Orgnaisational structure and Design Analysis of McDonald's - Research Paper Example

ORGANIZATIONAL STRUCTURE Table of Contents Company Overview 3 Analysis 4 Mission, Vision and Objectives 4 The Business Strategy 5 External Environment 6 Culture 8 Values 8 Corporate Social Responsibilities 9 Assumptions & Conclusions 11 References 12 Bibliography 14 Company Overview One of the leading restaurant chains of the world, McDonald's journey began in 1940 as the two brothers named Dick and Mac McDonald inaugurated the first set of restaurant at San Bernardino of California in the United States. The present form of organization i.e. the corporation was started in 1955 as Ray Kroc open the first franchised restaurant at Chicago of Illinois again in the United States. The restaurant opened by Ray Kroc was 9th in total and soon he bought the rights from the founder brothers. Today, McDonald's is present in 118 countries worldwide and there are more than 31,000 restaurants. Most of the restaurants are operated locally (nearly 75%) and the chain of restaurants, one of the most successful brands of today, serves not less than 58 million customers per day (Our Company, n.d.). Some of the most popular dishes of the McDonald's are Quarter Pounder, Chicken McNuggets, Egg McMuffin, Big Mac and the World Famous Fries. Analysis Mission, Vision and Objectives To achieve goals every organization has certain plans and strategies. The first step to the fact is having well defined mission statement. Mission statement is a sort clarification by the company to the outside world about their prime objective. The mission statement of McDonald's states "be our customer's favorite place and way to eat" (TIUA, n.d.). The vision of the leading restaurant chain reads, "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile" (McDonalds Mission Statement, n.d.). To achieve the vision and the mission of any organization, it needs well set objectives and goals for the short and the intermediate term as vision and mission generally represent the long term status of the company. McDonald's, in 1979 came up with a popular scheme of 'happy meal' in which a toy was offered with the meal. Also to successfully implement the strategy taken, the company related their toys with many movies and their famous characters. The Business Strategy The business strategy of McDonald's is that of a franchisee system. The company generally employs local work force as the franchisee holders. It has a dual advantage. At the first place, the company can leverage out the contacts and networks of the local franchisee. On the other side, the local franchisee can use the global brand name of McDonald's and can get more footfalls in side the restaurant. Today, the biggest challenge faced by most of the multi-national companies is that of survival amidst continuous change and technological innovation. As the world is becoming increasingly smaller, people are becoming more conscious about the value for money. McDonald's in order to face and win such a tumultuous condition has been laying great emphasis on the following Speed - World has become very fast today. People have so many commitments to fulfill with the twenty fours of day. They would not like to wait for food for long at the restaurant. McDonald's has got this indication long before. It conducted certain surveys which revealed that the customers want the services at prompt. The company has been laying importance on speed since then. Cost - As customers are increasingly becoming aware about their hard-earned money, the only way out to have swift survival is through supplying quality food at low or reduced cost. One of the successful strategies in this regard initiated by the McDonald's is that of value meal. Under this scheme, customers enjoy discounts when they purchase number of items at once. Also some franchisee owners issue special discount on a special item on a special day of the week. Nutrition - McDonald's has successfully assessed that nutrition is going to be the mantra of the future generation and accordingly it has taken several measures to make its customers health-conscious through its diversified menus. In the United States, hey came up with 'Go Active' meals. In United Kingdom, they offered fresh fruit bags (containing apples and grapes) replacing the French Fries. There have also been certain strategic changes in the way of business by the McDonald's Corporation. In 1999, McDonald's came up with 'Made for You' spending $181 millions. Also, it has tried to build brand loyalty among its shareholders through revitalization plans. McDonald's also displayed the courage to flirt with its menu lists and had quite a few experimentations. Approving the demand of the generation, McDonald's also launched healthy and nutritious food items with a long term growth perspective in view and not just mouth watering dishes. External Environment The environment of any company can be assessed on the basis of three major constituents namely the internal environment of the company, the task environment and the general environment. The task environment and the general environment are the part of external environment. Incase of McDonald's, the general environment comprises of: International Dimension - The restaurant chain operates in 119 countries and the two-third of the revenue is generated from outside of the United States. Technological Dimension - To compete with the changing environment, McDonald's are having continuous up-gradation of their technology and information system. Economic Dimension - It refers to the socio-economic development and stable exchange rates with low inflation. Socio cultural Dimension - The company has presence in 118 countries and there is a huge demographic shift in its customer base. Political and legal dimension - McDonalds, in order to trade with various nations, should comply with the food standards of various governments. Also, the foods are to be prepared on the basis of the climate and the sentiment of the people. The task environment of the McDonalds comprises of the following: Customers - The customers of the McDonald's includes both the individual customers as well as the institutional customers like the corporate houses through out the world. Competitors - Some of the leading competitors of McDonald's are