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Paradigm lost: the rise and fall of McDonaldization

Stephen Taylor and Phil Lyon Mass customization offers an alternative paradigm to McDonaldization Introduction
Too many service companies have been slow to invest in the new market opportunities and flexible technologies available to them. They have stayed with their old concepts too long and have concentrated on cost-cutting efficiencies they can quantify rather than on adding to their product value by listening carefully and flexibly providing the services their customers genuinely want[1]. traditional eating houses are pared away to a new minimalism of finger food, fast-moving queues and DIY table clearing[5].

In a recent publication, The McDonaldization of Society, Ritzer[2] has argued that the principles behind the successful McDonalds fast-food empire are neither restricted to that organization nor to the fast-food sector. They are, he believes, a blueprint for the organization of all manner of social enterprises from medicine to family holidays; from higher education to hotel chains. Commentary on the industrialization of service is not new[3,4], but concern about the implications is extended by Ritzers work. McDonaldization is both a literal critique of food production/service arrangements and a metaphor for standardizing forces in the wider society. In an earlier article[5] we took issue with Ritzers thesis and argued that, in looking for examples to prove the point, contradictory evidence had been overlooked especially from the hospitality field. In this article, we develop the critique in terms of mass customization and give thought to the implications of the points raised.

Ritzer sees also the development of a model, or paradigm, for other organizations, and industries and defines McDonaldization as the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world[2, p. 1]. At the heart of this movement, there is a self-reinforcing cycle:
In the world of mass production, consumers accepted standard goods; their acceptance facilitated the extension of the market and the reduction of prices, through increasing economies of scale; and the growing gap between the price of mass-produced goods and that of customised goods further encouraged the clustering of demand around homogeneous products[6].

A number of principles underpin this self-righteous management system. These are summarized in Pines[7] mass production reinforcing loop (see Figure 1). At the heart of this paradigm is the quest for efficiency through stability and control. But, like Henry Ford and his Model T or Ray Kroc and the technocratic hamburger[8], we have become seduced by the means and forgotten its ends. The genie has become the master and we its slave. This corresponds to Ritzers use of the term iron cage for McDonaldization, which is but a particular manifestation of the mass-production principle. To this extent, Ritzer has a point but, in our view[5], he makes a number of awkward assumptions which limit the validity of the critique. The first is that McDonaldization is inexorablewe confront a future of accelerating McDonaldization[2, p. 158]It[McDonalds]will be remembered as yet another precursor to a still more rational world[2, p. 159]. Second, McDonaldization is bad because it tends to limit alternatives. This overlooks the positive role served by fast-food operations. Millions of people use them[9,10] and they are part of a longer-term social change in which domestic eating assumes the status of a weekend and special-occasion

McDonaldization
McDonalds has had a tremendous impact on high-street dining patterns. It is remarkable not only for its spread from the USA to all parts of the world, but also in its propensity to spawn a range of similar restaurants. Major competitors/clones are also widespread:
Few people can be unaware of the McDonalds system of food production and consumption. If you want a standardized product wherever you are and you want it without delay, then the fast-food restaurant has many advantages. The customs of food consumption embedded in
International Journal of Contemporary Hospitality Management, Vol. 7 No. 2/3, 1995, pp. 64-68 MCB University Press, 0959-6119

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Figure 1. The paradigm of mass production as a dynamic

system of reinforcing factors
New products Long product development cycles Mass production processes

flexibility rather than brittleness. There are echoes of Burns and Stalker[15] here for those with long memories. Looking at these criticisms of Ritzer, we suggest that perhaps the greatest single deficiency in Ritzers analysis is that, while he correctly delineates the weaknesses of mass production, he fails to see that inherent within this process is a potential which is both very exciting and liberating. Like a phoenix rising from the ashes is the brave new world of mass customization.

R
Long product life cycles Stable demand

Low-cost consistent quality standardized products

The new paradigm: mass customization

As with every other mass producer, the fast-food sector has reached the limits of the old paradigm. McDonalds, once the archetypical traditional and conservative company, saw that the old rules no longer worked. Price competition had become fierce, its core market was saturated, its traditional price/value relationship eroded owing to rising costs coupled with shifting demographics and changing eating habits[16,17]. Mass production for homogeneous markets is no longer enough and, as Crawford-Welch observes:
The emphasis on new product development and introduction in the hospitality industry was, in essence, a response by corporations to the plurality of the marketplace and the diverse price/value needs of multiple market segments. In todays hospitality industry there is no such thing as a mass market. Mass markets are a vestige of the past[18].

