Compare and contrast the similarities and differences between employment relations in the fast food industries in the United States, Germany and Singapore. What does your comparison revel about the enduring relevance of national models of employment relations laws and institutions?
The fast food industry is considered as one of the major industries in the world, particularly in area of investments that is connected to food. As a matter of fact, since 1967, the fast food industry has developed and changed from a simple hot dog cart on Coney Island to a global industry including local, regional and national chains, together with franchises (The McModel: Ensuring the Future of Fast Food Industry, 2008). However, due to the different challenges in the global and local market, the employee relations of companies are being affected. Employee relations is consisted of important aspect of human resource management which focuses on the general relationship between the employees, during the duration of collective agreement where in the trade unions are recognized and/or through the policies that are applied for the involvement and communications of employee (Armstrong, 2000).
This paper focuses on identifying the different factors that are connected with the labor relations in the global fast food industry by analyzing and evaluating the cases of Germany, United States and Singapore. Thus, it will examine how McDonald’s Corporation enable to enforce or adjust their different practices towards human resource management (HRM) in different national industrial relations systems. It will focus on the different employment practices that are being implemented and applied by McDonald’s with accordance to the different environmental factors which can affect its overall performance including the aspect of culture, politics, economics and even technology or innovations.
It will tackle the issues that are related to the laws and regulations of each country that are connected with the trade union, because it has a great contribution on how the rights of employees will be voice out towards the employer as well as the national government. Thus, the limited success of trade unions to organize workers in the global fast-food industry is characterized by trade union exclusion, high labor turnover, unskilled work, paternalistic management regimes and work organization which allow little scope for developing the participation of the workers in the decision-making process and supporting social justice and rights of workers (Labor Relations in the Global Fast-Food Industry, n.d.).
McDonald’s Corporation is considered as the largest chain of fast food restaurants in the world with 31,000 restaurants in more than 120 countries in 6 continents and with more than billion system-wide sales (International Directory of Company Histories, 2004). The company is serving more than 47 million customers everyday and offering different fast food items and soft drinks such as burger, fries, salads, chicken and ice cream (Abdullah, 2009). McDonald’s had become one of the most successful companies and brands in the United States, Germany and Singapore. McDonald’s has started its successful global invasion in the US. Therefore, it can be said that most of the standards and the entire McDonald’s model were developed and based on the culture of the US. McDonald’s is also considered as the top fast-food chain of restaurants in Germany, thus the company had been able to penetrate the culture of German market. Out of the three countries, Germany can be considered as the country which made McDonald’s to face challenges regarding labor relations. Above all, Singapore is considered as one of advanced countries in Asia, particularly regarding economic aspect, this enables McDonald’s to see the country as a possible and feasible market to immerse. As a result, the company have been successful in offering fast-food products towards the customers, at the same time, enables to manage the needs of their employees. As a matter of fact, McDonald’s is considered as one of the friendliest companies to their employees.
Labor union is defined as the relationship of the workers which seeks to develop the social status and condition of its members by using group effort. It represents its members in different negotiations with the employers and other governmental organizations regarding the different factors that are related to the employment including contract, benefits, wages, working environment and other related factors. Thus, this contract negotiation is called the collective bargaining (Labor Union, 2008). The United States, Germany and Singapore are three nations that have been able to focus on the benefits of their employment, particularly, due to the fact that human resource is considered as one of the most important, if not the most important resource for any business and economy.
One important characteristics and even challenge for Multinational Corporations (MNC) is the standardization of their policies, structures and other aspects that are connected on how the company will perform in different countries in the world. This is important because different countries or nations have different cultures, traditions and behaviors which can affect the overall relationship of the company with the employees, governments and the customers. McDonald’s is facing the said challenge, particularly with the aspect of their employee relations which concerns connection with trade unions. For McDonald’s trade union is considered as one of the hindrances in their overall structure and standards because the company believe that having a third party involve can affect sound relationship between the management and the employees, this is the reason why the company is integrating factors including communication and training in order to over pass the role of trade union towards the company and the employee.