Subway, KFC, Dairy Queen and Burger King. Regulators - The regulators of the food part is Food and Drug Adminstration. Strategic Partners - The strategic partners of McDonald's includes Wal-Mart and Disney. Suppliers - Coca-Cola and other wholesale manufacturers are the prominent suppliers of McDonald's (Website of Academic Staffs, n.d.). Culture As it has been discussed earlier that McDonald's represent franchisee way of doing business. It essentially means that with the local persons getting into the McDonald's family, the culture of the organization is getting diversified. Like other multi-nationals, McDonald's has also incorporated the elements like recognition, assimilation, respect and understanding in its culture. The restaurant chain has also maintained the American cultural elements of freedom, democracy and equality. So, it can be said that McDonald's is ideally a global citizen today with American culture at the core supporting the continuous adaptability (Obringer, L, E,. n.d.). Values McDonald's has a very clear set of corporate values which in turn helps them to achieve their mission and those are communicated to all the employees. The major seven core values are as follows: Customer experience at the core - McDonald's take due care of their customers with high quality food, superior service and welcoming environment. Committed to human capital - The company provides opportunities to its entire workforce and also recognizes talents and develop leaders. McDonald's System - The company believes in balance of interest among the three legged system i.e. the franchisees, the employees and the suppliers. Ethical Business - McDonald's maintain ethics at their business operations and adheres to the highest possible integrity, fairness and honesty. Giving back to the communities - McDonald's have come up with many charitable measures and also leverage their size and name to make the world a better place to live in. Profitable growth - McDonald's believe in all round growth of all the stakeholders along with the valued investors. Continuous improvement - The company tries to remain flexible and adaptable to the changing circumstances and continue the learning process. Corporate Social Responsibilities McDonald's initiate corporate social responsibilities by striving for the right and just, implementing reliable business practices and by integrating social and environmental priorities with in its restaurants and valued relationships with its stakeholders. Apart from many charitable initiatives, McDonald's have clear cut policies with respect to environmental challenges, water usage, energy usage, bio-diesel and waste management. The company even supports the cause of earth hour. Also the leading restaurant chain often initiates clean street programs and such measures. Assumptions & Conclusions McDonald's Corporation is undoubtedly the leading restaurant chain of the present world. It has become a household name today. Also, the business model of McDonald's has been followed by many lesser known business organization. It can be assessed that behind the success of McDonald's, many factors played crucial role. The management of the company took due care to maintain and achieve its stated mission and vision. Also the business strategy it followed was part of continuous revision on the wake of changing scenarios. The external environment has been dealt with extreme expertise by the company. The culture and the core-values of the company also continuously contributed to the success of the company. The corporate social responsibilities increased the popularity of the company as they took leading measures to reduce the social cost. Apart from all these factors, one feature that deserves special mention is that of efficient human resource management. Such achievements over the years might not have been possible if it could not have tapped and retained based of the industrial talents. Also, the human capital was motivated and complied with the organizational objectives to make McDonald's the leading restaurant chain across the globe. References Obringer, L. E., No Date. What is Franchising. [Online] University of Delaware. Available at: www.buec.udel.edu/pollacks/Acct351/handouts/Franchise%20costs%20McDonalds%20&%20Dunkin%20Don [Accessed on 27 May 2009]. Our Company, No Date. Getting to Know Us. [Online] McDonald's. Available at: http://www.aboutmcdonalds.com/mcd/our_company.html [Accessed on 27 May 2009]. McDonalds Mission Statement, No Date. McDonald's Mission Statement. [Online] Available at: http://www.samples-help.org.uk/mission-statements/mcdonalds-mission-statement.htm [Accessed on 27 May 2009]. TIUA, No Date. Plans and Strategies. [Online] Tokyo International University of America. Available at: http://www.tiua.edu/academics/class_sites/businessmgmt08/Group3/index_files/Page390.htm [Accessed on 27 May 2009]. Website of Academic Staffs, No Date. The Organization and its Environments. [Online] Universitas Gadjah Mada. Available at: bws.staff.ugm.ac.id/wp-content/chapter03.ppt [Accessed on 27 May 2009]. Bibliography Darden Business Publishing, No Date. Darlene Calhoun and McDonald's. [Online] University of Virginia. Available at: https://store.darden.virginia.edu/business-case-study/started-as-crew-b-darlene-calhoun-and-mcdonalds-36 [Accessed on 27 May 2009]. Earley, S., Kellond, M., Kraich, H., Phillips, E., Sadeq, R. & Van, T., No Date. McDonald's Restaurant. [Online] The University of Denver Portfolio Community. Available at: https://portfolio.du.edu/portfolio/getportfoliofileuid=38214 [Accessed on 27 May 2009]. Haas School of Business, No Date. McDonald's CSR Fellow Program. [Online] Berkeley: University of California. Available at: http://www.haas.berkeley.edu/responsiblebusiness/McDonaldsCSRFellowsProgram.html [Accessed on 27 May 2009]. McDonald's, 2009. McDonald's 2009 Global Best of Green. [Online] McDonald's Corporate Responsibility. Available at: http://www.crmcdonalds.com/publish/csr/home/about/environmental_responsibility/best_of_green.html [Accessed on 27 May 2009]. McDonald's, 2007. Our Environment is your Environment. Australia: McDonald's. McDonald's, 2008. Annual Report. USA: McDonald's. Temple University, No Date. Introduction. [pdf] Temple University. Available at: http://www.temple.edu/tempress/chapters_1400/1599_ch1.pdf Read More