Zhou Xiaobu runs from one end of a table to another, grasping a piece of a puzzle she and her team are assembling as part of a leadership training exercise for McDonald’s Corp managers.
“Go, go, go,” yells their Taiwanese teacher, exhorting them to work for the prize, a box of Danish butter cookies, for being the first to build the company’s trademark Golden Arches. Above their heads is a sign that reads: “Learning today, leading tomorrow.” The thick green binders stuffed with paperwork on each of the 31 students’ desks indicate the next activity may not be as rousing.
This is McDonald’s Hamburger University in China, and it can be harder to get into than Harvard.
Zhou’s classroom, with its grey walls and carpet, is one of seven in the management training centre occupying the 20th floor of the 28-storey building on the outskirts of Shanghai that houses McDonald’s China headquarters. The art consists of pictures of McDonald’s products and equipment, such as a milk- shake maker from the 1950s.
The 1,565 square metre facility doesn’t have a pool or a gym and its one-room library holds books with titles such as “Just Listen,” “Personal Accountability” and “None Of Us Is As Good As All Of Us: How McDonald’s Prospers By Embracing Inclusion and Diversity.”
There’s a coffee machine in the corridor. There’s no cafeteria, although students and staff can order food delivered to the office pantry one floor down.
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“I’m thrilled and proud to attend Hamburger University,” said Zhou, who in 2007 started as a management trainee in the central Chinese city of Changsha, a job for which she and seven others were among 1,000 applicants. That’s a selection rate of less than 1 per cent, lower than Harvard University’s record low acceptance rate last year of about 7 per cent, according to the school’s official newspaper.
To get to the training centre, Zhou competed with 43 other workers at her store to be made first assistant manager. She didn’t pay any tuition; it cost McDonald’s about 10,000 yuan ($1,518) to put her through the five-day course.
The world’s biggest restaurant operator moved the training centre from Hong Kong last year as it expands in mainland China, where its market share is less than half of KFC owner Yum! Brands Inc. McDonald’s opened a record 165 restaurants in 2010 and will accelerate that growth this year to meet its goal of 1,000 new outlets in the four years through 2013.
“They are preparing a base that will allow them to accelerate that rate of expansion,” said Peter Jankovskis, co-chief investment officer of Oakbrook Investments LLC, which holds about 300,000 McDonald’s shares. “They may well have announced a conservative store opening target and their true plan is much greater.”
The school last year trained 1,000 of the almost 70,000 employees McDonald’s has in mainland China, a region that doesn’t include Hong Kong, Macau or Taiwan.
Another 4,000 people will attend classes at the training centre through 2014, said Susanna Li, the head of the training centre. The classrooms are equipped for simultaneous translation into English, Mandarin and Cantonese to accommodate students from Hong Kong and teachers from overseas.
“We’ll make sure the people pipeline is ready,” Li said. “Having the school here in China helps us provide training faster than sending students to Hong Kong.”
Total sales for fast-food chains in China rose 12 per cent last year to 60 billion yuan, according to London-based researcher Euromonitor International. Yum’s restaurants, which include Pizza Huts as well as KFCs serving fried chicken alongside Chinese dishes, accounted for 40 per cent while McDonald’s had 16 per cent, the researcher said.
Oak Brook, Illinois-based McDonald’s has 1,300 stores in China and aims to have 2,000 by 2013. Yum has 3,700 restaurants in China, where it earned 44 per cent of its $1.33 billion operating income in the first three quarters of last year.