MCDONALDS PAKISTAN: FOOD AND FUN TOGETHER
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Market Forces Vol. IX, No. 1
College of Management Sciences June 2014
McDonalds Pakistan:
Food and Fun Together
Raza Kamal, Mohammad Zulfiqar Ashraf and Adnan Ali
raza@pafkiet.edu.pk
Abstract
McDonalds is a leading fast food chain that revolutionized the food industry in the world.
In 1980s, many companies expanded into international operations through franchise mode
of business. Though these companies wanted to stick to their original knitting, they had to
attune themselves to regional preferences. McDonalds’ operations in Pakistan are no different
to this theory, but they negated the traditional marketing philosophy of “rule of cumulative
attraction “by locating their outlets where their customer segment is in dense concentration.
McDonalds defied the “rule of cumulative attraction” and “affluent segment being the
trend-setters” by initially locating their outlets in Gulberg, Lahore and Nazimabad, Karachi
instead of “Boating basin” where most restaurants were located. Middle class and working
classes in Pakistan mostly live in Gulburge and Nazimabad. Fast-food industry thrives on foot-
fall of customers and high volume sales at low prices instead of premium pricing strategies.
The very spirit of McDonalds would have been distorted if the general perception amongst
the target market had been that “McDonalds is for the rich”. In 1998, Boating basin a seaside
locality near Clifton, Karachi had turned into a food street and all eating outlets opened with-
in this vicinity being more averse risk project, Pizza Hut launched its outlet in Boating basin,
Karachi in 1993.
Though McDonalds is popular, yet there are many challenges before them. In spite of their
popularity, the different chains are not able to bring much change in their product range and
service conditions. Environmental changes like healthier food preferences, depressive income
levels and variety seeking cuisine requirements dictate that innovative and nutritional value
added products should replace the traditional products.
Keywords: McDonalds Pakistan, Lakson Group of Company, Mission, Fast food Restaurant,
Franchise, Burger market.
The above case was presented and discussed by the main author at AJMC 2013- International Case Conference at Lahore University of Man-
agement Sciences, (LUMS), Graduate School of Business Administration in Jan 2013.
The main author is Associate Professor at PAF-KIET and the co-authors are students of MBA program.
Case Study 59Market Forces Vol. IX, No. 1 Market Forces Vol. IX, No. 1
College of Management Sciences June 2014 College of Management Sciences June 2014
Introduction nationally. (Shamsie, 2005, pp. 692-698). laxing or chatting (Zeithaml et al, 2004, pp. and McDonalds’ operating systems. A Fran-
McDonalds ranks highest on the apex 300-301). In Pakistan, firstly, people consume chise Disclosure Document (FDD) is drawn
of fast food industry. For decades, it has re- Franchising three meals a day; resultantly more usage op- between the two parties to cover all the re-
mained amongst the top hundred companies Franchise is the common mode of interna- portunity exists. Secondly, family rooms are lated formalities.
of Fortune 500. Their operations, all over the tional expansion for all industries. Firstly, this located on the second floor so that conserva- Franchises Network. McDonalds has pres-
world generated revenues to the tune of $ 24 forward integration spreads the risk and in- tive families could find privacy with comfort. ence in more than 120 countries and their
billion in the year 2011. Business consultants vestment among many stakeholders. It is said Similarly, children play areas are towards the revenues from these countries range upto
acknowledge the Company for its excellence that a franchise opens every eight mins in US corner of the building so that their usual din 20% of total revenues; the growth rate in
on operational practices, strategic insight and (William, 2002, pp.100-103). McDonalds has does not become point of annoyance for oth- Middle East/Africa is 6%. (McDonalds annu-
consistent practices. The “golden arches” been successful in their international oper- er customers. alreports, 2011) In India, McDonalds’ outlets
span in more than 120 countries with over ations. Monitoring the franchisee to main- This empowerment to franchisees is not are over 108 and further expansion is un-
30000 locations. This success is not attribut- tain similar standards remains a problem but only restricted to infrastructure but also in derway(Anand, 2007). In 2012, the revenues
ed only to luck but also to exacting priorities, good companies apply extensive rules and the product innovations. It is interesting to have touched $ 6.3 billion (McDonalds India).
