Academic journal article Competition Forum

McDonalds in Crisis: A Comparative Analysis in a National Organizational Context

Academic journal article Competition Forum

McDonalds in Crisis: A Comparative Analysis in a National Organizational Context

Article excerpt

EXECUTIVE SUMMARY

The crises that affect organizations can often not be of a catastrophic nature. The release of the film Super Size Me was a foreseeable event for the McDonalds corporation in the United States, Australia and the United Kingdom. Each corporation in each nation chose to respond to the challenge of the film and its maker very differently and in so doing some actions had a far greater effect on organizational reputation with consumers, franchisees and government. This paper examines the print media coverage of the issue and uses news hole analysis and media content analysis to gauge the reaction to organizational responses.

Keywords: McDonalds, crisis management, goodwill, reputation management.

METHODOLOGY

This paper has adapted news hole analysis to measure the effect of the film on media perceptions of McDonalds and how this crisis enlarged to encompass the obesity debate. This method, developed by John Naisbitt in his 1984 publication Megatrends, employs 'content analysis of newspapers, magazines and electronic media and works on the principles that the dominant public opinion issues and topics are those that command proportionately larger amounts of space and time...this analysis assumed that what is discussed predicts what key publics are thinking...that coverage in news outlets leads in the formation of issue awareness and position formation' (Heath, 1997, p100).

INTRODUCTION

Before we can analyze the appearance of a crisis for an organization we need to be able to understand the role of issues management in assisting any organization in controlling its environment. The Issues Management Council says an issue exists when there is a gap between stakeholder expectations and organization's policies, performance, products and public comments. Issues management is, according to the Council, a formal management process used to close that gap. Sheehan gives an overview of how this process works in Australian financial corporations (Sheehan, 2004).

Campbell (1999) has identified that most crises fall into "environmental catastrophes, product tampering, major accidents...business scandal." The crisis examples used to illustrate responses by organization usually fall into these areas. The catastrophe or the emergency indicate the preparedness or otherwise of an organization to respond in order to save reputation and reinforce their contribution to the community. Attacks on reputation mostly come from these recognized areas.

Crucial to surviving or managing a crisis is the method of communication. How you communicate with your stakeholders is a vital function of the competitive organization. Many researchers have studied the restaurant chain McDonalds' past performance in responding quickly to a wide variety of catastrophes or emergencies. The show that McDonalds' responses are typically exemplary. Whether it be in response to GM food additives (Seitel, 2004) shooting of staff and customers in California (Campbell, 1999: Seymour & Moore, 2000: Fearn-Banks, 1996: Lerbinger, 1997), accusations of worm meat in hamburgers ( Wilcox et al, 1997) and mad cow disease (Morley, 2002).

In the same way the contrasting reactions of McDonalds Australia, U.S. and UK to the release of the film Super Size Me show both effective and ineffective strategies employed by each national corporation. McDonalds success in dealing with crisis, its familiarity with issues and crisis management best practice leads the author to presume that the organization was 'scouting the terrain' (Heath, 1997) of their environment to spot emerging issues, such as the film, that could produce a crisis. However, the differing responses indicate the success or otherwise of translating environmental signals into action that protects or enhances a company's reputation.

SUPER SIZE ME-A TALE OF EPIC PORTIONS

This paper contrasts McDonalds Australia, U.S. and UK responses in 2004 to the release of the film Super Size Me. …

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