Homogeneous markets

Source: [7, p.27]

hobby[11]. Further, standardization of production can release staff to concentrate more on service quality. A recent confession indicates a growing realization that there may be benefits in crafting a more positive customer experience and not just focusing on the speed of order processing:
Customerstold McDonalds they were loud, brash, American, successful, complacent, uncaring, insensitive, disciplinarian, insincere, suspicious and arrogantWe thought we knew about service. Get the order into the customers hands in 60 seconds that was service. Not according to our customers. They wanted warmth, helpfulness, time to think, friendliness and advicewe had failed to seethat our customers were now veterans in the quick-service market and their expectations had gone through the roof. What was revolutionary in the seventies was ghastly in the caring nineties[12].

Todays successful companies are dancing to a new tune in this age of diversity[19]. At the core of this new paradigm is the creation of:
Variety and customization through flexibility[20] and quick responsiveness[21]. This is the controlling focus ofmass customization[which shares]the goal of developing, producing, marketing and delivering affordable goods and services with enough variety and customization that nearly everyone finds exactly what they want [emphasis in original][7].

The third point is that McDonalds only adapt their products in a superficial way. The system is allimportant. Ritzer, however, fails to see the clear evidence of some substantial changes in McDonalds and McDonaldized organizations. For example, in McDonalds today the average menu contains 33 items. That is 25 per cent more than in 1980. Even more radically, McDonalds is currently test-marketing a new Golden Arches Caf concept and a McDonalds Express concept[13]. Finally, there are those who have lost faith in increasing rationalization as the answer to production inefficiencies. Warnecke[14] suggests that further automation, or even industrialization, of service will not provide the answers unless the benefits of such production changes are used intelligently. Although the argument uses the language of fractals and chaos theory, the message is reassuringly straightforward systems must be dynamic and adjust to their often turbulent trading environments with

Ultimately this becomes another self-reinforcing cycle: meeting customer demands leads to higher profits, which in turn facilitates the organizations ability to increase its customization capability, which in turn stimulates further market fragmentation[22]. This reinforcing cycle identified by Pine[7] is shown in Figure 2. Mass customization, as the originator of the phrase, Davis[23], acknowledges, is an oxymoron the combining of apparently contradictory concepts. In the good old days things were very straightforward: low unit costs required high volumes, thus standardization; customization was driven by low volumes and high unit costs. The advancements in technology and the contemporary management approaches it underpins allow us to realize the impossibility of customized outputs on a mass basis. Mass customization is ultimately an umbrella for a large

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Figure 2. The new paradigm of mass customization as a

dynamic system feedback loop
Product technology Process technology

New products

Short product development cycles

Mass customization processes

R
Short product life cycles Demand fragmentation

Low-cost high quality customized products

Dominos, Kentucky Fried Chicken, and Taco Bell all varied their output and began to exert significant pressure on McDonalds. The competitive response began with the introduction of a special breakfast menu (Egg McMuffin), then in the latter part of the 1980s output variety mushroomed throughout the sector. In the 1990s, in the USA at least, McDonalds offer has expanded to include: pizza, chicken fajitas, breakfast burritos, submarine sandwiches, spaghetti and meatballs, bone-in chicken, a grilled chicken sandwich, carrot and celery sticks, fresh-ground coffee and even bottled water[17, p. 117]. Indeed the total number of existing menu items or new products currently being test-marketed is estimated at over 150[7]. To achieve this radical expansion in its output variety McDonalds underwent a paradigm shift characterized by shorter development and production cycles[25], flexibility, autonomy, process innovations and the adoption of a true customer focus[7]. The process of new product development is now undertaken at both a headquarters level and at individual unit level. Franchisees can innovate to ensure a closer fit with their own unique customer environment[17]. Now, even at McDonalds, customers can have it their way. You dont want pickle?, You got it! Just how different is mass customization from mass production? The key differences are highlighted in Table I. A critical aspect, and arguably one that really lies at the core of the difference between the two paradigms, is the reversal of the importance of products and processes. In mass production the product is developed first and then the focus shifts towards the process needed to produce the product so that the process becomes permanently coupled to the product. The most graphic illustration of this is Fords Model T. In 1927, in the face of a huge slump in demand, Ford had to cease production and spend the next one-and-a-half years re-tooling his factory for a new product the Model A[26]. With mass customization, it is the processes which are created first not the products and these remain permanently decoupled from the products. Whereas mass production essentially lowers costs through economies of scale, mass customization utilizes economies of scope as its main lever on costs. Many of the recent advances in management previously alluded to e.g. kanban, lean production, compression of the new product development process and so on are the means by which this can be achieved. It should be obvious given the clear differences between the two approaches that a successful shift from mass production towards mass customization requires a substantial refocusing within the organization as highlighted in Table II. Ultimately, the pressures of increasing competition cause a realization that optimal performance requires a sharper focus on its distinctive or core competences[27-30]. This in turn, is linked to a firms

