by the government of a foreign country.
Overall, these examples suggest that HR policies are instrumental for the effective performance of an organization. They have to ensure cost-efficiency and good relations with customers.
These aspects of performance are crucial for the fast-food industry. Moreover, this discussion shows that HR practices and employee relations have to be adjusted to a certain cultural, social, and political environment.
The following section will illustrate this argument in more detail.
Comparison and contrast of HR practices in different countries
The practices that exist in different countries
Despite the fact that the countries that have been chosen for discussion may differ in terms of legal environment, there are some similarities in the practices used by fast-food companies.
The similarities are mostly related to such aspects as staffing, training, development and management. First of all, one should speak about training and development.
One of the trends that can be observed in the United States, Germany, and Australia is the standardization of workplace procedures (Royle & Towers 2002, p. 144). As a rule, fast food companies provide specific instructions for each activity that an employee can be engaged in.
Special attention is normally paid to customer service (Royle & Towers 2002, p. 144). Managers pay special attention to such aspects as politeness of employees, their facial expressions, their reactions to clients’ requests and so forth (Leidner 2002, p. 25).
The training programs in the fast-food industry are designed to develop these skills. These corporations attempt to make sure that their workers can understand every workplace procedure.
Moreover, they are trained to act as interchangeable parts of a mechanism (Royle & Towers 2002, p. 144). To a great extent, this policy can be explained by the corporate culture of such companies.
These MNCs usually pay special attention to the training that they provide to workers in order to succeed.
Staffing is another aspect of HR practices that is replicated in the United States, Germany, and Australia. Fast-food companies have accepted the idea of high turnover in their organizations.
To a great extent, this policy can be explained by cultural factors that are present in the United States, Germany, and Australia. One should take into account that jobs in the fast-food industry do not enjoy popularity in economically-developed countries (Tannock 2001).
They are usually associated with lack of education or skills that allow a person to climb a social ladder (Leidner 2002, p. 16). Employees of such restaurants can even be ridiculed by peers.
This stigmatization is particular strong when one speaks about the person who has already reached adulthood (Leidner 2002, p. 16).
Thus, fast-food companies employ mostly young people who are pursuing their education or who are just searching for a part-time job (Allan, Bamber & Timo 2002 p. 152). Overall, fast-food corporations have already accepted the idea of high turnover within their divisions.
Moreover, when recruiting people, they emphasize such issues as their ability to work flexible hours or free training that the company can offer. Thus, fast-food companies usually employ only young people who do not want to stay with them for a long time.
One can say that each of the countries that have been chosen is an advanced economy, and the employment in the fast-food industry is not rewarding for the majority of people. Thus, fast-food companies should take into account that people see them as only part-time employers.
Another aspect that people should take into account is management style, especially the degree of autonomy that workers have in fast-food industry.
As a rule, the employees of fast-food companies do not have many opportunities to take part in the decision-making (Royle, 2005, p. 42). More likely, they have to act like subordinates who are supposed to follow every instruction or command of the business administrator.
Again, this policy has been replicated in many countries, including the United States, Australia, or Germany. However, this approach is consistently criticized by trade unions of these countries.
Overall, these policies can be explained by the corporate culture of fast-food companies and their emphasis on cost-efficiency. In this case, cultural differences between countries do not manifest themselves.
On the whole, HR professionals should that the majority of their employees do not want to work with them on a regular basis.
The differences in HR practices and employee relations
The managers of fast-food companies should take into account that not all of their practices can be easily replicated in different countries. The most important aspects are the remuneration and industrial relations.
For instance, MNCs operating in the United States attempt to minimize the wages of the employees and they do not face much resistance (Leidner 2002, p. 12). It should be noted that in this country the labour terms are more favourable to employers, rather than employees (Leidner 2002, p. 12).
American law imposes restrictions on companies, but it does not give many positive rights to workers (Leidner, p. 12). This is the main peculiarity of labour relations and remuneration in this country.
Fast-food companies that began to operate at an international level attempted to emulate these policies in other countries, but they did not achieve success.
For instance, such a strategy may not be successful in Germany where the collective bargaining power of workers is much stronger. The efforts of the German labour force are usually more synchronized in part because trade unions play a more important role in this society.
It should be noted that in Germany a larger percentage of workers are unionized (Schnabel & Wagner, 2008, p. 497). Apart from that, the German Trade Union Federation that represents the rights workers is an influential organization and many companies have to accept its demands (Royle 2002, p. 71).
Moreover, according to Works Constitution Act employees are allowed to establish councils that should represent their rights (Royle 2002, p. 72). In this country, the companies that resist the unionization of their employees are more likely to face public criticism.
One can mention that McDonald’s had to encounter such difficulties when it entered the German market because it could not reach an agreement with trade unions (Royle 2002, p. 71). Therefore, Germany has a system of checks and balances that offer more protection to employees.
In Australia, the rights of workers are also well-protected, in part because fast-food companies working in this country have to act as good corporate citizens (Allan, Bamber & Timo 2002, p. 161).
Such MNCs as McDonald’s, Hungry Jack’s, and KFC have decided to manage the entire union discussions instead of dealing with separate trade unions (Allan, Bamber & Timo 2002, p. 140).
