McDonalds Corporation - Coursework Example

McDonald’s Corporation Introduction McDonald’s is the world’s largest food-chain restaurant. It prepares meals for more than 45 million consumers around the world on a daily basis. McDonald’s has branches in more than 110 nations around the world. To ensure that it supersedes the expectations of its numerous customers, the multinational corporation has come up with business principles that assist it to realise its objectives. At the centre of McDonald’s success is the dedication to ensuring that it always provides excellent and speedy services to its customers, as well as value for their money. Business Theories used by McDonald’s McDonald’s considerable business operations require the use of supportive business theories. The company could be said to use different types of management theories in the running of operations. The theory of scientific management which was developed by Fredrick Taylor, for instance, is used by McDonald’s to determine aspects such as the generation of scientific and workman education, the different functions that go into the performance of different responsibilities, and the establishment of a practical reward system. The scientific management theory is based on the notion that workers have to be motivated in various ways, apart from base payment, to achieve corporate objectives. Factors such as rewards or bonuses could realise this goal. To this end, McDonald’s has instituted the practice of nominating an ‘Employee of the Month’ every four weeks in order to motivate other workers to seek to achieve long term and short term objectives (Amor 2014). Another management theory that is obviously used by McDonald’s is the bureaucratic theory which was put forward by Max Weber. This management theory contends that the most effective or ideal work organisation is that which has labour divisions which ensure that all activities and operations are well spelled out. Weber felt that even organisational aspects such as performance evaluation ought to be based on merit, or technical competence. According to the bureaucratic management theory, the main factor that denotes its use in an organisation is the hierarchical chain of command in which senior executives make most of the decisions. At McDonald’s, the senior management uses normative as well as bureaucratic control to create an effective system. In this system, managers in various branches are entrusted with the responsibility of ensuring that all processes are achieved in a timely manner, and that workers fulfil their different responsibilities. Due to the fact that McDonald’s is a multinational corporation, the top to bottom system of control is the most efficient for maintaining operations (Sowell-Harris 2009). McDonald’s has assorted workers from different ethnic backgrounds working for them in outlets all over the world. Each of these workers possibly has a different understanding of what it takes to succeed in business; some of which may not be in alignment with those of the McDonald’s Corporation. To ensure that all their workers follow the rule of putting the customer first and providing value for money, the corporation uses the bureaucratic management system in most of its outlets outside the United States. In the general management system, the stock owners, CEO, and board of directors of the company occupy the highest management level (Amor 2014). They are followed by the managers in charge of departments such as accounting, human resources, and auditing. Directly below these are the operational managers who are in charge of handling day-to-day responsibilities and tasks, along with the crews that dispense maintenance services. At the last tier are the frontline workers who are responsible for the preparation and presentation of the food items on offer. In the global McDonald’s corporation, this system is helpful because it allows for managers to be able to pass different corporate values down to employees at different levels and geographic locations. This management system ensures that the corporation avoids the prospect of the misuse of resources based on ineffectiveness and inefficiency. McDonald’s approach to process design and product development in their restaurants and their supply chains McDonald’s makes use of operational processes that are effective in saving costs while also providing the best quality of products for customers. One area in which this is evident is in inventory purchasing. McDonald’s employs a periodic structure of inventory management. In this procedure, all the necessary raw materials are only procured on a bi-weekly basis after factors such as historical sales and usage data have been taken into consideration. This system is important because it saves on time by doing away with the need to create an order. It also reduces the possibility of errors being made as it is conducted through an automated process that views previous sales information for the sake of coming up with accurate numbers. In sourcing for contractors to provide it with raw materials, McDonald’s follows the bureaucratic management theory which denotes that only the managers should be able to make major decisions. At McDonald’s it is the executives at the headquarters that are entrusted with the responsibility of creating the inventory based on price, quality, and reliability (Molch 2009). Individual outlets in various parts of the world do not have access to the corporation’s vendors, and thus have to depend on the decision made by the head branch in terms of the contractors that will be used. Due to its sheer size, McDonald’s is able to get fairer prices on resources than other companies get. For instance, it