steadfast direction and visionary leadership. regulations, training opportunities and strin- note that many of the new products added McDonalds donot have representation in
Ray Kroc perfected the McDonald brother’s gent quality control measures (Thompson et to McDonalds’ menu over the decades were BanglaDesh.
first burger stand in San Bernardino in 1954 al., 1998, p. 313). Every activity is prescribed developed by franchisees, e.g. “Big Mac” was
and set up a fast-food service legendary chain by the franchisor and systematic monitoring developed in 1968 and “Flurry” in 1999 (fran- Critical Service Factors
called McDonalds. He is remembered as vi- is executed to ensure no let-ups. Some entre- chisedirect, 2012). Similarly in India a new The imprints of success are linked to the
sionary who totally revolutionized the cuisine preneurial consultants ascribe this methodol- product called “ McEgg” has been introduced strategy a firm creates for itself. In mid 1960s,
industry to meet the faster-paced lifestyle of ogy as an imitation where tested procesi are since most customers are vegetarian. (Mc- the founding CEO of McDonald laid the pur-
1960s. He fulfilled the customer’s need of de- implemented with no room for creativity or Donalds India, 2011) pose and objectives for the organization; to
siring quick nourishing meal, clean environ- entrepreneurial experiment (William, 2002, Conditions of Franchising. McDonalds emerge as the “best quick service restaurant
mental conditions and friendly service. The pp. 100-103). evaluate a potential franchisee on his/her in the world; provide outstanding quality
instant popularity of this format was attribut- Autonomy in Operations. McDonalds good credit history, business experience, service, cleanliness and value, so that every
ed to environmental conditions prevalent in gives autonomy to the franchisees to design managerial skills and financial soundness. customer smiles” (Hunger et al,. 1996, p.30).
United States in 1960s when expanding work- their own respective ambience and décor. McDonalds grant this mode of business in This became the vision for the organization
force began opting for “eating out”, increase While “golden arches” is always present as three categories. Traditional restaurants in- where the purpose of the organization goes
in single-home families and combining food the logo, yet the interior is diverse across clude restaurants in shopping areas and food- beyond the narrow financial objectives and
with fun. Later, Ray Kroc perfected the fran- the globe keeping in mind the local architec- courts, which are granted a lease of 20 years. strives to win the minds and hearts of cus-
chise mode of business in States and expand- ture and community feelings. At Salen, Swe- Satellite locations includes retail stores, air- tomers by providing them elated satisfaction
ed internationally (Love, 1987, pp.38-52). In den, on the slopes of Lindvallen Ski resort ports, universities and hospitals are granted besides it compels the employees to over-
the 1990s, the performance of McDonalds the building is different and built in a typi- lease for shorter durations while STD and stretch their service. The vision is translated
was not at its best. Other healthier formats cal mountain style where skiers can virtually STR format is applicable to smaller towns. into a mission statement that is, “to be our
were catching up and customers desired va- glide to the counter without taking off their A service fee of 4% of monthly gross sales customers’ favorite place and way to eat with
riety. Another concern was the accusation on skies. On the other hand, in Beijing, China, is charged from the franchisees. McDonalds inspired people who delight each customer
fast-food consumption leading to obesity. In restaurants is a place to “hang out”. They are do not provide any financial assistance to the with unmatched quality, service, cleanliness
these times, the corporate strategy adopted part of the community, serving young, old franchisee. However, training facility is open and value (QSC&V)”. These critical service
was market development by expanding inter- families and couples lingering on while re- to employees to master the specific skill sets factors (CSF) are the core values, which have
60 Case Study Case Study 61Market Forces Vol. IX, No. 1 Market Forces Vol. IX, No. 1
College of Management Sciences June 2014 College of Management Sciences June 2014
served as the beacon of guidance for McDon- ers” or trendsetters in eating habits therefore desire of consumers deter customers from Subway), pizza chain (Dominos, Pizza Hut),
