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Strategic Management And Leadership At McDonald

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Questions:

1. Relationship between Strategic Management and Leadership at McDonald?

2. Application of Management and Leadership Theory to support McDonald’s decisions?

3. Assessment of the current leadership requirements of Mc Donald?

 

Answers:

Introduction

Leaders in an organisation are known for applying strategies aimed at leading the entire organisation to higher level of success. Strategic management and leadership are closely integrated terms as they imply the attainment of organisational goals through the leaders applying their leadership abilities in strategically managing organisational resources. The leaders are required to apply different important leadership styles aimed at achieving the strategic organisational goals in a positive manner. However, a combination of both the management and leadership approaches need to be considered by the leaders so that they can ensure the positive accomplishment of organisational goals. It is not only the consideration of appropriate leadership styles, but their appropriate application is also quite crucial from the point of view of accomplishing organisational goals in a highly efficient manner (Northouse, 2012).

This report is aimed at analysing different important aspects related to leadership and management at McDonald so that the strategic organisational goals are positively accomplished. In accomplishing the analysis, the focus will initially be towards understanding the relationship that exist between strategic management and leadership at McDonald and this is followed by an application of management and leadership theories in supporting organisational decisions. The analysis will also include an assessment of the leadership requirements at McDonald, and finally, there will be a critical analysis in relation to planning and developing leadership skills within organisation.

1.Relationship between Strategic Management and Leadership at McDonald

a. Link between strategic management and leadership and impact of leadership styles on McDonald

Martin (2006) stated that strategic management is the process of identifying the major organisational objectives, policies and plans that will help the organisation in attainment of the long-term profit levels. Strategic leadership is necessary for the attainment of the strategic objectives because the strategic leadership tactics involves the use of proper vision and motivational skills to ensure timely attainment of the strategic objectives. DuBrin (2008)  stated that strategic leadership is the process of taking responsibility for the future and the present strategic objectives of the organisation. Thus, the primary goal of a strategic leader is to evaluate the business conditions, analyse the external and internal business environments and lead the employees as per the changing global trends.

 

As per Forbes, the market share of Mc Donald in USA, has decreased to 22.1% due to the high saturation of the market and the presence of the large number of competitors like KFC, Burger King etc. Thus in order to increase the market share Mc Donald has adopted the following strategies:

  • Internalisation and focus on sale of products in emerging markets (Cameron, 2012)
     
  • Offering a wider variety of food for attracting of more customer segments
     
  • Innovating the interiors of the stores and making the stores more visually attractive
     
  • Introduction of the niche products like Chicken McBites in the global market

Sperry (2013) stated that the leadership style determines the way in which the strategies of the organisation are to be achieved. For the strategic development of Mc Donald, the retail food chain needs to adopt different leadership styles suiting the different strategic situations within the company. The major focus of the leaders within Mc Donald should be on the adoption of the situational, persuasive and participative leadership style. In the present context, Mc Donald operates based on democratic leadership style. The open culture within Mc Donald has helped the food chain to maintain work flexibility and reduce the communication gap between the employers and the employees. However, Schein (2010) argued that in order to fulfil the strategic objectives concerning the global expansion and the innovation with the product line, Mc Donald will required in corporation of innovative leadership, adaptability skills and persuasive leadership style.

b. Evaluation of adoption of leadership styles in different situations

Cameron (2012) stated that apart from the democratic leadership style, the leaders within Mc Donald should adopt different situational leadership style to solve the strategic goals. For focus on internalisation and emerging markets, the management of Mc Donald should adopt the global and charismatic leadership style. For attainment of success in the emerging markets, the management at Mc Donald needs to adopt a global leadership strategy. Wood and Brotherton (2008) stated that a global leader should have prior industry experience, global strategic thinking, good forecasting ability, flexibility and should be highly sensitive to cultural diversity.

 

Mc Donald has also adopted innovative strategy with respect to introduction of new products within the existing product line. McDonald has strategized to introduce new products like McBites, which are comparable to chicken popcorns of KFC (Goodridge, 2006). The innovation strategy needs to be implemented long with a process of change management within Mc Donald. Thus, the adoption of persuasive leadership style is necessary in this context. The adoption of these skills will help the management of Mc Donald to persuade the employees in adoption of the changes within the organisation. Apart from these leadership styles, Mc Donald should also adopt the participative leadership style within the organisation because adoption of participative leadership within the internal employee relations will help Mc Donald to maintain open culture and open communication within the retail food stores. Moreover, the participation of the employee’s decision with regard to the new strategies and new product development will encourage the employees and make the employees feel important within the organisational context (Sindell and Hoang, 2001).