can negotiate on fairer prices from raw materials with suppliers as it buys things in such bulk (Yuece 2012). McDonald’s also does not use only one contractor when procuring goods. This allows it to be able to shop in different places after considerable reflection, in order to ensure that its customers get the best quality of food. McDonald’s also makes use of brand franchising in order to reach customers all over the world. Brand franchising also makes it possible for a company to share risks as well as operational and capital costs with other franchise partners, and so is a wise decision for a company to make. To ensure that its customers receive quality products, McDonald’s also uses standardised design layouts, menus, administration systems, and branding (Crouch 2004). All McDonald’s employees in branches outside the United States are given mandatory training to ensure that they follow the standards set by the head branches in the United States. Standardisation basically means that all outlets carry out processes and activities according to the schedule in the head office in the United States. This allows the corporation to effectively meet customer satisfaction in various parts of the world. To ensure that the set procedures are followed in its numerous outlets, McDonald’s executives also conduct impromptu checks in branches within and outside the United States. In addition, there is a stipulation that all franchisees agree to which states that they will maintain the standards set by the head office. If they do not observe this, their license can be reversed. To keep up with the need for meeting customer satisfaction, McDonald’s frequently updates its menus as well as service processes (Crouch 2004). Essentially, the operational success of McDonald’s in the international arena can be attributed to its contractors and franchisees operating in a unified way that creates the greatest satisfaction for consumers. How McDonald’s Product Development and Process Design contributes to Customer Value McDonald’s achieves customer satisfaction through interactions that improve the experience of consumers. This is not easily attained and involves the use of automated processes, sales-related functions, synchronised operations, and customer technical and service support. McDonald’s creation of customer value seeks to realise objectives such as the retention of customers, attraction of new consumers, and the reduction of marketing costs. It is also the company’s aim to create customer value by integrating functions such as marketing efforts, sales programs, and customer support (Cheema 2011). To realise these objectives, McDonald’s has invested in gathering data about its numerous customers in various parts of the world, and their preferences in terms of food stuffs and sales programs. Once collected, this information is then used to determine the best way to conduct operations such as customer service transactions or effect new models of customer support. This then results in more profits being made, increasingly satisfied customers, and more resources for workers in the support department (Brown 2009). Systems that determine customer relationship management are actually used to assist in determining the corporation’s future course. The different kinds of data that are collected include customer addresses, names, account information, fulfilment and shipping dates, and demographic statistics. Such data can be used to offer real answers to customers when solving issues without needing to be transferred to different departments, or wait for extended periods. McDonald’s, for instance, has come up with a system where employees can easily determine the location of the orders or packages that are meant for customers (Upton and Margolis 1996). Employees can also be able to view all past complaints made by customers in order to determine which service aspects have to be adjusted in order to achieve customer satisfaction. This means that there will be less time allocated to solving customer concerns, leading to higher productivity. Conclusion McDonald’s is a brand name that is recognised the world over. In Western nations, the multinational corporation is seen as a fast food restaurant; however, in many of the rest of the world’s nations, it is a representation of America’s capitalism and rich resources. To retain its standing as one of the world’s most successful fast food restaurants, McDonald’s has implemented different business operations and processes that will increase customer satisfaction while also resulting in reduced operating costs. It has accomplished this by collecting information on customer preferences,, as well as conducting surveys on customer satisfaction. McDonald’s also uses knowledge management operations such as ‘E-procurement’ to provide even more services and products for its numerous customers through an online forum. References Amor, A. (2014) McDonald’s competitive strategy, Grin Verlag, Berlin. Brown, T. (2009) Change by design: how design thinking transforms organisations and inspires innovation, Harper Collins, New York. Cheema, P. (2011) The big idea; McDonald’s unravels its supply chain, viewed Sept. 24, 2011 from . Crouch, A. (2004) Fast-food business strategy, The Raw Prawn Blog. Molch, D. (2009) McDonalds Russia: managing a crisis, Grin Verlag, Norderstedt. Sowell-Harris, P. (2009) None of us is as good as all of us: how McDonalds prospers by embracing inclusion and diversity, Wiley, Hoboken. Upton, D., & Margolis, J. (1996) ‘McDonald’s Corporation case study’, Harvard Business Review, Case 693-028. Yuece, I. (2012) SWOT analysis of McDonald’s and derivation of appropriate strategies, Grin Verlag, Berlin. Read More