Business is not ethical, business is ethical

Delpha 2021-11-23 08:01:12

The film's focus on McDonald's business growth is on key points, which can quickly illustrate the key to his success, but it is too simple to understand McDonald's business success in this way.

Fast meal delivery, standardization, quality control, and management costs against planned growth are the bottlenecks that modern chain restaurants must overcome.

The original McDonald's solved the problems of standardization and meal speed. In the expansion of the scale, quality control relied on the selection of store managers, management expenses relied on strict franchise agreements and cost transfer (collecting rent without in-depth intervention in management). The movie doesn't say much about details, but the basic logic is this.

Looking back on the success of domestic restaurant chains, hot pot is also completely reasonable. The lowest cost of back kitchen, the easiest to achieve standardization and quality control, Haidilao's compression of management costs relies on the ultra-low rent achieved by the brand's bargaining power, the binding of benefits, and the apprenticeship system to reduce the scale of management costs. There are also high customer unit prices and high turnover rates based on the brand that are higher than the average level, which improves the profitability of a single store.

The reasons for the business differences between Haidilao and McDonald's are obviously more complicated in business than those shown in movies. After all, McDonald's model is not mainstream. Like Haidilao, it is a common practice to improve the profitability of a single store and reduce the management cost of scale, and then rely on new stores to achieve total profit growth. The source of the difference is the answer that can only be obtained by looking at the material carefully.

The director's relationship between business and ethics can actually be discussed more, which is what distinguishes literary works from commercial research. Give me the right answer directly: the success of business can be repeated, but obviously it has nothing to do with ethics. But as a company, there should be an ethical pursuit above profit.

In the movie, the McDonald's brothers questioned Ray's role. Ray's role is to find low management costs (how to choose the right store manager and pass on the cost) to achieve scale. The McDonald's brothers ran through the single-store model and gave McDonald's high-quality quality control genes.

The reason why Lei said that he must authorize and not steal the teacher himself is the name McDonald's. In the movie, Ray’s answer is entirely the answer of a standard marketing background, and it’s the name McDonald’s. The name McDonald's and the image of Golden Arches are a perfect marketing plan. Like churches and national flags, they have become part of the American way of life.

But obviously this is a misunderstanding of marketing. Product and marketing are two sides. A lot of pen and ink was spent in the movie to emphasize the craftsmanship of the McDonald's brothers in quality control. Large-scale chain and high-quality are inherently contradictory, and successful business is about balancing. So from a commercial point of view, Lei is obviously right, and the large-length milkshake powder in the movie is also a sign of food industrialization, and the benefits of food industrialization for large-scale catering operations are self-evident.

Morally thunder is despicable, but the laws of business are so ethical, right and right.

But the subtle part of the matter is also here. Looking at it a little deeper, why does the catering planning conform to the law? The more detailed division of labor and the reduction of the total social cost brought about by it are the main thread of the evolution of human society. Large-scale, industrialization will definitely bring about the reduction of raw material costs, which is impossible for self-employed. All large-scale operations are based on this to achieve the improvement of internal management efficiency to counter the increase in management costs of scale growth. To provide society with better products in all aspects.

To be more specific, the second choice of the manager in the movie is very interesting, which is completely different from the standards of domestic kfc and McDonald's franchisees. Domestically, it requires local resources and can also pay a lot of initial fees. In the movie, young couples who have a sense of responsibility and desire to become rich are selected. This is to create employment for the society and promote the redistribution of resources. The meaning of catering is to liberate the cooks in the family and release productivity.

To provide society with better products and to improve the overall operating efficiency of society is the morality of an enterprise.

And this requires competition.

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Extended Reading

The Founder quotes

  • Dick McDonald: I just have to ask you one thing. Something I've never understood.

    Ray Kroc: Alright.

    Dick McDonald: That day we met, when we gave you the tour...

    Ray Kroc: Uh huh. What about it?

    Dick McDonald: We showed you everything. The whole system, all of our secrets. We were an open book. So why didn't you just...

    Ray Kroc: Steal it? Just, grab your ideas and run off, start my own business... using all those ideas of yours. It would have failed.

    Dick McDonald: How do you know?

    Ray Kroc: Am I the only one who got the kitchen tour? You must have invited lots of people back there, huh?

    Dick McDonald: And?

    Ray Kroc: How many of them succeeded?

    Dick McDonald: Lots of people started restaurants.

    Ray Kroc: As big as McDonald's?

    Dick McDonald: Of course not.

    Ray Kroc: No one ever has and no one ever will because they all lacked that one thing... that makes McDonald's special.

    Dick McDonald: Which is?

    Ray Kroc: Even you don't know what it is.

    Dick McDonald: Enlighten me.

    Ray Kroc: It's not just the system, Dick. It's the name. That glorious name, McDonald's. It could be, anything you want it to be... it's limitless, it's wide open... it sounds, uh... it sounds like... it sounds like America. That's compared to Kroc. What a crock. What a load of crock. Would you eat at a place named Kroc's? Kroc's has that blunt, Slavic sound. Kroc's. But McDonald's, oh boy. That's a beauty. A guy named McDonald? He's never gonna get pushed around in life.

    Dick McDonald: That's clearly not the case.

    Ray Kroc: So, you don't have a check for 1.35 million dollars in your pocket? Bye Dick.

    Dick McDonald: So if you can't beat'em, buy'em.

    Ray Kroc: I remember the first time I saw that name stretched across your stand out there. It was love at first sight. I knew right then and there... I had to have it. And now I do.

    Dick McDonald: You don't have it.

    Ray Kroc: You sure about that?

    Ray Kroc: Bye Dick.

  • Ray Kroc: Look, if you don't wanna make a profit, that's fine.But don't stop the rest of us.

    Dick McDonald: Us?

    Ray Kroc: Us, as in everyone but you.

    Dick McDonald: Who did you send them to?

    Ray Kroc: Everyone but you.

    Dick McDonald: You have no right. You are to stop this instant, is that clear?

    Ray Kroc: Nah...

    Dick McDonald: What the hell does that mean, nah? You will abide by the terms of your deal.

    Ray Kroc: I am through taking marching orders from you... You and your endless parade of NO's. Constantly cowering in the face of progress.

    Dick McDonald: If phony powdered milkshakes is your idea of progress you have a profound misunderstand of what McDonald's is about.

    Ray Kroc: I have a far greater understanding of McDonald's than you two yokles.

    Dick McDonald: What? You will do as we say.

    Ray Kroc: Nope.

    Dick McDonald: You have a contract!

    Ray Kroc: You know, contracts are like hearts... they're made to be broken.