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Leadership And People Management: McDonalds Add in library

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Question:

Give a overview on McDonald's and Critical Evaluation Of Organisation?
 
 

Answer:

Overview Of Organisation

McDonald's Corporation was launched in the year 1964 on December 21; McDonald’s mainly operates and franchises the industry of global restaurant (Reuters.com, 2015). McDonald's is the leading worldwide food service retailer of the world with location in around 36,000 areas serving roughly 69 million customers in more than 100 nations every day. More than 80% of worldwide restaurants of McDonald’s are operated and owned by autonomous local business women and men. The key objective of McDonald's is to turn the company into the customers' most favourite place and approach to drink and eat by serving, Chicken McNuggets, World Famous Fries, Quarter Pounder and Big Mac (Aboutmcdonalds.com, 2015).

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In UK, the company employs around 97,000 people and has a distinct franchise model. The company has around 150 franchise partners and over 70pc of franchise restaurants in UK. The partners generally invest around £1 m to have minimum of 4 restaurants. The business model that is being followed in UK is not just about selling the products for making another business instead they recruit individuals through their recruitment process and ask them to sign a licence agreement for 20years and on average invest around £150,000 (Ruddick, 2014).

Critical Evaluation Of Organisation

Effectiveness of leadership

The quote stated by Peter Drucker “Management is the process of doing things right and leadership is the skill to do the right things”. Good leaders have a dazzling social intelligence, are more enthusiastic to change and also above all it permits them to do the right things always (Psychologytoday.com, 2015).

The rich history of McDonald’s started by the CEO, Ray Kroc. He is the talented executive who continues to build the organisation based on his legacy and make sure that the Golden Arches keeping shining for many years (Mcdonalds.com, 2015). The company McDonald’s is reputed organisation known for its consistency. During the tenure of James A Skinner, McDonald’s had become a wholesale organisation that mainly implemented winning principles. This helped the company to respond easily to the competition in the fast-food industry and also the increasing focus on the healthy eating. Additionally, it also made various key acquisitions that helped to increase the stock price of the organisation to become triple. After 33 years in McDonald’s Jim Skinner retired and James R Cantalupo was hired but he died due to sudden heart attack after that Charles Bell immediately took the position but even he had to resign the position due to cancer diagnosis. All the three executives of the organisation used the Play to win strategy during their tenure and revitalised the organisation (Cooper, 2012).

This shows that successful succession planning of the organisation had helped the organisation to keep pace with the competition in the fast food industry. This succession planning has made the culture of McDonald’s a continuous improvement culture. These plans of McDonald’s have really influenced various business leaders like Ram Charan, James Noel and Steve Drotter. In their book “The Leadership Pipeline: How to Build the Leadership Powered Company” they have mentioned that how an organisation should develop their leadership thoughts and how they should define and hone people’ skills towards progress (Cooper, 2012).

 

McDonald’s is 24/7 business, through which they match the demand of the customers and which in turn helps to boost the sales revenue of the organisation. The roles of the managers in McDonald’s have huge significance.  The emphasis is on the control of tasks, coordination and also division in the organisation. It is this function that the managers need to distribute the authorities to the job holders. This rigid structure helps McDonald’s to undermine the innovativeness among the employees and also an organisation culture towards delegation and empowerment is developed which prevails to sustain in the competitive environment. A collaborative approach is used by McDonald’s which encourages to connect the worldwide franchisees under a single umbrella of the brand name. The McDonald’s management also encourages the practice of working together and helping each other in the franchises to give the best to all their customers with consistent high quality and fresh food reflecting the culture of the organisation (Rubin, 2009).