Heterogeneous markets

Source: [7, p.45]

number of other elements within the firm. These include, for example, new business strategies such as kanban, kaizen, TQM, empowerment, internal marketing, supplychain management, electronic data interchange, IT-linked network organizations[24], lean production and business process re-engineering. Mass customization is the product of the interplay and mutual reinforcement of many such elements. At the core of this enlightenment is a shift away from the mechanistic parts/wholes interpretation of the universe as exemplified by Newton[7, p. x]. Simply, when applied to business, the argument is that the organization is the sum of its parts. An alternative approach and one that any hospitality professional intuitively embraces is that the parts (e.g. the employees) are the whole (the organization) from the perspective of the customer. In short, the customer perceives the organization in holistic terms. The intellectual challenge is thus to perceive that mass is to whole what customization is to parts[7, p. xi]. The extensive standardization of McDonalds, vilified by Ritzer, has experienced the same sources of discontinuity as other mass producers, creating extreme pressure for change. Arch rival Burger King, having failed to beat McDonalds at its own game, changed the rules and embraced the principles of mass customization Have it your way! and sometimes youve gotta break the rules!. Here the focus is on the hamburgers and fries but this was simply a foretaste of a much more significant shift. The fast-food sector became increasingly competitive during the 1980s, and companies such as Pizza Hut,

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Table I. Mass customization contrasted with mass production

Mass production Focus Goal Efficiency through stability and control Developing, producing, marketing, and delivering goods and services at prices low enough that nearly everyone can afford them Stable demand Large, homogeneous markets Low-cost, consistent quality, standardized goods and services Long product development cycles Long product life cycles Mass customization Variety and customization through flexibility and quick responsiveness Developing, producing, marketing, and delivering affordable goods and services with enough variety and customization that nearly everyone finds exactly what they want Fragmented demand Heterogeneous niches Low-cost, high-quality, customized goods and services Short product development

Key features

Source:[7, p. 47]

Table II. Critical shifts in functional focuses under mass

customization Functional area Production Research and development Marketing Critical shift in focus required in moving from mass production to mass customization From production or operational efficiency towards process efficiency From breakthrough innovations towards continual incremental innovations From selling low-cost, standardization products to large, homogeneous markets, towards gaining market share by fulfilling customer wants and needs From external financial reporting towards manager and worker useful information

nearly three decades this approach worked, but the widespread success of the process set the scene for its downfall as customers expectations rose through the very act of consumption itself. We predict that future success will be enjoyed by those organizations that understand the need to reassert the importance of differences among hospitality consumers rather than seek mass similarities. Vive la diffrence!

Finance and accounting Source:[7]

resources and the generation of revenue[31]. This resource-based view of the firm, which is rapidly gaining popularity among academics, views a firms capability as residing upstream from the end-product it resides in skills, capacities and a dynamic resource fit which may find a variety of end uses[32]. This is the essence of Pines operationalization of the mass customization concept.

Full circle?
Has the industry ended up where it began? McDonaldization replaced the variability of production inherent in the Mom and Pop operations of the 1950s with a standardized process which output a quality product at a reasonable cost. McDonalds QSC (quality, service and cleanliness) was a source of customer reassurance, an invitation to a known experience. For

Notes and references 1. Quinn, J.B. and Gagnon, C.E., Will services follow manufacturing into decline?, Harvard Business Review, November-December 1986, pp. 95-103. 2. Ritzer, G., The McDonaldization of Society: An Investigation into the Changing Character of Contemporary Social Life, Pine Forge Press, Newbury Park, CA, 1993. 3. Levitt, T., The Marketing Imagination, Free Press, New York, NY, 1987. 4. Teboul, J., De-industrialize service for quality, in Johnston, R. (Ed.), The Management of Service Operations: Proceedings of the Operations Management Association (UK) Annual International Conference, IFS Publications, Bedford, 6-7 January 1988. 5. Lyon, P., Taylor, S. and Smith, S., McDonaldization: a reply to Ritzers thesis, International Journal of Hospitality Management, Vol. 13 No. 2, June 1994, pp. 95-9. 6. Piore, M.J. and Sabel, C.F., The Second Industrial Divide: Possibilities for Prosperity, Basic Books, New York, NY, 1984, pp. 190-1. 7. Pine, B.J., Mass Customization: The New Frontier in Business Competition, Harvard Business School Press, Boston, MA, 1993. 8. Sasser, W.E., Olsen, R.P. and Wyckoff, D.D., Management of Service Operations: Text, Cases, and Readings, Allyn and Bacon, Boston, MA, 1978, pp. 61-4.

