The Making of McDonald's - Case Study Example

?Research Report The purpose of this report is to conduct a research for an organization, which has been chosen here as McDonalds. The reason this organization has been chosen is that the McDonalds offers a variety of products related to fast food to its customers. The report will present the company profile as well as the performance objectives pursued by McDonalds in the recent times. The report will also be presenting the research made in the past related to the meeting of the performance objectives that the companies have decided for excelling in their business. The report will incorporate different economic indicators to check the performance and various other factors that can improve and boost the business of McDonalds. Performance objectives of McDonalds: McDonald’s is considered as one of the largest food chains in the world and to improve as well as boosting up their business, the company officials have to devise new policies and objectives that can enhance their performance on every aspect so that to maintain their widespread status of the largest and most reputable food chain in the world. McDonald’s is also considered the largest user of beef in Europe, which actually number 8-9000 cattle per week, which are needed to satisfy the production needs of the McDonald’s in only UK. The company follows a philosophy of developing a collaborative approach with their clients, and they are committed to share the best experience with their suppliers as well as with their customers. The important part of the philosophy of McDonald’s is to keep improving in their business for which they devise new objectives which are basically modified version of the previous years’ objectives. The company is not only aimed to improve its relations with the clients and customers, but also with the suppliers on the primary as well as on secondary level. To check whether the staff is working properly, and whether the company has met its revenue gains according to the predictions made, the company prepares some performance objectives, which actually mean the execution of some policies through which those objectives can be achieved via an enhanced performance in every department. The five main performance objectives of McDonald’s are as follows: Speed: this objective is required to be achieved by the management of McDonald’s because the efficiency and speediness of the staff will be the only key to improve the gains which is the ultimate goal of the management officials. Cost: another main objective of the management is to pursue such policies and regulations through which their production cost is reasonably lower. Quality: with the costs lowered, the management also seeks to improve the quality of its products as well as every other aspects such as the customer satisfaction, and customer-staff relations that are in the priority list of the company and they always seek to make a positive environment. Dependability: The Company knows it very well that without the efficient staff as well as a team of suppliers; the business of McDonald’s is not going to operate well. Therefore, the management has made it an objective to create an environment of dependability where all the individuals are working together as a team and where the concept of individuality is not existing, and that’s the only way through which the overall performance will be increased and improved. Flexibility: the staff of the organization needs to be flexible and able to do all the works, and therefore the management has made it an objective to create such an environment in which all the workers are working together and their flexibility of each of the individual workers will be jumbled up in order to make a better team to run the business. The main conclusion that can be made from reviewing the 5 performance objectives of the McDonald’s is that the management has really made it an essential objective to create such a harmonic environment in which all the workers are working as a team and a coherence and team unity is established which is the main key to a better performance as well as growing business. The same approach has been also taken by Capon (2007) who has argued that the achievement of the business objectives can only be possible when the performance of the company is enhanced and that can only be achieved in an environment in which all the workers are working as a team to boost up the business in many respects. Design capacity, effective capacity, and actual outputs: This section will be calculating the design capacity, the effective capacity, as well as the actual outputs for the McDonald’s. Design capacity is termed as the maximum theoretical output of a system, whereas the effective capacity is termed as the capacity that McDonald’s will expect to achieve given the current operation constraints. Whereas the actual output is gained through a formula in which design capacity and effective capacity are dependent variables. Therefore, the design capacity will be the amount of gains or output that the management of the McDonald’s has calculated, and these are the maximum possible output results. Design capacity is not actually obtainable in the normal case, so the McDonald’s might be able to achieve the effective capacity, i.e. the maximum output that could be gained in the current case scenario which is dependent on the availability of resources that the company has for maximizing the productivity. The actual output in the end will be the one that the company has gained after a period of time. The actual output will then be an important factor for calculating the design capacity and effective capacity for the next period of time. One of the main constraints in the productivity of McDonald’s has been the costs as well as the prices that have been set for the products. The management of the company is much more concerned about this now than it was before and the reason is the lesser demand of the products in the last two years, which has been the major effect of higher prices. Another factor is cost. The company incurs higher production costs due to which the prices have also to be increased. Capability Index for McDonald’s: Six-Sigma methodology is a technique which is actually aimed at the elimination of the defects found in any product or any process. The Process Capability Index (Cpk) refers to a mathematical measurement which is basically used in Six-Sigma method. The Cpk provides a manifestation of the extent of fineness with the process is going on, by remaining within the organizational body limits containing upper and lower control. Higher Cpk will show the process to be more-in-control. The calculation of the process capability index for McDonald’s will show the number to be 0.4 which means that the company has the ability to eliminate the defective factors that are leading McDonald’s in terms of achieving its objectives. The potential causes and threats that McDonald’s might face through the variations in the capability index must be the following: Governments considering their own regulations for targeting fast food. McDonald's experiences a competition with the stronger peers. Commodity price increases could increase costs while a weak economy limits the ability to pass the price hikes through to consumers. McDonald’s Corporation was this week’s strongest performer. The share price of the company has also experienced robust sales in the past two years. The report about the performance of the company showed that sales increased to 8.5% in the 2010 which was the greatest boost for the company worldwide. This announcement had also made the Dow Shed to gain 280 points in and McDonald jumped to 1.2% point gains. The company is also trading near a 52-week high in a tough market. Focus List has also enlisted the company since 2006 and now McDonald’s is considered the top performer in terms of their portfolio and performance. The company is currently offering a return on equity of about 26% which is actually double than the industrial average gains. The Company has also been considered a staunch supporter of the practices related to the animal welfare, which also include the well-being of the egg laying and their controlling. An example of this practice is the company’s welfare program for hens laying eggs in 2000. This practice has been continuing to meet the standards of the industry. The latest research on the subject shows that the company is also supporting the use of cage and cage-free housing by the suppliers. The company is also consistently engaging with the suppliers as well as the scientists for finding and exploring new ways through which the objectives of the performance of the company can be fulfilled with great affectivity. References: Kroc, Ray, and Robert Anderson. Grinding It Out: the Making of McDonald's. Chicago: H. Regnery, 1977. Print. Smith, Andrew F. Eating History: 30 Turning Points in the Making of American Cuisine. New York: Columbia UP, 2009. Print. Performance Measurement System. Salem, Or.: Legislative Fiscal Office, 2004. Print. Read More