According to the STL (Situational Leadership Theory), leaders should change their conduct according to the situational factors to meet the needs of the followers. This theory is a part of contingency theory that mainly emphasised on the willingness of the followers (Fairholm and Fairholm, 2009). It emphasises on two different behaviours one is the relationship behaviour and another is the task behaviour. The relationship behaviour is the ways of communication that the leader uses like multi-way, one-way or two-way along with supportive, listening and facilitating behaviour. This theory states that the leaders need to decide on the different tasks they want to manage, by identifying the willingness of individual and then selecting a particular leadership style to control (MWAI, 2011). In McDonald’s the task behaviour of the managers emphasises on the team work and collaborative approach to deliver the best to the customers. Encouraging team work helps the managers to reinvigorate and increase the efficiency of the team. They also help the struggling team to deliver the objective which motivates the team members to go ahead. This shows their relationship behaviour towards the employees.

The present CEO of McDonald’s is Steve Easterbrook. He was brought up in Watford, UK. His main aim is to make McDonald’s a rapid growing restaurant, with trendy fast-food and special offerings. He is a charismatic and passionate leader. He is a man-manager and outstanding leader. Charismatic leaders are generally well-known for their zest towards driving the organisation towards the success (Ojokuku, Odetayo and Sajuyigbe, 2012). He is very much passionate about the customers and crew members of the McDonald’s. He leads the organisation with front counter nature; he is very much aware of what is going on in the restaurants, the operations and also make ranks based on it. In fact it can be said that he follows the Peter Drucker’s quote stated above, by doing the right things (O'REILLY, 2015).

In the year 2006, in UK, Mr. Easterbrook was promoted to lead the business. While leading, he boosted the sales revenue of the restaurants with a clear look by revamping the McDonald’s menu and working in a friendly environment. Additionally he showed his defence nature towards the brand by challenging the campaigners who said that the food of McDonald’s is unhealthy. He debated with Eric Schlosser who is the writer of “Fast Food Nation” and an industry critic. Then Steve also added healthier-menu options (Kesmodel and Brat, 2015). This shows his situational leadership style. They are the leaders who change their behaviour or the leading capability according to the situation. This attempt influences the followers. In this style the leaders change their style mainly to address the issues that the organisation might face during those circumstances (McCleskey, 2014).

Mr. Easterbrook also mentioned AKTA, a Chicago-based digital consultancy that he wants McDonald’s to expand its business through customisation, possibly by “drive-in-service”, because the demand of the customers is changing and he wants to treat every customer as individuals not numbers. He is focusing on starting food customization with quality ingredients. Through this he is trying to attract more food-conscious and affluent customers (ETRetail.com, 2015). This attitude of Mr. Easterbrook shows that he is a transformational leader. By definition, transformational leaders show how success can be achieved through effective activities and dispositions. They always practice respect and trust. They look after the organisation by setting a strict vision and involve the supporters and the followers to meet the vision (Mahdinezhad et al., 2013).

 

Strategy Implementation

The leadership is effective in McDonald’s because they have used various strategies to make the company as one of best leaders in the market. It employs around 400,000 employees. The leadership philosophy of McDonald’s is “To get success in future, there is a need of leadership along with management roles all different levels of organisation. So it is expected from every employees that to reflect the organisation values and also demonstrate leadership, from whichever position they are in. The leadership development programs of McDonald’s emphasises on 4 areas (Businessweek.com, 2015):

  • Leading and managing the organisation in this rapid changing and complex world

  • Developing an innovative and continuous improvement organisational climate

  • Sustaining the future of McDonald’s

  • Joining with others and completing the work

To drive the vision, the team of McDonald’s have created metrics and standards that helped the organisation to be sustain in the hyper competition market. The talent management system of the organisation gives competitive advantage over the competitors in the fast food industry. The culture of McDonald’s follows the continuous improvement. McDonald’s have their own Universities and the employees are sent there to develop their career and profession through leadership development programs instead of sending the employee to offsite universities.

These programs consolidate instructions from the executive team of the organization with addresses by outside specialists. The objective is to give a characteristic connection between business strategy of the organisation and also leadership development, something that may be harder to attain to if officials went off campus for their instruction. The process of recruitment and selection at McDonald's cultivates a collaborative culture by selecting for best candidates who are willing to give advantage to the association in front of individual ambition (Jacobs, 2012). Additionally McDonald's has kept up its process of succession through bad and good. Actually, a persisting organisational culture can help individuals move beyond a dissatisfying quarter. The McDonald's management just strongly emphasized around the proficiency and performance of McDonald with around 33,000 restaurants overall and the huge, complex framework that backs them, a characteristic of management that has brought about absolutely a “Golden Age for the Golden Arches”. The organization lines up suppliers who can deal with enormous orders or requests, the crew members are prepared to get ready new things, and advertisers make sense of an approach to offer them (Kowitt, 2011).