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9. MSI Databrief: Fast Food UK, Marketing Strategies for Industry (UK), London, 1991. 10. The Times, McDonalds, (special feature), 30 September 1994. 11. Blair, K., Appetite for bigger slice of pizza sales, The Scotsman, 18 October 1994. 12. Donkin, R., No relish for cheese and pickle sandwich, Financial Times, 28 October 1994. 13. Crawford-Welch, S., Product development in the food service industry, in Teare, R., Mazanec, J.A., CrawfordWelch, S. and Calver, S. (Eds), Marketing in Hospitality and Tourism: A Consumer Focus, Cassell, London, 1994. 14. Warnecke, H., The Fractal Company: A Revolution in Corporate Culture, Springer-Verlag, Berlin, 1993. 15. Burns, T. and Stalker, G., The Management of Innovation, Tavistock, London, 1961. 16. For example, the healthy eating trend has led to lower fat products such as McDonalds McLean Burger and Kentucky Fried Chickens Liten Crispy skinless fried chicken. 17. Scarpa, J., McDonalds menu mission, Restaurant Business, 1 July 1991. 18. Crawford-Welch, S., Product development in the hospitality industry, in Teare, R., Mazanec, J.A., Crawford-Welch, S. and Calver, S. (Eds), Marketing in Hospitality and Tourism: A Consumer Focus, Cassell, London, 1994, p. 169. 19. McKenna, R., Marketing in an age of diversity, Harvard Business Review, January-February, 1991, pp. 65-79. 20. The term flexibility and its operationalization can be problematic. See Upton, D.M., The management of manufacturing flexibility, California Management Review, Vol. 36 No. 2, Winter 1994. 21. There is a paradox here in being able to tailor output yet retain the responsiveness associated with a standardized output. For tactics on how to resolve this see McCutcheon, D.M., Raturi, A.S. and Meredith, J.R., The

22.

23. 24.

25.

26. 27. 28.

29. 30.

31. 32.

customization responsiveness squeeze, Sloan Management Review, Vol. 35 No. 2, Winter 1994. For a discussion of market fragmentation and, in particular, psychographic fragmentation see MuellerHeumann, G., Market and technology shifts in the 1990s: market fragmentation and mass customization, Journal of Marketing Management, Vol. 8 No. 4, 1992, pp. 303-14. Davis, S.M., Future Perfect, Addison-Wesley, Reading, MA, 1987. The development and deployment of American Airlines SABRE system is an excellent illustration of this. See Hopper, M.D., Rattling SABRE new ways to compete on information, Harvard Business Review, May-June 1990. The launch of McDonalds McLean Burger is a case in point. Although the development process took three years and cost $2 million, the test-marketing prior to full launch was an incredibly short four months. McDonalds historically utilized a very protracted roll-out process for new product launches (see [18]). McNamee, P.B., Tools and Techniques for Strategic Management, Pergamon, London, 1985. Andrews, K., The Concept of Corporate Strategy, Dow Jones-Irwin, Homewood, IL, 1971. Ansoff, H.I., Corporate Strategy: An Analytical Approach to Business Policy for Growth and Expansion, McGrawHill, New York, NY, 1965. Selznick, P., Leadership in Administration: A Sociological Perspective, Harper & Row, New York, NY, 1957. Prahalad, C.K. and Hamel, G., The core competence of the corporation, Harvard Business Review, May-June 1990. Penrose, E.T., The Theory of the Growth of the Firm, John Wiley, New York, NY, 1959. Mahoney, J.T. and Pandian, J.R., The resource-based view within the conversation of strategic management, Strategic Management Journal, Vol. 13, 1992, pp. 363-80.

Stephen Taylor is a Lecturer in Marketing and Phil Lyon is a Senior Lecturer. Both are based at the University of Dundee, Dundee, Scotland, UK.