The Business Organization Of McDonalds - Essay Example

The Business Organization Of McDonald’s Mcdonald’s was started back in California the year 1940 by two brother’s Maurice and Richard McDonald after the two had moved their hotdog stand that was then commonly kown as Airdrome from the busy Monrovia Airport to a section of San Bernadino’s Route 66. Upon the realization that hamburgers were actually their most popular selling product, the two brothers quickly reinvented their restaurant and incorporated their Speedee service system into their business in the year 1948. Their Speedee service system was basically a concept that helped the two brothers essentially create a production line for their hamburgers that helped them make their hamburgers even before these burgers happened to be ordered. This innovative concept by the McDonald brothers was a break away from the normal system that was then used by most restaurants that saw them only prepare food once the food happened to be ordered. By utilizing this Speedee system, the McDonald brother’s were able to effectively undercut various competitors in general by a margin of about 50%. When Ray Kroc joined the McDonald’s company in 1955, he joined it as a franchise agent. Kroc bought the rights that helped McDonald’s in expanding the McDonald’s concept outside Arizona and California. By 1959, McDonald’s had expanded and grown into a restaurant chain of about 100 restaurants. Kroc bought the McDonald brothers out of the business in 1961 in negotiations that were seen to have been unfair to the McDonald brother’s as the two brothers lost all their royalties and various rights that they happened to own on the brand that they had started (Shenron, 2009). After Kroc had parted ways with the two McDonald brothers, he built and then officiated the subsequent opening of a new McDonald’s diner that he built relatively very close to the last store that the tow McDonalds brothers owned. Most biographers and historians have perceived this move by Kroc as being rather incredibly petty and inconsequential. Kroc’s move is defended by the McDonald’s corporation as not being vindictive in any way (Shenron, 2009). In 1961, the McDonald’s Corporation opened the Hamburger University, which helped it pioneer the proper training of its various franchising owners. This innovative move on the part of McDonald’s is seen as being responsible for helping the company maintain both its franchisee and manager loyalty despite the harsh and often highly competitive market (Mceachern, 2006). It was during the 1960s that the company went on to develop the face of Ronald McDonald as the company brand’s main face. The company also released the Big Mac Burger during the sixties and the big Mac Burger went on to quickly becoming McDonald’s most popular burger product. It was during the 1970s that the McDonald’s corporation started giving back to the society via its Ronald McDonald House Charity (Shenron, 2009). In an aggressive growth strategy, McDonald’s spread its branches to Japan by 1971 and then on to both China and Russia in 1990. The company also worked on expanding to areas outside the United States and by the year 1995, it was estimated that more than half of all the company’s restaurants were actually located in areas that were outside the United States. By the year, 2000, McDonald’s had grown to serving an estimated over 50 million individuals worldwide on a daily basis (Duiker and Spielvogel, 2013). McDonald’s Corporation is currently perceived as being the worlds’ largest store chain composed of hamburger fast food restaurants. According to McDonald’s website the company is the global leading fastfood service retailer and has an estimated over 34,000 local restaurant outlets in about 119 different countries globally.These restaurants help the company serve over 69 million people each day (aboutMcDonalds’s, 2013). The company employs a franchisees and suppliers business system that are attributed to the success of the McDonald’s Corporation success. The business model allows McDonald’s to be able to constantly deliver a consistent, and locally-relevant restaurant experience to all of McDonald’s customers. The Franchising model has resulted in a situation that has seen an average of about 80% of the McDonald’s restaurants all over the world being locally owned and operated (aboutMcDonalds, 2013). Due to McDonald’s global success, there has emerged the concept of McDonaldization, this concept is seen to define the process by the principles that are commonly at play in the fast food industry are seen to now be dominating both the American and world society in general. McDonaldization as a process is seen to be mainly delineated by a set of five basic dimensions which are, predictability, efficiency, substituting technology for people to achieve control, calculability and the irrationality of rationality (Ritzer, 2012). McDonaldization is seen to have quickly become emblematic of the globalization trend. Discussion of the Aspects of Organization as Machines and Organizations as Brain Organizations as Machines The machine metaphor of