The executive chefs of McDonald’s, suppliers, and franchisees got together at the headquarters to make sense of how to increase the sales of the crispy chicken strips. After suppliers, food scientists and chefs and individuals from the team of menu-management and also advertising organization decided on something regarding how to characterize the price and product, the snack wrap needed to pass summon with 150 to 200 customers in focus group. It then went into a 4- to 6-weeks operational test in a different restaurants of McDonald’s to figure out whether changes expected to be made in positioning of crew or equipment. This process helps McDonald's understand the capability of the snacking business sector — the developing section that needs to snack between meals — and the opportunity to expand traffic between mealtimes (Kowitt, 2011).

 

Organisational behaviour

The study that investigates the impact of individuals, structure and teams, have on the behavioural aspect of the organisation is termed as organisation behaviour (OB). OB is the application and study of different information about the people who are working within or are associated with organisation. This study applies the behavioural aspects of the individual extensively in different ranges of organisation like business associations, schools, services and government. This field mainly includes the process and development of the organisation, power and leadership skills used, job design, motivation level, communication, perception and conflict in the organisation (Buelens, 2006).

Work & Corporate Culture

According to the theory of two-factor by Herzberg, great working conditions just go in this way, and that employees oblige more elevated amount satisfaction, for example, recognition and motivation so as to be fulfilled by their position (Daft, 2008, p. 231). Indeed, even in a low- expertise position, there is a desire for low turnover. Furthermore, happy & satisfied employees lead to cheerful customers. The working culture of McDonald's appears to be exceedingly dependent upon the specific line managers in control at any given point in time. Since training is not simply offered to supervisors and executives, McDonald's has the capacity to spread and strengthen its values and cultures in downward as well as in all different directions. The pillars of the Corporate values of McDonald's is their "people”. This ideology is established by the Hamburger University. They quote that the CEO or the founder of McDonald's Ray Kroc's training focused philosophy (Phillips and Gully, 2009):

“If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent”

Motivating factors

According to Maslow’s Hierarchy of need theory, the employees mainly need five factors that help them to be motivated in the workplace that are: physiological, Safety, love and belonging, self-esteem and self-actualisation needs.

The working hours in McDonald’s are flexible. McDonald's offers various shift timings so that they can oblige everybody. This helps workers to balance both their personal and professional life. A few people oblige fulltime work, which is accessible through the standard day shift, on the other way part-time labourers can get their hours after school closes, on weekends or around other social commitments. With this stress-free and flexible environment in the McDonald's, specific and simple employment and flexibility through shifts timing (Goldman, 2009), they have met the physiological needs of the workers. Also, McDonald's store is located in every town which is helpful for workers as they can take their job in the nearby their home in McDonald’s (Goldman, 2009). This motivates the employees to work in McDonald's as this fulfils their physiological needs. However there is no such evidence about the safety needs. Typically there are no fringe benefits related to the employment or agreement or assurance towards job security.

A horizontal communication is practiced in McDonald’s among the managers and the subordinates. This permits workers to communicate uninhibitedly with their managers. Additionally supervisors acknowledge feedback from the worker (Goldman, 2009). This implies that subordinates don't fear their supervisors (Goldman,2009), so they can develop extraordinary trust and relationship. This is incredible as these offer employees to have belonging and affection. More over the shift timing flexibility permits them to arrange additional time with family and also helps them to build family bonds.