alds for all times. opening an outlet in proximity to this locality remaining brand loyal. The traditional food family restaurant (Café Flo, Copper Kettle),
was a natural choice. Marketers consider so- range is wide and people who relish condi- grill chains (BBQ tonite, Arizona Grill), dinner
McDonalds in Pakistan cial classes and status can play a decisive role ments eat at such joints. The Chinese food houses (Red Lobster,), chicken chains (KFC,
McDonalds granted the franchise license in “influencing” the buying behavior patterns restaurants are mostly popular with families Nandos) and non-dinner concepts (Dunkin
to Lakson Group of Companies for operations of target markets. These early adopters act who desire light meals and more formality Donuts, Starbuck). When mapped on the
in Pakistan in 1998. Lakson Group is a con- as a catalyst in molding the opinions of other in ambience. The western food restaurants depth of product line offered and price, all
glomerate whose business portfolio includes strata of market (Kotler, et al., 2006, pp. 141- comprising of fast-food cafes and diners are firms have similarities as well as differenc-
Tobacco, Insurance and consumer goods. Mc- 147). visited to satisfy desire of change of taste. es. Similarities are narrow product line and
Donalds’ long-term strategy is executed con- Mission as the Guiding Principle. In this Price, variety seeking desire and quality dif- speedy service while they differentiate on va-
sistently in Pakistan though it did tailor the moment of ordeal, the mission statement ferentiates each of these categories (Ahmed riety, price and perceived values. McDonalds
format to the consumer preferences as per served as the beacon of guidance for McDon- s. F., 2010). [Figure-1]. has a narrow product line offered at moder-
the culture of the country, which is covered alds Pakistan. McDonalds wanted to project FIGURE-1 FIGURE-2
in subsequent part of this case study. itself as an outlet for the middle-class work- RESTUARANT CHAINS IN KARACHI FAST FOOD INDUSTRY
Location. McDonalds Pakistan’s first di- ing families where it had been successful and
lemma was; should it open the initial outlet did not want to distort this image. The first High DINER
HOUSES
in Karachi or Lahore? Karachi is a trendsetter outlet was launched in Lahore in Sept. 1998
city while Lahore is more of a city associated and a week later in Karachi in the area of Na- GRILL
CHAINS
with cuisine taste. Should the outlet be locat- zimabad defying previous strategies adopted
Sco e
ed in the posh localities of Clifton (Karachi) or by other chains. Lahore-outlet was located
CHICKEN NON
Price
DINNER PANERA
Gulberg (Lahore) to act as “influencers” for at Gulberg inhabitants known for their liveli-
BREAD
Bundoo
Cooper
Khan
Ketel, BBQ
the rest of the country market? These were ness, vigor, penchant for quality foods. On the
p
PIZZA
double- edged questions confronting the de- other hand, Nazimabad is densely populated
part of the city; where colleges, offices and
Student
cision-makers.
Chatkharey, SANDWITCH
Biryani, KayBee Deli,
Gazebo CHAINS
Low
SWOT. In contrast to manufacturing firms residential colonies are located with majority
Local
who choose the most economical location of middle-class and working class as opposed Low
Price / Quality
High
Limited
Breadth of Product
Full Range
from production or convenience of distribu- to Defence or Clifton, which is the abode of
tion; a service firm will consider a trade-off affluent part of society. Nazimabad is located
between accessibility to target market, im- in the center of metropolis nearly 30 kilome- Classification within Fast Food. Inter- ate price. [Figure-2]
age impact factor and cost; and could ascribe ters from Boating basin. The local populace national chains have been quite successful Market Share. The market share of fast
more preference to any one factor. In 1998, accepted the openings with gusto and soon it in the fast food industry. The newer format food industry in Pakistan is around 13 per-
Boating basin a seaside locality near Clifton, turned out to be a booming business. of western food is perceived as imitation cent. Today the main three players, KFC,
Karachi had turned into a food street and all of western cultural tastes (point of fascina- Pizza Hut and McDonalds have varying pres-
eating outlets opened within the vicinity of Fast Food Industry in Pakistan tion), quicker service and moderate price. It ence with equal perceived image. KFC has
this locality. This locality was more risk averse; Restaurant Industry. Traditional, eastern gained popularity amongst all segments of 43 outlets; Pizza Hut has 47 outlets where-