organizations is one of the more commonly used Morgan’s organizational metaphors. According Morgan, it is when we start thinking of organizations as being machines that we begin to truly understand them as being rational enterprises that have been well structured and designed so as to achieve certain given predetermined ends. The machine metaphor of organizations is seen to imply the use of certain routine operations governed by job roles that have a well defined structure. The various standards and procedures in a machine structure are noted to be well defined and it is a common expectation that they will all be adhered to. Most of the principles that govern organizations as machines noted as being deeply ingrained into the current notion of how organizations should be able to work. Some of the key beliefs of organizations as a machines include; the organization should essentially be designed in a manner that each employee has only a single line manager so as to avoid confusion, all the employees in the organizations should essentially be managed by certain key objectives of the business, the teams in the organization are nothing more than a representation of the general summation of the organization’s individual efforts, the total labor in the organization should be divided into several specific roles and the organization’s management should ensure that it constantly mains control of the entire organizations in addition to regulating the employee discipline. Although a mechanistic view of organizations is found to be hugely popular in the modern day business world, it should be noted that by managers having a mechanistic view, they will tend to design and run the company organizations as if the company were a mere machine. A mechanistic approach is seen to work relatively well only in the event that the organization works in a stable situation. However, if it so happens that there arises a significant need for change, it has been experienced and observed that most of the organization’s employees might require a major overhaul a factor that is often quite highly disruptive and will often tend to encourage severe resistance. Effecting change in a mechanistic organization is thus noted as being extremely difficult on the part of the management due to the assumptions that are brought into play by a mechanistic view. In order for a mechanistic organization to be able to effectively implement changes in its operations, it will necessitate inspirational vision, strong action by its management as well as relevant control from the top down. The Organizations as Brains Metaphor The gradual transition that saw the move from the previous industrial age an into the information age has been seen to bring several management and leadership changes within various organizations. It has been argued that the machine view of organizations is essentially a closed system and is not able to satisfactorily accommodate the required in the rapidly changing information age environment. It is imperative that all organizations ensure that they progressively become more flexible in nature so as to remain competitive in addition to being able to adequately respond to the growing number of various economic pressures, the extremely rapid pace of change, the expanding globalization, as well as the seemingly increasing influx of both technology and information. The constant need for organizations to be flexible has been seen to precipitate organizational structures that are seen to be inherently leaner, flatter as well as more cooperative (Buono and Jamieson, 2010). As opposed to mechanistic organizations where change is invariably seen to be mostly controlled at the task or action level, the metaphor of viewing organizations as human brain is seen to involve a process of double-loop learning. A double-loop learning system is seen to look at the various variable that are seen to govern actions, this essentially means attempting to understand the deeper assumptions that happen to normally be taken-for-granted underneath the usual operational norms. People are encouraged to attempt and critically examine their own behavior and subsequently take responsibility for their own action or inaction. They are also expected to surface any uncomfortable information that might serve to potentially lead to constructive change within the organization (Buono and Jamieson, 2010). The human brain metaphor is seen to be epitomized in the learning organization. The brain is the body’s main information processing center. The various decisions that are made by the human brain have been noted as having varying effects on the entire body system. If the brain happens to make a raft of poor decision, it is invariably seen that it risks causing dysfunction and harm generally through out the body’s overall system. It is in is in this same vein that ineffective organizations are seen be as a result of severely poorly-designed systems. An organization is seen to allow for people to be able to rise above various “cognitive biases” through the implementation of “system thinking processes”. System thinking is a frame work that