The Global Human Resource Management Casebook

Liza Castro Christiansen, Michal Biron, Pawan Budhwar, Brian Harney, Liza Castro Christiansen, Michal Biron, Elaine Farndale, Bård Kuvaas

• Verlag: Routledge
• Jahr: 2017
• ISBN:
  9781317362449
• Auflage: 2
• Thema: Betriebswirtschaft
• Thema: Personalmanagement

This casebook is a collection of international teaching cases focusing on contemporary human resource management issues. Each case centers primarily on one country and illustrates a significant challenge faced by managers and HR practitioners, helping students to understand how the issues they learn about in class play out in the real world.

The cases emphasize the national and cultural contexts of HR management, providing readers with a global understanding of employee motivation, reward systems, recruitment and selection, career development, and more. In this edition, the editors and authors have made significant updates to reflect recent developments in the field and cover a broader range of countries in Eastern Europe and Africa. The authors also delve into new industries like food service, clothing manufacturing, and transportation as well as IT and academia. Recommendations for further reading and relevant videos provide readers with practical insights into the modern HRM field.

With more than 30 cases followed by questions and tasks to encourage reflection, this is a valuable companion for any student of human resource management.

Part I
Western Europe

1
Austria

Talent Development at McDonald's Austria: A Compromise Between Local Demands and Global Standards

Wolfgang Mayrhofer and Katharina Pernkopf

Together with our franchisees, we make targeted investments in our employees, the focus is always on the personal development of each individual employee. With the opening of the academy for system catering we take an important step for our apprentices throughout Austria and offer a high-quality, uniform training.

Press release, Andreas Schmidlechner, Managing Director of McDonald’s Austria (Privatschule für Lehrlingsausbildung / McDonald’s, 2014)

McDonald’s is the world’s largest fast-food chain with substantial recent employer branding activities and in-house talent development practices across the globe. McDonald’s has not only successfully positioned itself as the biggest fast-food service industry player on the planet, the Illinois-based company has also increasingly taken advantage of being a transnational organisation, one that constantly adapts itself to the prevailing zeitgeist by combining global and local elements across the countries in which it operates. Especially when it comes down to managing its human resources, McDonald’s uses its international network of specialists to discuss problems, enable mutual learning, and find globally informed but locally adjusted solutions. According to its mission statement, McDonald’s invests in talent, creates career paths starting from the grill and sets up internal training centres around the world. Global standards guide these activities. Similar to many other global players McDonald’s faces the inevitable tensions between global standards, most often set by headquarters, and local demands such as legal regulations, cultural specifics or organisational idiosyncrasies.

Our case shows how setting up a training centre tailored to the demands of the Austrian context is the result of the interplay between the USA-based headquarters’ global idea of developing future managers, national requirements in terms of legal regulations, the current labour market situation, and the competitive landscape with regard to attracting young people. This local version of the more general idea of training centres builds on Austria’s vocational education system and aligns itself with political interests making vocational training more attractive by educating apprentices to a high level of competence.

After briefly characterising McDonald’s both on a global scale and in its Austrian specificity, we will first highlight relevant elements of the Austrian context, in particular the employment legislation, labour market dynamics, and the Austrian system of dual vocational training. In a second step, we will outline the process of setting up a private vocational training school as the Austrian version of a McDonald’s training centre, emphasising the various competing demands within the Austrian context and how McDonald’s dealt with them. In a final step, we will briefly outline lessons to learn for other contexts.

Organisational Setting

McDonald’s operates in more than 36,000 locations across the globe, serving almost 70 million customers in more than 100 countries a day. About 80 percent of restaurants are independently owned and run by local business women and men; in total McDonald’s employs more than 420,000 people. According to Forbes, McDonald’s ranks sixth on the world’s most valuable brands list; only Apple, Microsoft, Google, Coca-Cola and IBM get better ratings. Nonstop optimisations in the delivery of products and related services as well as professionalisation through advanced training are crucial for the continuation of the McDonald’s success story. Since the so-called good old days when McDonald’s used to be the uncontested number one family fast-food restaurant in the USA, business has become tougher. In the USA, McDonald’s struggled with a sales slump in 2015. This resembles episodes in the past where the burger-serving company had to deal with legal cases related to the quality of its products (e.g., “Super Size Me”, slow food, and other food movements), allegedly mistreating their employees (e.g., minimum wage debate, strikes and unionisation activities organised by employees), or violations of child labour law. For these reasons McDonald’s in the USA has been perceived more or less as a place to buy cheap food and as a low-end employer you do not want to be associated with. People even admit to hiding their lunch bag, making sure nobody would see the “Golden Arches” logo (see also a YouTube video at http:// bit.ly/1LD00tZ). However, this image is something McDonald’s plans to change, with an emphasis on being a good employer, serving quality products, and developing their human resources. Regarding the latter, they heavily invest in training in their own educational institution, Hamburger University, where only 1 percent of applicants get accepted which makes it more competitive to enter than Harvard.