Pizza Hut launched its outlet in Boating basin and western food segments the restaurant society especially the middle-class families. as McDonalds has only 23 outlets. However,
in 1993. The affluent residing in Clifton and industry in Pakistan. Each category has a large The variety of servings differentiates the fast McDonalds has 43% market share in fast-
Defence area, Karachi, are also the “adopt- customer backing, however variety-seeking food industry in seven categories. These are food industry. McDonalds is quite choosy in
sandwich chains (McDonalds, Hardees, and selecting their locations. The main two me-
62 Case Study Case Study 63Market Forces Vol. IX, No. 1 Market Forces Vol. IX, No. 1
College of Management Sciences June 2014 College of Management Sciences June 2014
tropolises, Karachi and Lahore have eight as a family restaurant since in Pakistan eating market. It rather relies on volume of orders to but in a short span of time this perception
outlets each, while in the remaining five cit- out, is not a luxury, but a recreation. Play sec- give true value with right prices for products. was corrected. Today most staff comprises of
ies there is one outlet each. Approximately tion is invariably a part of each outlet where Student discount and improving usage rate young well-groomed boys and girls who per-
50% market share of McDonald reveals, that children enjoy food with fun. This is a point amongst non-users is its consistent policy. fectly emulate a typical McDonald’s employ-
in spite of reduced presence as compared to of differentiation as compared to its competi- McDonalds restricts itself to chicken and beef ee. In 1990s, waitresses were unheard of in
its competitors the Chain commands the lion tor like Pizza Hut or KFC. Adults desire change offerings but has now also included sea relat- a local restaurant but the McDonald culture
share reflecting more customer acceptability more often; while, children remain more ed items. Customers’ preference for healthier prevailed and educated girls ventured into
(Ahmed s. F., McDonalds, 2010). McDonalds loyal and in Pakistan play an important role food has made them respond by adding sal- this profession without inhibitions. McDon-
has been picking their outlets with adroitness in influencing parents to choose McDonalds ads and other lighter options to their menu. alds requires employees to be always smiling
always maintaining the purpose, “food with outlets. The local management exploits this while interacting with customers. Such a re-
Fun”; launching outlets at Jinnah Internation- psychographic characteristic well. Giveaways Functional Strategies quirement strikes many employees as artifi-
al Airport, Karachi or Drive-in outlet at Clifton usually accompany orders that have a spe- Marketing Problems. In little over a de- cial. The Company has learnt to encourage
beach, Karachi attracts fun seekers automati- cial attraction for children. For the first time, cade, the operations in Pakistan have not managers to probe employees and assign
cally. The latest launch at Atrium Mall, Sadder McDonalds collaborated with children mov- been all smooth sailing. The first threat faced troubled workers to be in kitchen rather than
Karachi helped them become a beneficiary to ie distributors and sponsored movies, Shrek by the company was to convince the public to the order counters (Murphy, 1994, pp. A1,
the public rush at this recreational spot. and Madagascar 2. According to statistics that “halal” meat or chicken is used for prepa- A18). Today McDonalds Pakistan has 1200
Business Strategy. Since the product line gathered McDonalds has a 95 percent suc- ration of products. Soon after the launch, in employees performing different functions.
cannot be expanded, McDonalds imposes a cess rate for their product and promotional 2005, the bird flu had to be combated fol- With stringent measures on Q.S.C&V and
strategic limitation on itself therefore; has launches (www.McDonalds.com.pk, 2012). lowed by,” mad cow” fear. These epidemics training, McDonalds Pakistan meets the cor-
formulated a strong low-cost leadership as The fries packages and big-Macs are de- effected sales but did not deter the company porate standards and extends service to cus-
its business strategy. In the earlier stage of signed attractively to attract children. Lately to lose heart. Rising raw material cost is diffi- tomers with fewer employees as compared
its operation, they had perfected high level the company entered into collaboration with cult to cope up without increasing the prices to its competitors.