allows for the seeing of a myriad of patterns and interrelationships while maintaining an outlook on the whole (Buono and Jamieson, 2010). Learning organizations are noted as being largely self-organizing / self regulating in nature. They are able to self-organize by reframing which in essence is seen to involve their changing of their underlying thought pattern. The various leaders heading a learning organizations actively facilitate reframing via the use of various collaborative learning. The leaders attempt to engage random groups of “knowledge workers” in dialogues pertaining to various issues that are seen to be crucial to organizational development and help it to further promote its development in addition to uncovering the issues that pose as learning disabilities for the organization (Buono and Jamieson, 2010). The brain metaphor for organizations is seen to harbor several disadvantages, some of these include the fact that the double-loop learning system is often elusive and difficult due to the self evaluation and openness that is often required for learning to be effective. People are seen to block the process as they take to engaging in various defensive routines attempting to protect not only themselves but those who happen to be around them when they happen to feel particularly vulnerable or threatened. Another key limitation of the brain metaphor is its self-organizing capacities, the increased autonomy that the process grants to various self-organizing units critically undermines the ability of those who happen to have ultimate power to effectively keep a firm hand on the organization’s day-to-day general activities and developments. The main role played by the leader in these organizations is that of a facilitator of the learning process. However, it should be noted that the full responsibility for potential growth or even lack of growth in this organizational metaphor is seen to still fall on the organization’s leaders (Buono and Jamieson, 2010). Explanation of the Choice of Organization as a Machine and Organization as Brain Metaphors McDonalds is seen to carefully employ production and employee strategies that have been seen to portray it as having mainly organization as a machine while the company’s management can be viewed as leaning towards organizations as a brain tendencies. The McDonald’s corporation can be noted as having carefully managed to balance out these two organizational metaphors and in effect has successfully managed to cancel out the inherent disadvantages of each metaphor while capitalizing on each metaphor’s advantages in its operations and thus emerge with the company’s success formula (Buono and Jamieson, 2010). Analysis of McDonald’s using the Organization as a Machine and Organization as Brain Metaphors Organization as Machine Generally, the McDonald’s retail outlet has been seen to closely resemble an effective machine in a number of ways. First, the different products produced at McDonalds can be noted as always being consistent in its quality. McDonald’s products are found to be consistent irrespective of the socioeconomic, political or international boundaries. McDonald’s can be equated to a machine in its operations and similarly to a machine, it has several key intricate parts that carefully work together so as to be able to effectively produce a consistent output. The pieces that make up each McDonald’s franchise output includes front end clerks, drive thru clerk, the manager, decomposers, the fry guys as well as the back end sandwich makers (Grazziani, 2009). The managers is responsible for effectively controlling and coordinating everyone’s operations while the stores front end clerks are responsible for inputting the customer’s orders into a machine. Once these orders have been fed into a machine, they are then displayed into a terminal at the restaurant’s back end. It is the back end guys who are responsible for making the sandwiches and then dropping the sandwiches into chutes whereas it fall on the restaurant’s two fry guys to ensure that they both fry and package the fries. The restaurant’s front end guy and various drive thru clerks all assist in the fulfillment of the customer’s orders (Epinions, 2007). Decomposers are tasked with the job of cleaning the tables, taking out the garbage and cleaning the bathrooms. As is typical of a mechanistic organization, each individual worker in the store essentially works by feeding of another individual’s work and hence the McDonald’s store operations are seen to work in a similar fashion to the gears in a clock. There are three key themes of a mechanistic organization that are seen to be well embedded into the core processes at McDonald’s. The store is keen to ensure that there is adequate division of labor as it is an important factor in ensuring that the store maintains high levels of specialization so as to produce efficiency. The store’s management at McDonalds is also noted to place well trained individuals who happen to be best suited in performing the tasks that they have been assigned, these individuals were provided with every they required so as to