In McDonald's, they work in teams. In the teams, every worker depends on each other (Shetty, 2011). Every team members have a particular job to concentrate on (Shetty, 2011). So if one of the individuals leave their post or delay by taking an excessive amount of time to serve or prepare, the others get influenced and the entire teams neglect to be profitable (Shetty, 2011).Team work makes workers more in charge of their work and when they are more dedicated to their work they serve to attain the objectives of the organisation. At the point when organizational objectives are attained to, they will have a sense of accomplishments which support their self-esteem. The organization has techniques to motivate the abilities and give them a feeling of empowerment (Goldman, 2009). Giving workers a feeling of empowerment helps to boost the esteem needs as they can make their own choices, they are not under the control of anyone and do things they would prefer not to do.

 

According to Hunt (2013), Workers get the opportunity to attain to self-actualisation needs; the top section of the Maslow's theory of motivation, by being exposed to critical thinking in regards to business related issues and accordingly makes them think innovatively to discover proper solutions. Self-development is offered to workers while working in McDonald's through trainings (Hunt, 2013). McDonald's have their own University, Hamburger University, which give training to workers to work in McDonald. Through these training sessions, employees get the opportunity to increase their self-confidence, they get the opportunity to upgrade their aptitudes and realize a better way what to do in the working environment and attain self-actualisation. McDonald's employees are generally students. The students advantage from encountering better experiences from this big brand as well as attain to self-actualisation as they accomplish a feeling of accomplishments.

Conclusion

In conclusion, it can be said that McDonald’s is a multinational organisation. It is found from the above discussion that some people feel that McDonald’s is an inexpensive, fast and decent restaurant and other’s feel or have blamed that it is low quality restaurant. The corporate image of McDonald’s reflects the corporate values, high quality product and cleanliness based organisation. The company uses various strategies like succession planning, running own development centres and universities that help the workers to do their tasks effectively and make the organisation a better production organisation. McDonald’s follows a highly effective leadership quality that helps people to be effective in future. The work culture of the organisation is found to be aligned with values of the organisation. The CEO Mr. Steve Easterbrook has shown a charismatic trait, situational leadership attitude and also transformational leadership style, which is helping the organisation to lead the market.

Recommendation

Here are few recommendations that can help the organisation to improve their leadership effectiveness:

Short-term

1. McDonald’s leaders should give careful consideration to building their association's assets, abilities and competencies so as to increase sustained and suitable, competitive changes.

2. Both the visionary and managerial leadership aspects are crucial for association wide learning activities to succeed. This combination is necessary, since the association dependably needs to learn new things and in the meantime, to organize new learning avenues

Long-term

1. Strategic leaders observe human capital as a significant factor in the process of innovation and the development of key skills, and they use extensive exertion managing the wellbeing of this asset (human capital). Whereas the managerial leaders concentrate on the present assets exploitation and abilities, vital pioneers consolidate this center with a quest for new assets, capacities, and core skills, which will, when required, be misused to make wealth. This dual concentrate process on exploration and exploitation, referred as ambidexterity, is an essential factor for long term achievement of McDonald's.

2. Current responsibility activities and compliance systems should be observed and reviewed in terms of the degree to which they debilitate healthy leadership and risk-taking, furthermore, also discover methods for changing the responsibilities wherever necessary.

 

References

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Buelens, M. (2006). Organisational behaviour. London: McGraw-Hill.

Businessweek.com, (2015). Twenty Best Companies for Leadership: McDonald's - BusinessWeek. [online] Available at: https://www.bloomberg.com/ss/10/02/0216_best_places_for_leadership/10.htm [Accessed 8 May 2015].

Cooper, M. (2012). Understanding the McDonald’s Leadership “Special Sauceâ€Â | ChiefExecutive.net | Chief Executive magazine. [online] ChiefExecutive.net | Chief Executive magazine. Available at: https://chiefexecutive.net/understanding-the-mcdonalds-leadership-special-sauce [Accessed 8 May 2015].

Daft, R. (2008). The leadership experience. 2nd ed. Mason, Ohio: Thomson/South-Western.

ETRetail.com, (2015). Can McDonald's be both cheap and high-quality? New CEO Steve Easterbrook thinks so | ET Retail. [online] Available at: https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/can-mcdonalds-be-both-cheap-and-high-quality-new-ceo-steve-easterbrook-thinks-so/46503211 [Accessed 8 May 2015].

