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Human Relations in Organizations: Applications and Skill Building 8th Edition by Robert Lussier
Edition 8ISBN: 978-0073602370Human Relations in Organizations: Applications and Skill Building 8th Edition by Robert Lussier
Edition 8ISBN: 978-0073602370 Exercise 30
Mixed Messages: Can McDonald's Make "Cents" of This?
McDonald's is one of the most recognized brands worldwide and has been a household name in the United States for almost fifty years. How has McDonald's become one of the most well-known firms in the world? Well, according to McDonald's, it continues to make progress on delivering a relevant restaurant experience by maintaining its focus on its most important priority-the customer.
Not everyone, however, is quite so happy in Ronald McDonald land. "A farmworkers' advocacy group is calling on fast-food leader McDonald's Corp. to pay more for the tomatoes slapped on their premium burgers so that Florida pickers can be paid more.... Most tomato pickers still receive roughly the same wage they did in 1978-between 40 and 45 cents for every 32-pound bucket of tomatoes. 'We are hoping McDonald's takes responsibility, the same way Taco Bell and Yum Brands did, and that it uses its power to demand a just treatment and decent pay for farmworkers,' said Gerardo Reyes, an Immokalee farmworker. The Coalition of Immokalee Workers urged consumers to pressure McDonald's to support a campaign to boost wages for more than 3,000 Florida pickers, who growers say provide about 90 percent of the nation's domestic fresh winter tomatoes." Customers appear sympathetic to the coalition's cause.
To continue to be a good community leader and obtain customer support, McDonald's should back higher tomato prices. Higher tomato prices, however, will negatively impact McDonald's operating costs because tomatoes are used in conjunction with many of its products, most notably its hamburgers, a product that it sells in the millions on a daily basis. Increased tomato prices will reduce its profit margin and/or increase the price of its burgers, a sure-fire method of wiping the smiles off of the faces of both stockholders and customers. Customers may be understanding of the Florida pickers' plight but are they willing to pay more for their burgers and salads?
What are the messages that McDonald's is receiving? From whom? Why are they mixed?
McDonald's is one of the most recognized brands worldwide and has been a household name in the United States for almost fifty years. How has McDonald's become one of the most well-known firms in the world? Well, according to McDonald's, it continues to make progress on delivering a relevant restaurant experience by maintaining its focus on its most important priority-the customer.
Not everyone, however, is quite so happy in Ronald McDonald land. "A farmworkers' advocacy group is calling on fast-food leader McDonald's Corp. to pay more for the tomatoes slapped on their premium burgers so that Florida pickers can be paid more.... Most tomato pickers still receive roughly the same wage they did in 1978-between 40 and 45 cents for every 32-pound bucket of tomatoes. 'We are hoping McDonald's takes responsibility, the same way Taco Bell and Yum Brands did, and that it uses its power to demand a just treatment and decent pay for farmworkers,' said Gerardo Reyes, an Immokalee farmworker. The Coalition of Immokalee Workers urged consumers to pressure McDonald's to support a campaign to boost wages for more than 3,000 Florida pickers, who growers say provide about 90 percent of the nation's domestic fresh winter tomatoes." Customers appear sympathetic to the coalition's cause.
To continue to be a good community leader and obtain customer support, McDonald's should back higher tomato prices. Higher tomato prices, however, will negatively impact McDonald's operating costs because tomatoes are used in conjunction with many of its products, most notably its hamburgers, a product that it sells in the millions on a daily basis. Increased tomato prices will reduce its profit margin and/or increase the price of its burgers, a sure-fire method of wiping the smiles off of the faces of both stockholders and customers. Customers may be understanding of the Florida pickers' plight but are they willing to pay more for their burgers and salads?
What are the messages that McDonald's is receiving? From whom? Why are they mixed?
Explanation
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Case summary:
Company MDD is one of the ...
Human Relations in Organizations: Applications and Skill Building 8th Edition by Robert Lussier
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