of process engineering skills, quality control, a music band, “Kal” as the brand ambassador but had to be kept compatible with the dis- Training. Most outlets serve time is 90
cleanliness and friendly customer service to attract the teenagers towards their prod- posable incomes of the average customers. seconds after receiving orders and 30 mins for
that became the core values of the organiza- ucts. McDonalds has a strong market research There is intense competition from newer for- home delivery anywhere in Karachi. This is due
tion. However, low-cost operation is also de- department to scan the environmental condi- matted chains like Subway, coffee shops and to result-oriented training. It may have been
pendent upon the intensity of footfalls within tions to bring changes in their products as per grilled outlets, which are perceived healthier. difficult to emulate the same “ketch up in the
the premises; another imperative for locating the needs of the changing customer profile. McDonalds also ventures into alliances and veins of employees”, due to lower literacy rate
the restaurant in densely populated locali- (McDonalds restaurants, 2011) collaboration with local enterprises to gain and different set of attitudes. The training at
ties. The prices have to be kept low, service Pricing Strategies. Although Taco Bell impetus to co-branding. Pakistan Internation- McDonalds focuses on three areas, cognitive,
faster and ambience simple but attractive to came up with the concept of “Value pricing” al Airlines (PIA), Ufone and Coca Cola were knowledge learning and behavior modeling.
pull the customers. in 1998 meaning, “giving more for less”, Mc- some leading organizations who have varying Two creative methodologies are used for train-
Food and Fun. The company pursued a Donalds adopted it more readily (Zeithaml et degree of partnerships with the company. ing; Assertive training (AT) where employees
policy of differentiation and distanced itself al., 2004, p.498). Price war as found in the HR Problems. Finding the right human re- inculcate this important trait in life style and
from its competitors, KFC, which stood for beverage market equally applies to the burg- source compatible with the values of McDon- secondly Andragogy learning method based
chicken, and Pizza Hut, which stands for rich- er market. In spite of solid reputation, the ald was another issue that required adroit on a verified system of adult learning. The
ness of food. Instead, McDonalds projected Company does not practice prestige pricing. handling. The workforce in fast food the most important aspect of training is displaying
itself as a place for variety and fun-seekers. Premium pricing cannot be charged in Pa- world over is composed of college students friendly and a caring attitude towards custom-
McDonalds has been successful to emerge, kistan due low disposable income of target of both genders. In Pakistan, this was not so; ers (Ahmed et al., 2010).
64 Case Study Case Study 65Market Forces Vol. IX, No. 1 Market Forces Vol. IX, No. 1
College of Management Sciences June 2014 College of Management Sciences June 2014
Corporate Social Responsibility. The ini- declaration of attitude and outlook. The nine ISSUES bience is necessary in McDonalds’ strat-
tial philosophy of social corporate responsi- components of mission necessarily may not 1. What beliefs and values emerge from egy to cater for local tastes, preferences
bility, “if you are going to take money out of be included in the mission statement as in the vision and mission statements of and cultural habits for the franchisee
a community, give something back” coined the case of McDonald, but is specific as far McDonald? How has McDonalds Paki- outlets?
by Ray Kroc is practiced in McDonalds Paki- as the target market is concerned. Similarly, stan applied them? 4. Choose a few of McDonalds’ outlets for
stan (Reingold, 1992, p.67). The organization profit maximization is not the objective of 2. Customer’s preferences are shifting to service survey. Frame a survey question-
provides material support and encourage- the company as is evident from the number healthier food; do you agree that it dic- naire, conduct a customers’ survey, and
ment to the people who needs it most. Usu- of outlets as compared to its competitors but tates that McDonalds carry out a para- rate each of the outlets on the degree of
ally they support educational, sporting and overkills on the quality decision. Ray Kroc digm shift in its strategy? service provided by them. Analyze your
charity programs. The firm maintains Green once commented, “If I had a brick for every 3. What changes in product range and am- findings.