Out of the three countries, Singapore can be considered as the friendliest nation, in terms of the employment laws and environmental and social factors that can affect their relationship with the employees. This is because Singapore has an authoritarian corporatist government which views politicized trade unions as having the ability to damage and weaken political regime, at the same time, affect the wage demands (Pereira, 2002). However, in order to maintain fairness and equality between the rights of the employees and employers (even though, it is clear the employment laws of the country is pro-employer), the government give the employees the rights to decide whether join or not a trade union. However, negotiations between employers and unions are also set every three years, because the government believes that less frequent negotiations can help to reduce work stoppage (Pereira, 2002). In addition, it is also important to consider the economic condition of the country, labor is considered as the edge of the country with other Asian countries, because the country is lacking of resources, as a result, in order for the government to attract foreign investments to improve and maintain the economy of the country, it has create a business-friendly environment.
This is somewhat different with the condition in Germany. The McDonald’s corporation was aware that the company will be having difficulty in dealing with the German market, due to the fact that the nation is considered as having strong institutional arrangements and legislative underpinning, which made the country as the test case for MNCs (Royle, 2002). The country has a dual structure of interest representation; where in, the employee account at board and workplace level is divided from the collective bargaining system. Furthermore, the collective bargaining is centralized and policies are coordinated at sectoral level (Royle, 2002). This policy is considered as disadvantageous for the company because, the company has to focus on changing their standards and structures in order to come up with the expectations of the market. As a result, this policy had affected the image of the company in the country, particularly due to the pressure from different unions and organizations.
In the United States, different laws and policies are more in favor of the employers than the employees compare with any industrialized countries in the world. In the country, the rate of McDonald’s employee who belongs to trade union is low due to the different factors. First, unlike in the first two countries, there are different owners of restaurants due to franchise. Therefore, there is a decentralized management in terms of human resource management. As a result, it is hard for to create union because there are different individuals or group to communicate or connect to.
There are different studies which shows that working conditions in fast food industry is relatively low, thus it shows the reason behind high turnover rate in the said industry. This situation can be observed in the three countries; however, McDonald’s Singapore is facing least challenges regarding this problem. This can be attributed to the social and environmental conditions in the country. The salary that can be earned in the company, particularly as a crew is considered as higher compare with other industries in the country. In addition, due to tropical weather, having to work in air conditioned room is considered as a convenience for them, together with the fact that they can avail of free meals. In addition, in spite of the pro-employer bias in the country, the state had been able to have legislated measures in order to offer basic protection for the employees. “The law in the country provided for 44 working hour ever week, 7 days paid annual leave, 11 public holidays, 28 days paid sick leave, 2 months paid maternity leave and overtime rate of time and half and double time on Sundays and public holidays” (Perry et. al., 1997 cited in Pereira, 2002). This is somewhat the same with the action of the German government which mainly focus on the aspect of maintaining fair and inclusion in the working place, including the aspect of race, ethnicity, gender and even disability. This is expected because European Union (UN) is considered as the first region in the world which focuses on the inclusion of these minority groups. Based on these factors, it can be said that United States is the least friendly towards the employee in the fast food industry. This is because American employers have much more freedom to institute the conditions of employment compare with their counterparts in other industrialized countries, due to the tremendously low rates of unionizations and a legal framework which shows the countrywide valorization of free enterprise (Leidner, 2002). On the contrary of the EU, American law bestows workers with a small amount of positive rights; to a certain extent, it obliges nominal limitations on employers by create what they cannot do (Rasnic, 1995 cited in Leidner, 2002).
Based on the information presented in the first parts of the paper, it can be said that Singapore is friendlier to the employees compare with Germany and the United States in terms of policies and standards. This is in spite of the fact that, McDonald’s had been able to apply their global standards in Singapore than in Germany. As a result, due to the different political, environmental and social factors in the three countries, it is vital for McDonalds and other players in the fast food industry to focus on improving their employee relationship. Employee relations is a vital factor for any companies in the fast food industry, particularly in McDonald’s, which is considered as the biggest name in the said industry. The company has been able to apply different strategies in order to ensure that they are following the policies and standards of different organizations, particularly in the said three countries. In Singapore, in order to come up with the decreasing number of employees available for crew position, because most of youth in the country focuses on other types of job, it took advantage of the growing number of older employees. As a result, McDonald’s have been able to maintain the level of their human resource, at the same time improve their image and social responsibility by inclusion of older employees in the company. This is the same with what the company implemented in the United States and Germany, where in the implementation of more intensive training is ongoing in order to come up with the expectations of individuals that are seeking for managerial positions. In connection, the company is also implementing application of different technologies and innovations that will help to improve the communication process inside and out of the organization. As a result, it gives the workers, particularly those in the managerial positions to feel that what they are doing is nothing but monotonous tasks every day.
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