So, in Australia the rights of workers are protected due to corporate social responsibility, while in Germany their rights are defended by trade unions.
Managers should also take into account that Germany and the United States differ from one another in terms of cultural values and these differences may explain why remuneration and labour relations differ in these countries.
For instance, according to Geert Hofstede, Germans place less emphasis on individuality in comparison with Americans (Hoftede 2012). This means that German workers are more cohesive or unanimous (Hofstede 2012).
They are more likely to join their efforts in order to force a company to raise wages. Overall, this example suggests that the practices of a company have to take into account the cultural and political environment of the country.
As it has been shown, the degree of collectivism can determine the bargaining power of employees.
Overall, the differences that have been identified are mostly related to human resource relations. In particular, one can speak about such aspects as compensation and labour relations of MNCs.
These corporations should take into account that in the future, the majority of governments may require them to act as responsible corporate citizens, and it will be more difficult for them to defend their reputation.
HR professionals can help them avoid these problems by designing strategies that can improve employees’ satisfaction with their work.
Recommendations
It is possible to identify best practices that fast-food MNCs can adopt in order to perform successfully in different countries. First of all, fast-food companies should continue their policies regarding training and development.
Their task is to provide on-the-job training to employees. As it has been noted before, practically every workplace procedure in fast-food industry is specified and standardized. This approach will enable them to maximize the performance of their employees at a relatively low cost.
Certainly, high turnover of employees is usually believed to be a cause of many problems for many companies (Tesone 2008, p. 206).
Yet, high turnover does not pose a significant risk to fast-food companies because they want their employees to be interchangeable in the workplace (Royle & Towers 2002, p. 144). This is one of the approaches that can be applied in different countries.
Secondly, while recruiting employees they should focus on such aspects as flexibility of working hours, absence of educational requirements, and ability to earn some income at the time when a person cannot secure a more prestigious employment.
These organizations should remember about the demographic characteristics of their labour force. Fast-food companies should recruit young people who believe that fast-food industry can offer them only a temporary employment.
This strategy can be applied in the United States, Germany, Australia, and many other countries in which fast-food companies operate. This approach has already proved to be effective.
As it has been said before, the employees of fast-food companies can often be stigmatized. HR professionals highlight some positive aspects of working in a fast-food restaurant, for example, flexible working hours or ability to receive free training.
Thirdly, they should remember that the bargaining power of workers can be greater in some countries. The managers of fast-food companies should remember that in Germany and Australia the social performance of businesses has to reach higher standards.
Such practices as of-the-clock work may no longer be permissible. In the previous sections it has been shown that fast-food companies have to act as responsible corporate citizens because people who live in Australia, Germany and the US may eventually pay more attention to their labour practices.
These companies should remember that they also need skilful employees, and it is necessary to find ways of retaining workers who can improve the operations of fast-food restaurants.
Conclusion
The success of fast-food companies strongly depends on their ability to adjust to the legal, social and cultural environment of other countries.
In particular, they need to focus on the laws that are implemented in the country, people’s attitudes toward a certain occupation, and some of their cultural values such as collectivism or individuality.
These organizations should remember that human resource and employment relations strategies can require some modifications, depending upon a particular country. For instance, in Germany fast-food companies should be ready to cooperate with trade unions.
The examples discussed in this paper suggest that daily operations, workplace practices, and recruitment of employees can be similar in across different countries. They are relatively similar in the United States, Germany, and Australia.
They can continue using such practices in the future. However, promotion of employee’s rights, the empowerment of personnel, and their compensation require much more attention of HR managers who work outside the United States. They should note that bargaining power of workers can be very strong in some countries such as Germany.
References
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Berberoglu, B 2002, Labor and Capital in the Age of Globalization: The Labor Process and the Changing Nature of Work in the Global Economy, Rowman & Littlefield, London.
Hofstede, G 2012, National Culture: Germany. Web.
Leidner R 2002, Fast-food work in the United States. In Royle, T & Towers, B (eds.), Labor relations in the global fast food industry, Routledge, New York, pp. 7-27.
Lusthaus, C 1999, Enhancing Organizational Performance: A Toolbox for Self-Assessment, International Development Research Centre, Ottawa.
Mcgaughey, S, & Cieri, H 1999, ‘Reassessment of convergence and divergence dynamics: implications for international HRM’, International Journal Of Human Resource Management, vol.10 no. 2, pp. 235-250.
Rose, E 2008, Employment Relations, Pearson Education, New York.
Royle, T & Towers, B (eds.) 2002, Labor relations in the global fast food industry, Routledge, New York.
Royle, T 2005, ‘Realism or idealism? Corporate social responsibility and the employee stakeholder in the global fast-food industry’, Business Ethics: A European Review, vol. 14, no. 1, pp. 42-55
Royle, T 2002, ‘Undermining the system? Labour relations in the German fast-food industry’ ”. In Royle, T & Towers, B (eds.), Labor relations in the global fast food industry, Routledge, New York, pp. 69-92.
Schnabel, C, & Wagner, J 2008, ‘The Aging of the Unions in West Germany, 1980-2006’, Jahrbucher Fur Nationalokonomie Und Statistik, vol. 228 no 5, pp. 497-511.
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