Park since 2006, in Islamabad in line with the time I have repeated the phrase Q.S.C & V, I
“Green Wave” trend supported by the Mc- think I would probably be able to bridge the
Donalds Environmental Defense Fund (www. Atlantic Ocean with them” (Peters et al, 1987,
McDonalds.com.pk, 2012). The company also p.285). Low profit margin is a characteristic of
supports the Thalassemia Society in Pakistan. fast food industry and therefore McDonalds
Considering the public swing towards health- competes on service standards, lively ambi-
ier food, McDonalds regularly publishes nu- ence and cleanliness.
trition content values of their products on The vision is transformed into firm’s mis-
their web site to educate their customers on sion statement. It is binding on the company
how to choose their menu intelligently. The to devise their operational strategy to remain References
company recommends a 2000-calorie diet aligned to the mission statement always and (2012, Jan). Retrieved jan 25 jan, 2012, from www.McDonalds.com.pk.
to remain healthy. (www.McDonalds.com. every-time. A firm should not digress from (2012, Jan 25). Retrieved from www.McDonalds.com.pk.
pk, 2012). There has been a paradigm shift to its mission statement irrespective of odds re- (2012). Retrieved Jan 25, 2012, from www.McDonalds.com.pk.
Ahmed, F. e. (2010, may 25). Retrieved from www.slideshare.net.
“Better not bigger” strategy in view of health flected by regional trends and customer pref-
Ahmed, F. e. (2010, may 25). Retrieved from www.slideshare.net.
conscious customers. (Meirselles, 2009). The erences. Marketing undergoes changes ac- Ahmed, F. e. (2010, May 25). Retrieved from www.slideshare.net.
Company imports most food related raw cording to the needs of customers however, Ahmed, F. e. (2010, may 25). Retrieved from www.slideshare.net.
material, as no Pakistani company is able to the “Good to Great” companies changes the Anand,R. (2007).” McDonalds in India”, Select Cases in Management, Allied Publishers, New Delhi, pp.468-472
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won three international awards in 2009 for brings them closer to reality.
G, W. (2002, Sept). Keep Thinking. Entrepreneur , pp. 100-103.
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Rs. 30 billion in the country and pays Rs. 10 be relevant? Perpetuity in lifeline is assured Murphy, D. E. (1994, Nov 26). New Retailers told to put a Happy face. Los Angeles Times , pp. A1 , A18.
Peters, T. a. (1997). In Search of Excellence. Thorndike, Maine: G.K. Hall & Co.
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Reingold, E. (Ahmed F. e., 2010) (1992, Jun 29). America’s Hamburger Helper. Time , p. 67.
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“Good to Great” companies do not treat
Zeithaml, V. a. (2004). Service Marketing, Integrating Customer Focus Across the firm. New Delhi: Tata Mc-
the mission as an exercise in rhetoric but as a Graw-Hill.
66 Case Study Case Study 67Market Forces Vol. IX, No. 1 Market Forces Vol. IX, No. 1
College of Management Sciences June 2014 College of Management Sciences June 2014
Gary Hamel:
continuous management innovation. Today, pose----- to what purpose and to what end
most managers do not see themselves as in- are we working; the message will be more
ventors.Companies have wrung out a lot of effective especially if a measure of freedom
slack in their operations to become efficient is also granted to the employees.
The Future of Management and increased their profit; but in this wring-
ing out the slack, they have paid a price. In-
novation does not necessarily come in nine
An inventive company takes a road less
travelled. Hamel points that Whole Food’s
commitment to organic products and sus-
Azmat Ansari to five jobs. It is not possible to create in-tainable agriculture is unmatched. Its stores
azmatansari@gmail.com teresting and innovative things in a hurry. are laid out in such a way that it makes shop-
Where is the incentive for people to dream ping less of a routine and more of an adven-
The message is simple: innovate or die. continuous improvement has been powered the future?A survey showed that less than ture. Today, Whole Food operates 294 stores
Companies who fail to innovate and carve in the belief that ordinary employee, if em- 28 per cent of the employees were fully and generates nearly 600 billion dollars in
new paths for themselves are doomed to powered will solve complex problems. Toyo- engaged in innovating company products. sales. Whole Food’s revenue per square foot
wallow in mediocrity;theycannot be count- ta’s production system is referred to as the Imagine nearly 70% of the time they were was 600 dollars in 2006; double that of oth-
ed up as leaders of industry. They cannot thinking people’s system. In 2007, Toyota paid for being idle. In addition, the gaps dider traditional rivals. Whole Food’s approach
produce iconic products and if they do, the received 540,000 improvement ideas from not pay the companies the added advantage to management revolves round democracy
comparable products of rival industrial units its Japanese employees.The author envis- of engaging their workers to innovative ac- with discipline, trust with accountability,
who innovate still will have a cutting edge. ages an end of orthodox management. In tivity because of the simple fact that there and community with fierce internal com-
Gary Hamel, today’s leading management decades ahead,expecting the present-day was no system for channelizing innovative- petition. Whole Food builds trust among its
consultant from London School of Business managements to be nimble, restless and activities’ leading to innovations. employees in a variety of ways. Every asso-
cites examples of leading fortune 500 com- fast within the existing hidebound organiza- ciate (or worker) has access to the compen-
panies that have excelled due better man- tion and their rigid organizational cultures is Passion can make people do stupid sation data for every other store employee.