McDonald’s in Austria – colloquially called “Mäci” or “Schachtelwirt” (“box pub”) by the local population – is not only the largest fast-food chain in Austria and the biggest host in the local food service industry, but also a major employer. It runs 194 restaurants – 85 percent operated by 43 franchisees – and employs 9,500 people. McDonald’s was the first fast-food chain to enter Austria in 1977. It encountered critical media coverage back then, ranging from the problematic impact of fast food on local eating habits to the dangers of standardisation and franchise systems. After more than 35 years of operations, 85 percent of Austrians eat at McDonald’s.

Background to the Case

Austria is a well-developed country in the heart of Europe. In 2014 it had a GDP of approximately 329.3 billion euros, ranking about twenty-seventh in the world and fifth in the European Union. Its economy consists of a large service sector (70.6 percent of GDP), a sound industrial sector (28 percent of GDP) with “hidden champions” prominent on the world market such as Swarovski (jewellery), Doppelmayer (cable cars) or Red Bull (beverages), and a small (1.4 percent of GDP), but highly developed agricultural sector. Austria’s population amounts to 8,584,926, with about 1.8 million living in Vienna, a city regularly coming up as one of the most liveable places worldwide when measured in terms of political, social and economic climate, medical care, education, infrastructure (e.g., public transportation, power and water supply), and recreational offers such as restaurants, theatres, cinemas, sports facilities as well as the availability of diverse consumer goods from food to cars, along with environmental conditions – from green space to air quality.

Austrian Employment Legislation, Employee Relations and Labour Market Dynamics

Generally, harmony is a highly valued principle in Austria. Austrians are committed to promoting corporate success while paying attention to people’s welfare. Reaching a compromise is important in political decision making, reflected most prominently in the system of Social Partnership, a voluntary system of negotiations between parties representing opposite interests, e.g., trade unions and employer’s associations. The Austrian workforce traditionally benefits from worker protection because of a strong post-World War II labour movement. Establishing and maintaining fair working conditions is the primary task of the social partnership, an institution that local and globally operating organisations like McDonald’s cannot ignore.

Austria has one of the lowest unemployment rates in Europe. Nevertheless, due to the financial crisis and its consequences, Austria is also currently facing the highest number of unemployed since the end of World War II. Traditionally, the labour market consists of people from various countries of origin. Almost 13 percent of people living in Austria were born abroad, which is beyond the comparable figure for classical immigration countries such as the USA (11 percent). This includes not only the 2015 influx of refugees from the Middle East, but also individuals from former Yugoslavian states, Germans, Turks, Slovaks and Czechs since Austria has a long tradition of sheltering refugees from nearby countries. Traditionally, immigrants have been an important group for McDonald’s. As in other countries such as Denmark, minority groups have not only become integrated into the labour market through McDonald’s, but have also been promoted to leadership roles. Thus one can assume that the fast-food chain will also play an important role as an employer in Austria and across Europe in the future.

Apprenticeship training has lost some of its attractiveness due to the lack of choice in educational pathways, the concentration of apprentices in a few occupations and the steadily decreasing willingness of Austrian companies to provide training opportunities. Thus, there has been a strong demand for reform in the apprenticeship system in order to make apprenticeship trades more attractive again. Reform measures are already being carried out in cooperation with all parties involved including financial support for companies which train apprentices, removal of bureaucratic impediments, and more information about less popular and non-gender-specific occupations. Since these reforms, more companies have been willing to take on apprentices and the government is prepared to follow up with adapting its programmes to make apprenticeship more attractive.

