Final Report of McDonald Corporation May 2013 Abstract This Analysis has provided views on several aspects of McDonald’s company basics as well as its operating structure and management styles. Initially, McDonald’s basic company profile and mission are introduced, including its strategies, value and ethical values and practices. Then McDonald’s social and environmental responsibility are illustrated through examples and detailed numbers. The quality of service is also mentioned in the analysis to explain how McDonald’s has performed to satisfy millions of its customers.
Organizational structure of McDonald’s has been examined in this analysis. The topic of how such a massive organization like McDonald’s is operating each of its functional department will be looked into with more details and facts. Several issues and problems have been observed along the McDonald’s operating history, such as the child obesity issue. These issues are also discussed in this analysis. In the end, McDonald’s leadership structure and style are analyzed.
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Through the extensive discussion of four aspects including motivating, emotional intelligence, team work and social skills, general facts and understandings are conveyed to readers. 1. Introduction McDonald Cooperation was founded in 1940 in America; it is also the worldwide largest chain of fast because of its most recognized brand and popularity. It has over 34,000 restaurants in 118 countries and provides service and food to over 69 million people each day. McDonald can create 15 billion annually. In addition, McDonald Cooperation focuses on its social activities to enhance their brand image.
Such as sponsors world cup and football games (WWW. McDonald’s. com). Due to their successful contribution and brand popularization, more and more people are interested in McDonald and be loyal to the company. In addition, McDonald gain lots of reputation and profits during the long history. This report is to explore different aspects, such as mission, strategies, values, external environment, leadership,management, structure and culture to analyze the whole effectiveness is positive in McDonald Corporation. 2. 1 McDonald’s Mission
As a world leading Food Company, the mission of the McDonald Company is to improve their social and environmental performance to satisfy the needs and requirements of the society and communities, the company also tries to cooperate with their suppliers and various restaurants to achieve the sustainable future. Based on the author Glavas and his colleagues, they claimed that the only approach to achieve sustainable business is to integrate shareholders, government and other departments and cooperate together to slove that. (Glavas et al, 2010) 2. 2Strategies
In addition, the company forms a global strategy named plan to win which focuses on customer experience: people, Products, place, price and promotion. Their strategy is to enhance customers` experience. In other words, McDonald Company concentrates on customer experience and thoughts based on their efforts. Choosing the most suitable strategy position can develop their business and adapt to the complicated changing world. 2. 3 Value There are several values established in McDonald Company, the first one is taking customer experience as their core purpose.
They want to provide the best quality and service to attract customers because customers are the main reason for their development and be profitable. The second one is responsible to their employees and make sure that these trained workers all have equal opportunities and promotions for their fair working environment and success future. Another value is to trust their system, McDonald Company uses their existing model which called “three legged stool” to balance the management of their owners, suppliers and employees.
Besides, they also insist on managing their company ethically, which means the business in the company all seek for the high standard of fairness and integrity. In addition, McDonald also takes part in many different activities and help customers to build better communities, such as support the Ronald McDonald House Charities to improve the world a better place. Furthermore, the company also focuses on their business profitably and keep to improve their drawbacks. To achieve these goals, McDonald Company has to keep their system healthy and look for more innovative and productive methods(WWW. McDonald’s.com). 3. Ethical values and practices McDonald’s is as the biggest fast food restaurant in the word. They are focusing their efforts on menu choice, physical activity, and consumer information. Apart from that, they still care about their social responsibility and their commitment to diversity seriously. A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. They follow a standardized process to ensure same quality and it also reduces lead time. McDonald’s is not only concerning their net income and profit, but also caring about the quality of raw material.
In the past 20 years, they devote to improve the sustainability of their supply chain. They will work with suppliers who, over time, follow practices to ensure that agricultural raw materials used for customer’s food and packaging originate from legal and sustainably managed land sources. For instance, their beef burgers are 100% beef with no fillers, extenders or preservatives, just their special blend of salt and pepper added after grilling. Otherwise, McDonald uses palm oil as a direct and indirect ingredient in various products what are better for customers’ health.
In addition to this, as we know, chicken is very significant raw material for McDonald, but sustainability issue does arise related to land use for growth of poultry feed. Therefore, McDonald’s has developed a three-yeas plan to build on past actions and address these impacts going forward. 3. 1 Social responsibility Engaging in corporate social responsibility activities is considered by many as a necessity for any company. The statistics regarding obesity demonstrate the gravity of the problem which 72. 5 million adults in the United States are obese in August 2010. Furthermore, the problem of obesity is particularly of concern for children.
Thus, McDonald’s extraordinarily pay attention to obesity and they change their menu options to offer more healthy and nutritious food. There has been some increase in number of items what are fruits, vegetables and etc. to provide to customers and it also has been 7 years, McDonald’s stopped offering super size sodas and fries. On the other hand, the happy meal offering to children was changed from traditional menu which has a hamburger or chicken nuggets with French fries and soda to automatically include a serving of apple slices and a smaller serving of French fries.
