Cultural Differences: McDonald’s in Japan

When Ray Kroc established McDonald’s in 1955 he founded the restaurant on the basis of providing customers quality, service, cleanliness, and value. The McDonald’s website still boasts these values as part of its core as well as giving back to the communities in which they do business, celebrating achievements while striving to achieve new heights, approaching all aspects of the business with honesty and integrity, and giving back to the system that provides them their success. Along with the core values, McDonald’s includes its guiding principles on the website– a commitment to exceeding customer’s expectations, belief in success from the ‘three-legged stool’ (corporate, franchisee partners, and supplier partners), a passion and responsibility for enhancing and protecting the McDonald’s brand, a belief in collaborative management approach, and a commitment to franchising and seizing every opportunity to innovate and lead the industry. These values and principles make up the organizational culture of McDonald’s. Continue reading


Influence of Strategic Design on Behavior: Casinos

After reading Geoff’s post about the design of Yankee Stadium, I was inspired to write about another type of environment that I find truly fascinating. The strategic design of casinos and the impact is has on the individuals within it is a perfect subject for anyone with an interest in the presence of psychology with respect to management. I have taken several management and psychology courses, and discussions about casinos have come up in almost all of them. Geoff’s post about Yankee stadium discussed how the organization and the environment of the arena seems to have a legitimate influence over how individuals act once they are inside it. This environmental influence is extremely present in casinos, and it is undoubtedly a reflection of how management has figured out how to strategically design them to enhance this impact.

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Bottoms up, Bottoms up

Last week our discussion on innovation brought two techniques to the table; top-down innovation and bottom-up innovation. These two ideas basically described where the ideas came from, and whether the trickled down or shot up. After thinking about the terms in that manner, I decided that if a low-rank employee could shoot his ideas all the way up to the top, then that was definitely something worth exploring.

As I went to look for an example of bottom-up innovation, the first one that my search engine showed was Best Buy. I figured that since this is a company that we are all familiar with that it would be interested to see how they have employed this particular technique.

Chris Applegate became a sales associate in 2002 at a Best Buy store in Lakewood, California. As an employee, he brought his store a lot of new ideas, that would eventually travel around the country to other branches. His first idea came from Vonage VOIP services (Vonage is a provider of internet broadband telephone services). Chris then created a Vonage sales and marketing program that spread quickly to other areas in California. His efforts have changed the California consumer by creating a massive increase in Vonage users.

“Chris is practicing Best-Buy’s bottom-up innovation.  For the last several years, Best Buy has been developing this disciplined innovation approach.  Every associate is encouraged to try new ways to increase Best Buy’s sales and profits.  They are rewarded financially when they succeed, and in lots of other ways just for trying. “

This practice has proven very successful for Best Buy, and can be seen in numerous other innovations.

“Like most innovation efforts, the goal of Best Buy’s bottom-up innovation is improved growth and profitability for the company.   And in recent years, Best Buy has been performing quite well along these dimensions, with sales rising about 30% over the two year period from March, 2003 to March, 2005.  During that same period, the company’s operating earnings were up about 50%.”

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Formalized Structures are Eventually Ineffecient

Organizations and Organizing mentions the development of a type of rational system known as a formalized structure. Organizations design formalized structures by making the rules and roles of its members clear and explicit. This makes the social structure and flow of information obvious so that the organization’s performance is easily predictable and there is an elimination of power struggles. Additionally, it makes it so that the organization is separate from the individuals. Formalized structures are types of rational systems considered to maximize an organization’s efficiency. However, it seems soooooooo obvious that these key elements supporting the formalized structure could actually lead to decreased efficiency.

Brave New World is a classic piece of fiction written by Aldous Huxley that I believe demonstrates the problems with a formalized structure. In the book, Huxley describes a “Brave New World” that is a “world of tomorrow in which capitalist civilization has been reconstituted through the most efficient scientific and psychological engineering” (Huxley, Book Synopsis). In this world, the government genetically engineers 3 types of people. There are the leaders and thinkers, the less intellectual, and the stupefied. The book debates if the standardization of people is dehumanizing— or if stability is more significant than humanity. It ultimately concludes the scariness of living in the “Brave New World” where human life does not seem worth living. The formalized structure seems like it would have the same consequences as the fictional “Brave New World.” It too places more value on job standardization and stability than on creativity and flexibility. With a person feeling their job function is standardized, will they ever feel significant within their role? I believe in the United States if people’s jobs are all subject to the formalized system the end result will be a lack of enthusiasm, quitting, and the demise of an organization.

Nickel and Dimed seems to be another piece demonstrating the problems of the formalized structure. Barbara Ehrenreich’s description of working at Wal-Mart where her job is standardized sounds highly oppressive. She says that for her manager, “the layout is about the only thing she can control, since [all else is] determined by the home office in Arkansas.” (Ehrenreich 156). The work “requires minimal human interaction, of either the collegial or the supervisor sort, largely because it is so self-defining” (Ehrenreich 157). If the workers do not do exactly as instructed, Wal-Mart makes them aware they can easily replace them. This leaves workers with jobs that have no intrinsic value; and so, they begin to ask questions like “Why do we—work here? Why do we stay?” (Ehrenreich 179). With these types of questions, I do believe there is a big storm brewing over Wal-Mart and organizations with similar formalized structures. There is a consequence to efficiency through standardization.

Formalized structures may lead to increased efficiency INITALLY. However, with the general discomfort toward formalization as discussed in Brave New World and Nickel and Dimed, I am lead to believe that formalization has long term consequences. I am also lead to question the intentions and ethics of the organizations that institute them. Wal-Mart, Nike, and others which have formalized systems, seem to put employees in some of the most terrible working conditions, and worse yet, leave them without a voice. In this way, I really do question the long-term effectiveness of the formalized structure.