agement practices. akin to expecting a dog to do a tango. things, but it is the secret sauce that turns This transparency makes it difficult for man-
Toyota, which evolved and grew into a intent into accomplishments. In many com- agers to play favorites or be idiosyncratic in
dynamic leader in automobile industry, has Hamel defines innovation as,” anything panies, employees are referred asassociates their compensation decision. Whole Food
remained an enigma for its success. Plan- that substantially alters the way in which the and team members to disguise their power- describes itself as a “Community working
ners and analysts after wrecking their brains work of management is carried out or sig- lessness; but mere change of name or termi- together to create value for others.” The dis-
concluded that in Toyota the frontline work- nificantly modifies customary organizational nology does not inculcate creativity. People tinctive principles of Whole Food today are
er is given importance. He is not just a cog forms, and, by so doing, advances organiza- who work with passion and have a sense of love of community, autonomy and egalitari-
in the wheel. He is heard and suggestions tional goals.” General Electric is a case in belonging to a community produce more anism.
coming from him are given importance. The point. It has a matchless record of producing while they stay happy and motivated. Fellow
supervisors have a paternalistic relation leaders. G.E. has remained a market leader feeling is a key to success.
with him. Relentless pursuit of capturing the not just because of its superior products but Bill Gore’s example is interesting. He
wisdom of every employee is what Toyota also because of the superiority of its lead- The author further deliberates that our dreamt of building a company where imag-
has capitalized on. Much of its success rests ers. In spite of the overwhelming superiority corporations focus too much on exhortation ination and initiative would flourish, where
on the pursuit of efficiency and quality. For of innovative management, few companies and too little on purpose. The effect of pep chronically curious engineers would be free
more than 40 years, Toyota’s capacity for possess a well-honed system process for talks by CEOs that would make the workers to invent, invest and succeed. He had con-
give standing ovation is short lived. Nev- ducted a successful experiment in bold and
The author is a journalist (3,000 published articles), playwright (50 plays with ‘Adventure Times’ as the Best Play of the Year), translator, ertheless, if one focuses attention on pur- innovative management principles. He em-
scriptwriter, narrator and producer of corporate videos.
68 Book Review Book Review 69Market Forces Vol. IX, No. 1
College of Management Sciences June 2014
ploys more than 8,000 people in 45 plants Gary Hamel is a leading business thinker
around the world. whose contributions in the area of strategic
management, change management and pres-
Almost all of Google’s 10,000 employ- ent day challenges are not only noteworthy
ees work in teams with an average of three but considered a paradigm shift in modern
or four engineers per team. G mail that is a management. The author says that the aim of
large project might employ 30 people bro- writing the book is not to predict the future
ken into small teams. Every team works on of management but to help you invent it. This
specific service enhancement dimension, is your opportunity to build a 21st century
for instance, all teams have a loose leader- management model that truly elicits honors,
ship structure. Whatever leadership evolves and cherishes human creativity and passion.
moves in rotation so that no one acquires a As for technical values, the book has a beau-
rigid bureaucratic attitude.The breadth of tiful typeface, plenty of white spaces to make
Google’s ambition and its inventions is an in- reading easy on the eye. Not all headlines are
surance policy that promises that Google will in black; most are in grey. The size, dimension
not miss the future.Reinless thinking, fresh and weight of the book are such that when
principles and wisdom ---- these are the foun- you hold it in your hands, it appears that you
dations of a systematic approach to reinvent are really holding a book. This is not so with
management. every book.
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