Fairholm, M. and Fairholm, G. (2009). Understanding leadership perspectives. New York: Springer.

Goldman, E. (2009). Observation of Leadership & Organizational Behavior at McDonald’s. [online] Ericgoldman.name. Available at: https://www.ericgoldman.name/non-technical/28-leadership/34-observation-of-leadership-a-organizational-behavior-at-mcdonalds [Accessed 8 May 2015].

Hunt, O. (2013). Performance and Motiation in mcdonald. [online] streetdirectory.com. Available at: https://www.streetdirectory.com/travelguide/184092/human_resources/performances_and_motivation_in_mcdonalds.html [Accessed 8 May 2015].

Jacobs, D. (2012). McDonald's Recipe For Success Brought New CEO To The Table. [online] Forbes. Available at: https://www.forbes.com/sites/deborahljacobs/2012/03/22/mcdonalds-recipe-for-success-brought-new-ceo-to-the-table/ [Accessed 8 May 2015].

Kesmodel, D. and Brat, I. (2015). On McDonald’s Menu: CEO With a Fresh Perspective. [online] WSJ. Available at: https://www.wsj.com/articles/on-mcdonalds-menu-ceo-with-a-fresh-perspective-1422578857 [Accessed 8 May 2015].

Kowitt, B. (2011). Why McDonald’s wins in any economy. [online] Fortune. Available at: https://fortune.com/2011/08/23/why-mcdonalds-wins-in-any-economy/ [Accessed 8 May 2015].

Mahdinezhad, M., Bin Suandi, T., Bin Silong, A. and Binti Omar, Z. (2013). Transformational, Transactional Leadership Styles and Job Performance of Academic Leaders. IES, 6(11).

McCleskey, J. (2014). Situational, Transformational, and Transactional Leadership and Leadership Development. Journal of Business Studies Quarterly, 5(2), pp.117-130.

Mcdonalds.com, (2015). Leadership :: McDonalds.com. [online] Available at: https://www.mcdonalds.com/us/en/our_story/leadership.html [Accessed 8 May 2015].

MWAI, E. (2011). CREATING EFFECTIVE LEADERS THROUGH SITUATIONAL LEADERSHIP APPROACH. [online] theseus.fi. Available at: https://www.theseus.fi/bitstream/handle/10024/33027/Mwai_Esther.pdf?sequence=2 [Accessed 8 May 2015].

Netra, S. (2011). Leadership Style at McDonald's. [online] Managementparadise.com. Available at: https://www.managementparadise.com/forums/foundation-human-skills-f-h-s/221122-leadership-style-mcdonald-s.html [Accessed 8 May 2015].

Ojokuku, R., Odetayo, T. and Sajuyigbe,, A. (2012). Impact of Leadership Style on Organizational Performance: A Case Study of Nigerian Banks. American Journal of Business and Management, 1(4).

O'REILLY, L. (2015). McDonald's New CEO Is British - Here's Everything We Know About Him. [online] Business Insider. Available at: https://www.businessinsider.in/McDonalds-New-CEO-Is-British-Heres-Everything-We-Know-About-Him/articleshow/46053674.cms [Accessed 8 May 2015].

Phillips, J. and Gully, S. (2009). Strategic staffing. Upper Saddle River, NJ: Pearson/Prentice Hall.

Psychologytoday.com, (2015). Leadership | Psychology Today. [online] Available at: https://www.psychologytoday.com/basics/leadership [Accessed 8 May 2015].

Reuters.com, (2015). McDonald's Corp (MCD)  Company Profile | Reuters.com. [online] Available at: https://www.reuters.com/finance/stocks/companyProfile?symbol=MCD [Accessed 7 May 2015].

Rubin, H. (2009). Collaborative leadership. Thousand Oaks, Calif.: Corwin.

Ruddick, G. (2014). How McDonald's was turned around in the UK. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11234229/How-McDonalds-was-turned-around-in-the-UK.html [Accessed 7 May 2015].

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