Environmental factors are identifiable elements in the physical, cultural, demographic, economic, political, regulatory, and technological environment that affect the survival, operations, and growth of an organization. A global organization such as McDonalds has to take into consideration these environmental factors to continue to grow outside the borders of the United States. This paper will analyze global economic interdependence, the effect of trade practices and agreements, the influence of cultural differences, the effect of political systems, and the influence of international relations in relation to McDonalds. This paper will also analyze the importance of demographics and physical infrastructure, the concepts of social responsibility, and the ethical and legal obligations of McDonalds. . An explanation of the effects of technology and the influence of the Foreign Corrupt Practices Act of 1977 as well as the influence of local, national, and international legislation on Target policies and practices, are included.
The influence of global economic interdependence and the effect of trade practices and agreements are a determining factor in what countries the franchise has moved to. The fast food giant also has to deal with different cultural differences along with environmental concerns when it sets up a store in a different country. In various cultures these issues are vital and other cultures it is not a concern. McDonald’s should follow legal conditions in countries that influence social and environmental practices, and still meet the expectations of locals on these matters. These aspects should be understood and well thought-out when creating marketing plans if not McDonald’s could not gain the respect or trust locally and globally as a company.
One of main points that the company has to look at when doing business outside of the United States is the importance of demographics and physical infrastructure of the host country. When company’s like McDonald’s do business globally they must have a complete understanding and respond to all the environmental factors involved and the right marketing decisions. The environmental factors that McDonald’s face in marketing situations are cultural and legal parts of doing business in a foreign country and customs and views on social responsibility, beliefs, and the surroundings. These different factors can have a huge impact on the choice of product, price, promotion, and the location of the business. McDonalds can accomplish this by changing their menu to suit the individuals in the host country such as no beef in India.
It will not be easy for the company to operate in different countries as one may think; there are different cultural ideas that have to be tackled. The different business ethics of another country would have to be examined first, not all countries operate their businesses the same way that we do in the United States. Some of our business practices may not be accepted in another country and may even be seen as dishonest. McDonalds would have to adapt to the culture of its host country, they could not expect the host country to change its methods just to suit the fast food franchise.
Another key point to be looked at would be the effects of the political system and the influence of international relations. Before any contracts are drawn up or any type of pricing is negotiated the company needs to investigate the laws, regulations and business ethics of the potential host country. The fact that the negotiations will most likely be taking place in different time zones will mean that a schedule has to be set up and if at all possible translators would be a good idea. If McDonalds wants to be successful in going global then these are just a few of the points that need to be looked at and dealt with.
When doing business in another country McDonald’s has to adapt to the culture of the country doing business. McDonald’s must understand the regulations and laws, needs of the customers, how to manage the employees, language barrier, and able to conduct business with other trading partners and suppliers in the different areas of the business. One of the most difficult task to overcome is the culture of the country. McDonald’s would not want to do anything that was unethical and offend someone. An example would be if a United States company does business overseas that country may not enforce the same laws as in the United States, this could mean the United States Company is breaking a law the business believes strongly about. A misunderstanding like this could be the reason that a deal falls through and the company is either denied the ability to open up the franchise or if already set up be asked to leave the host country.
These characteristics make it problematical to build up a mutual image of business ethics. One believes these challenging occurrences are less important in the company’s global procedures, if the business can set their own global standards in business ethics. Managers are responsible in creating and maintaining a good working team. Ethical responsible management can help avoid social issues such as racism, personal arguments, harassment, and snide remarks issues like this can cripple a company. It only takes one sexual harassment lawsuit or racial prejudice lawsuit for a company to gain a bad public image, and in some more conservative countries that could spell big trouble. As I stated earlier the business practices in the United States are more than likely not going to be the same as those of another country. This is the main reason that the company needs to do its research before it sets up shop in a foreign country, just to avoid any mishaps.
As for the influence of The Foreign Corrupt Practices Act of 1977 it makes sure that all McDonald’s employees follow the correct training procedures. Every restaurant has a set of guidelines that employees are trained on and have to follow. The employees complete trainings on laws, regulations and company policies. The company has global compliance officers who monitor the company’s policies and enforce them.
The advancements in technology have had an impact on the franchise as well. The franchise is constantly changing appearance of their restaurants to keep with current fads and some have begun to offer free Wi-Fi as well. There have also been advancements in food preparation and storage that is helping to make sure that the food that is served is of the best quality and not at risk of getting any one sick.
In order for a business to go global and be successful, whether it be one from the United States or else where they have to do a lot of research into the different laws and operating procedures of the potential host country. If the ones who run the company just want to throw up a business in another country without looking into anything then they run a serious risk of either losing a lot of money in revenue and product costs, or being asked to leave the host country. Just because something works in one country does not necessarily mean it will work in another.