2.Application of Management and Leadership Theory to support McDonald’s decisions

a. Identification of selected management and leadership theories and their impact on strategy of Mc Donald

Goodridge (2006) leadership theories show cases the different types of leadership styles that should be adopted by the management of the organisation for the attainment of the strategic goals. Lussier and Achua (2009) stated that transformational leadership theory states that the leader should be in charge of identifying the strategic objectives, vision and the creative changes that should be incorporated within the organisations. The adoption of the transformational leadership style within Mc Donald will help the management of Mc Donald to create future strategies and growth visions. The international expansion strategies and the product line expansion strategies are a result of the transformational leadership theory.

London (2001) stated that transactional leadership theory involves motivating and providing necessary directions to the followers for achievement of the strategic goals. However, Northouse (2012) stated that in transactional leadership it is employees are motivated by reward and punishment and it is the duty of the sub ordinates to follow all the orders of the leaders without questioning the capability of the leaders. Thus, adoption of transactional style endangers the internal relationship between the employees and the superiors. In Mc Donald, the management avoids adoption of transactional style since open communication culture is generally followed in Mc Donald. Mc Donald highly depended on adoption of the participative leadership style and allowed the suggestions of all level of employees in terms of decision-making. However, as per Forbes, the strategic failure of Mc Donald marketing strategies like-the text message discount coupons, Food chain finder app and the introduction of the McVeggi for the vegetarian customer segment, questioned the leadership strategy within the retail food chain.

 

London (2001) stated that in this context high degree of participative leadership strategy threatens the attainment of the organisational objectives since participative style does not encourage work schedule. The charismatic leadership theory states that leaders adopting this style are able to influence and persuade the employees to work according to their wish without being aggressive. Thus, Mc Donald should suitably adopt the persuasive or charismatic leadership style so that the open culture can be maintained and the organisational objectives can be achieved effectively. Martin (2006) in this regard added that as per the contingency leadership theory, the leaders should possess two major types of qualities namely maintaining a good rapport with the employees and secondly the leaders should be capable of planning, scheduling and role assignment so that the organisational objectives are attained within the given deadline. In context of achieving the above stated objectives, Mc Donald should also resort to adoption of the contingency leadership style.

b.Leadership Strategy supporting direction of Mc Donald

The internalisation and product diversification strategy of Mc Donald requires high degree of flexibility, situational decisions and good degree of forecasting power in terms of the leaders and the management of Mc Donald. Thus, Morrill (2010) stated that adoption of Global and situational leadership style is favourable for the food retailer at the present context. The adoption of the situational leadership style will help the management of Mc Donald to change the product introduction decisions, pricing decisions and selection of the target market as per the changing business environment. Further, the adoption of the global leadership style will help the management of Mc Donald to effectively expand in the international markets. The Global leaders generally exhibit high degree of forecasting ability and have prior market experience. For expansion in the emerging markets like China, Asia and Japan, the leaders within Mc Donald requires to have customer preference of the respective markets. This will help them to determine the demand for the Mc Donald products and frame the pricing strategies accordingly.

3. Assessment of the current leadership requirements of Mc Donald

a. Current leadership requirements in Mc Donald

The overall restaurant industry is currently yielding low profit margins and loosing the market share due to the cheaper rate of the food items offered in the emerging restaurants of the developing countries. The restaurants in the developing countries are generally getting the low labour cost and thus are able to adopt low pricing strategy in terms of the  food items offered by these restaurants. Mc Donald in 2013 faced the same problem, which triggered the necessity of adoption of a new leadership style within Mc Donald. At present, Mc Donald uses democratic leadership style. The democratic leadership style is good for the organisation because the open communication can be maintained within Mc Donald. However, Morrill (2010) stated that democratic leadership would not help Mc Donald to attain the strategic objectives, which are set by the fast food retail chain. Thus, keeping the current context in mind the Mc Donald requires the following leadership qualities for the attainment of the strategic goals:

  • High degree of flexibility and situational handling of the functions
     
  • Situational leadership strategies
     
  • Employee management and motivational skills
     
  • High degree of creative skills
 

b. Future leadership requirements in Mc Donald

In terms of determination of the future leadership strategy, it may be recommended, Mc Donald in future should adopt the persuasive leadership style. The adoption of the persuasive leadership style will help the management of Mc Donald to interact freely with the employees and conduct the objectives within the given schedule and timeline. There are situations within Mc Donald that requires emergency attainment of marketing objectives. In such situations it is necessary for the management to adopt the persuasive leadership style so that using the charisma and the good communication skills the leader can motivate the employees and help them to attain the organisational objective within the given time schedule. Moreover, London (2001) stated that the company has franchisees on a global basis, hence the management of Mc Donald should be able to manage and co ordinate the functions of all the franchisees successfully. In this regard, Mc Donald should adopt centralisation strategy and transformational leadership style in future. High cultural diversity is also present within the employees of Mc Donald. Thus, it is necessary for leaders at Mc Donald to adopt a participative leadership style so that decisions can be obtained from all levels of employees. Moreover, the adoption of the participative leadership style will ensure the presence of open communication and a congenial environment within the organisation. Morrill (2010) thus stated that future strategic success of Mc Donald would largely depend on the adoption of the people leadership style. Employee satisfaction is a key factor to implement the internalisation policies within Mc Donald. Thus, the future leadership strategies should focus on employee developmental programs like training and development and mentoring programs (London, 2001).

Conclusion

In this report, a critical assessment has been carried out with respect to different important aspects related to leadership and the performance of analysis has indicated significant level of findings. It has been analysed that there has been positive existence of relationship between strategic management and strategic leadership in McDonald, as they aim at accomplishing organisational tasks and responsibilities in a positive manner. With respect to the current and future strategic objectives of Mc Donald, the adoption of situational leadership styles like persuasive leadership, charismatic leadership and democratic leadership strategies should be successfully incorporated within the food chain. There are different leadership styles that are being practiced by the leaders and they are aimed at handling different situations in a highly efficient manner. The analysis also leads to identification that there are certain important management and leadership theories that could be applied in efficiently managing the leader’s role within McDonald. The development of efficient leadership strategy has also been carried out with a view to support organisational direction in an efficient manner.  The analysis also leads to identification of the current leadership requirements that must be addressed by the leader, and there is also an identification of the future major requirements that are also required to be considered by the leader in performing their role efficiently in future. Finally, there has been the planning being carried out with respect to development of leadership skills for a specific requirement of addressing employees within organisation and it is evaluated that the leader is required to consider large number of methods in ensuring the efficient development of leadership skills within McDonald.

 

References

Cameron, K. (2012), ‘ Positive Leadership: Strategies for Extraordinary Performance’, Berrett-Koehler Publishers.

Corporate Social Responsibility: Challenges, Opportunities and Strategies for 21st Century Leaders

DuBrin, A. (2008), ‘Essentials of Management’, 8th ed., Cengage Learning.

Goodridge, D. (2006), ‘Relationships Between Transformational and Transactional Leadership with the Motivation of Subordinates’, Concordia University (Canada).

London, M. (2001), ‘Leadership Development: Paths To Self-insight and Professional Growth’, Psychology Press.

Lussier, R. and Achua, C. (2009), ‘Leadership: Theory, Application, & Skill Development’, 4th ed., Cengage Learning.

Morrill, R.L. (2010), ‘Strategic Leadership: Integrating Strategy and Leadership in Colleges and Universities’, Rowman & Littlefield Publishers.

Mello, J. (2014), ‘Strategic Human Resource Management’, 4th ed., Cengage Learning.

Martin, B. (2006), ‘Outdoor Leadership: Theory and Practice’, Human Kinetics.

Northouse, P.G. (2012), ‘Leadership: Theory and Practice’, SAGE Publications.

Okpara, J. and Idowu, S. O. (2013), ‘CSR, Sustainability, Ethics & Governance’, Springer Science & Business Media.

Schein, E.H. (2010), ‘Organizational Culture and Leadership’, 4th ed., John Wiley & Sons.

Sperry, L. (2013), ‘Effective Leadership: Strategies for Maximizing Executive Productivity and Health’, Routledge.

Sindell, M. and Hoang, T. (2001), ‘Leadership Development: Management Development’, American Society for Training and Development.

Wood, R.C. and Brotherton, B. (2008), ‘The SAGE Handbook of Hospitality Management’, SAGE.

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