The marketing of nutritional food choices is a major emphasis in the McDonald’s corporate social responsibility report. (A,F 2011) Furthermore, they also care about children who are illness and poor, then McDonald’s always offers effective medical, dental and education services to them. Some children who need extensive hospital care, McDonald’s also gives them rooms, foods for families are only $10 one day. Apart from that, McDonald’s also sponsor Olympic athletes(http://www. marketingteacher. com/swot/mcdonalds-swot. html). 3. 2 Environmental responsibility
For environmental responsibility, McDonald’s increases adoption of energy-efficient equipment and technology in restaurants. Between 2011 to 2012, these equipment help them to avoid approximately 5 million in energy cost. In the future, they still would lay stress on improve tracking of restaurant energy consumption data and increase energy awareness and education across the system to continue to realize savings to the bottom line and benefits to the environment. 3. 3High quality of service McDonald’s has both indoor and outdoor services.
Otherwise, McDonald’s has its own play places for children. This is special and difference from other competitors’ fast food restaurants. When Parents bring their kids to McDonald’s, kids will get super-fun and stress-free for parents. There are lots of 24 hours open of McDonald’s. While customers enjoy their favorite McDonald’s meal, they still could enjoy free Wi-Fi, they can access the internet using their laptops or PDAs at no charge. For outdoor service, McDonald’s still has drive through to convenient and save time for customers (WWW.McDonald’s. com). 4. Structure including its use of team The McDonald’s structure by department is as follow: at the top are the chairman and chief executive officer, and the chief operating officer. Below that, the departments are broken down into: corporate affairs, marketing, human resources, national operations, regional managers, finance, information, and strategic planning. And there are some other functional departments within McDonald’s like legal, customer services, franchising, security, supply chain and restaurant services.
McDonald’s divided its worldwide market into 5 different segments: USA, Europe, Asia, Pacific, Latin America, Africa and Middle East. Each segment has its’ own management team. Let’s take a look at McDonald’s structure by workgroup in USA. At the top are the president and COO of McDonald’s in the USA, then the workgroup is divided into 3 parts by geography: west division, central division and east division. And there is a president in each division. Below are regional managers, in each region there are market managers, operational managers and regional human resource managers.
After that is the supervisor, then comes the workgroup of a local store: store managers, first assistant, shift managers, and crow persons. The structures in other segments are similar with that of America(Cheffins, 1997). McDonald’s’ daily business is operated by work team in different level. For example in a local McDonald’s restaurant,there are a grill team, a drive thru team, a counter team, and a manager team. Every person on every team must work together in order to deliver their products and service properly, and thousands and thousands of this kind of functional teamwork consist the basic operation of McDonald’s.
Another example is its marketing and advertising team, McDonald’s dedicated a specific team to focus on marketing and advertising, and they turned out to be very successful and valuable to the company, I believe every one of us knows the slogan “I’m lovin’ it”, and know this sign, this is the achievement this work team has bought to McDonald’s(Goldman et al, 2008). 5. Leadership 5. 1 The meaning of leadership In this essay, before we start the McDonald’s leadership style, we should know what leadership is. Leadership is the ability to move a group towards a common goal that would not be met if a leader had not been there (Graham, 1997).
To achieve the goal, leaders will use different methods. There are around three main styles of leadership: autocratic leadership, democratic leadership and laissez-faire leadership (Carlin & Jess, 2012). Autocratic leadership means the leaders would come up with a solution for the entire group on their own. The leaders want everything to follow their orders and want to decide for all the groups when facing some choices (Dessler & Starke, 2004). Democratic leadership is the leader who will take the suggestions from others and will talk more with the staff in order to make a decision for the group (Dessler & Starke, 2004).
Laissez-fairs leadership means the leaders do not give their staff too much guidance and they want their group members make decisions by themselves (Dessler & Starke, 2004). 5. 2 McDonald’s leadership style According to McDonald’s background, democratic leadership style is the best fit, because people who work in McDonald’s are very kind and helpful. Moreover McDonald’s also adopt different leadership skills to educate their employees, such as motivating, emotional intelligence, team work and social skills. 5. 2. 1Motivating
McDonald’s offers employees a various levels of training in order to increase the opportunities. If the employees stay in McDonald’s for a long time, they would have the chance to advance into an assistant manager or manager position (McDonald’s Corporation, 2008). It is very important for young guys and for someone with no learned skills, even for the least educated person. This rule in McDonald’s is the opportunity for those who cannot finish their studies in college or university. All the employees who work hard can have the chance move into a manager position and continue their career in the company.
This rule is fair to everyone who works in McDonald’s, and it can motivate every employee work hard and devote themselves into this company. 5. 2. 2 Emotional Intelligence Emotional intelligence played an important role in the company’s highest level. The more emotional intelligence capabilities the managers have, the more effectively they perform in work (Goleman, 1998). Such as in McDonald’s, Don Thompson as a President and Chief Executive Officer, leads the world’s largest foodservice company (McDonald’s Corporation, 2008). He has emotional intelligence, so “during his 23 years at McDonald’s, he helped drive business results and global strategic innovations across the organization” (McDonald’s Corporation, 2008). He taught his employees to smile to every customer and each other. That is why when we enter McDonald’s, we will feel very comfortable. If a leader has high emotional intelligence, he would control himself very, and he would help the others learn how to treat each other friendly. So a good leader not only can make a great progress, but also he can lead the company into a higher level, what’s more, he can use a democratic leadership to make everyone believe in him and follow his steps.