function in an effective manner while eliminating any unneeded steps on their part. Various administrative and bureaucracy principles are utilized at McDonalds as signified by the manager wearing the only yellow shirt while persons working in different job functions are seen to wear shirts with varying colors. Some of the workers wear ties and / or vests which helped to signify leadership (Grazziani, 2009). Organization as Brain McDonalds is recognized as being an extremely flexible corporation. This aspect of McDonald’s is clearly evidenced by the corporations’ extremely large product differentiation. When the company attempt to try and enter any foreign markets, it creates various products that are custom made to that country’s particular customs, beliefs and various taboos (Aswathappa, 2010). This was the case when McDonald’s entered the Indian market and opted to use several beef substitutes in respect to Indian’s taboo on eating meat. Other instances of McDonald’s vast product differentiation that portray the company as a Brain Organization include McTempheh and McPork Burgers in Indonesia, McLox Salmon Sandwiches sold in Norway, Teriyaki burgers in Japan as well as McSpaghetti in the Philippines, these examples provide some concrete examples of McDonald’s ability to modify its product offering as dictated by varying international preferences and tastes. In McDonald’s entry into the British market, the company had to conduct an extensive review of its menu so a to be able to offer the British market a healthier menu (Great Britain. Parliament House of Commons. Health Committee. 2004). An example of this was the inclusion of chicken kebabs and vegetable salads into the menu, these were targeted to cater for the needs of the British population that was perceived as being more health conscious. In addition to this, McDonald’s also adjusted the prices of its meals as well as its advertising strategy which shifted the focus form an ordinary fast food to an image that portrayed that families could enjoy quality meals at the McDonald’s restaurant. Due to the increasing concern over obesity in some of the markets that McDonald’s operates in, the company is implementing several strategies to help the company effectively deal with the situation. Some of the strategies employed include McDonald’s entry into the kids wear market. McDonald’s introduced a new line of kids’ products that included various products such as casual clothes, toys, footwear and videos. These efforts were designed to try and redefine McDonald’s general image due to the increasing risk obesity among fast food consumers (Smith, 2006). The company also plans to try and totally phase out its soft drinks as well as its Super Size French fries so as to be able to create a somewhat healthier image of the company (just-food.com, 2004). Other menu changes being planned by the company include attempting to switch to offering Sausage burrito as well as cinnamon rolls as the main breakfast offering with bagels being categorized as an optional food item. McDonald’s is also to halt the sale of its 14 ounce popular McDonald’s Yogurt and Fruit Parfait which is to invariably be replaced by a much smaller-sized version of the product. These changes in the corporation’s menu are seen to be in-line with the overall strategy of attempting to provide a more balanced lifestyle. These simplified menu changes are planned to be rolled out in all of the company’s restaurants. By portraying an ability to be extremely flexible so as to suit the various market that McDonald’s operates in, McDonald’s has been seen to display a wide range of inherent qualities that are normally associated with organizations that are associated as assuming the organization as a Brain model. Bibliography AboutMcDonalds. 2013. Company Profile. Retrieved from http://www.aboutmcdonalds.com/mcd/investors/company_profile.html. Aswathappa, K. 2010. International business. New Delhi : Tata McGraw Hill Education. Buono, F., A., and Jamieson, D., 2010. Consultation for organizational change. Charlotte, NC : Information Age Pub. Duiker, J. W., and Spielvogel, J., J. 2013. World history. Australia : Wadsworth Cengage Learning. Epinions. 2007. The Original, but almost certainly not the best!. Retrieved from http://www.epinions.com/review/rest-Chain_Restaurants-All-McDonald__s/content_. Grazziani, M., 2009. McDonald's: the Big Mac of Mechanistic Organizations. Retrieved from http://www.csulb.edu/~mgrazzia/mcdonalds.htm. Great Britain. Parliament House of Commons. Health Committee. 2004. Obesity. London : Stationery Office. Just-food.com. 2004. USA: McDonald's to phase out Super Size fries. Retrieved from http://www.just-food.com/news/mcdonalds-to-phase-out-super-size-fries_id80759. Aspx. Mceachern, A., W., 2006. Economics : a contemporary introduction. [S.l.] : South-Western. Ritzer, G., 2012. Globalization : A Basic Text. Chicester : Wiley. Shenron, 2009. History of McDonald's. Retrieved from http://www.historyofthings.com/history -of-mcdonalds. Smith, F., A. 2006. Encyclopedia of junk food and fast food. Westport, Conn. [u.a.] : Greenwood Press. Read More