The Apprenticeship System in Austria

In Austria apprenticeship training takes places at two different sites: at the company and at the part-time vocational school (“Berufsschule”). Thus, it is also referred to as a “dual vocational training system” or, in its shortened form, as a “dual system”. Currently about 40 percent of all Austrian teenagers enter the apprenticeship system upon completion of their compulsory education. After finishing their apprenticeship, about 40 percent of these young people, now known as “journeymen” (Gesellen), continue to work for the company where they had been trained. The most popular apprenticeship trades among girls are retail-trade merchant, followed by hairdresser and office clerk. Among male apprentices the most popular occupations are motor-vehicle mechanic, followed by electrician.

Students may apply for admission to vocational training after compulsory education (9 years). Apprentices may only be trained in the legally recognised apprenticeship trades. In the food service industry, for instance, you can apply for vocational training to become a catering specialist, assistant in the catering and hotel industry, assistant in the hotel and restaurant industry, chef, system catering specialist, and restaurant specialist. Apprenticeship training lasts from two to four years, but in most cases three years. Companies that train apprentices are obliged to provide them with the skills and know-how specified in the occupational profile. This ensures a uniform minimum standard of training. On-the-job training constitutes the major part of apprenticeship, and because apprentices are company employees, the company also provides them with insurance – as required by law – e.g., full social insurance including health, accident, retirement and unemployment insurance. The aim of the part-time vocational schools for apprentices is the provision of theoretical basics related to the respective occupation, to promote and complement on-the-job training and to deepen the general knowledge of apprentices.

At the moment only six private vocational schools exist in Austria. One belongs to the ÖBB, the Austrian Federal Railways which is owned entirely by the Republic of Austria. Another one is run by Spar, a major retail chain in Austria. Spar’s vocational school evolved out of the Meinl-Academy, which is more than 100 years old. Meinl is a traditional Austrian manufacturer and retailer of coffee, gourmet foods and other grocery products which also operates three coffee shops in the USA, all three on the north side of Chicago, Illinois. The other three schools are run by Swarovski, known for its crystals and high-end optics, Plan-see, a group of companies focusing on manufacturing powder metallurgical materials, and a public prison.

McDonald's: Handling Global Standards and Local Demands

In 1977 McDonald’s opened its first restaurant in the city centre of Vienna, and kicked off a cultural revolution in the land of Wiener Schnitzel. However, at first it was viewed rather sceptically by locals and was seen as an unnecessary competitor to Vienna’s well known sausage stands (“Würstelstand”), the still beloved Austrian version of fast food. Besides burgers and co, the chain introduced a new business model, the franchise system, into the country. Despite or even because of all this novelty, McDonald’s Austria managed to achieve a market share of 39 percent in the system catering industry in 2013. By comparison Burger King’s share only amounted to 3 percent. Other chains like Pizza Hut also opened restaurants in Austria, but have never really gained a foothold. This situation shows how weak the competition has been in that sector of the Austrian economy. Measured by the number of residents, Austria has the highest concentration of McDonald’s restaurants in Europe. In 2014 the fast-food chain served 156 million customers with a turnover of about 562 million euros. This success mainly has to do with the quality of their products, as they mostly use domestic produce (note: serving genetically modified food is forbidden in Austria).

McDonald’s has had an impact on Austria and its food service industry, but Austria has also had some influence on McDonald’s on a global scale. Andreas Hacker, former managing director of McDonald’s Austria, was crucially involved in the process of introducing the concept of McCafé into the chain. Moreover, he was the first non-American on the Board of Directors at the USA-based headquarters. Several years ago Austria also managed to soften the strict rules of the group and added beer to its menu, as the absence of beer had been identified as one reason why especially male customers avoided the fast food chain. These examples from marketing and product development already hint towards the transnational HRM approach of McDonald’s. The product or the brand is very much interrelated with the labour process or the employer brand and McDonald’s allows competent country HR managers to meet local demands as long as global standards such as product quality are ensured.

As outl...

Inhaltsverzeichnis

• Cover
• Title
• Copyright
• Contents
• List of Illustrations
• List of Contributors
• Foreword
• Preface
• Acknowledgments
• PART I: WESTERN EUROPE
• PART II: SCANDINAVIA
• PART III: CENTRAL AND EASTERN EUROPE
• PART IV: MEDITERRANEAN, MIDDLE EAST, AND AFRICA
• PART V: ASIA AND THE PACIFIC RIM
• PART VI: THE AMERICAS
• Index