Running Head: McDonalds Fast Food Restaurant 1

Organizational Analysis On McDonalds Fast Foods Restaurant

Name

Institution
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Executive Summary

McDonald's is arguably the worlds largest fast food limited service restaurant with branches in over

100 countries.The fast food joint has roughly 10,000 branches with over half a million employees providing

their services.McDonalds is famous for having a uniform menu that entails fries, the Big Mac,desserts,

chicken sandwiches,hamburgers, salads, wraps, chicken nuggets, soft drinks, and other beverages.Over the

years McDonalds expanded its market into other countries using three major marketing and ownership

methods which include joint ventures, company owned restaurants, and franchising which helped ensure

acceptance of the McDonalds fast food restaurant into unfamiliar target markets.In the various countries

where it has opened up branches, McDonald's ensures to serve local foods so as to create favorable

relations with the natives.A survey conducted showed that a percentage of fifteen to twenty of the

restaurants are actually company-owned. The remaining restaurants of are franchises, run by a total 2659

independent owners who pay an ownership fee of between $400,000 and $700,000 for a franchise.

Although its expansion rapidly, we will note that McDonald's still manages an airtight system on

operations, cost and quality by using a centralized structure that ensures cooperation in all its international

fronts.

This paper will provide a background of the company while analyzing the human resource

management and its functions.

Background Of The Company

The McDonalds is a fast food restaurant chain that was founded in 1940 by Richard and Maurice

McDonald. The American restaurant that began as a barbecue restaurant in San Bernardino, California has

grown to be among the top fast food restaurants in the world. After reorganization into a hamburger stand in

1948, it began to develop and take in a new shape and look after Roy Kroc bought it from the brothers.

Staff
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Over the decades, the company has nurtured various people and built a culture that has enhanced its

success and growth making it the largest fast food restaurant chain around the world, located in 120

countries and serving over 68 million people daily. Their outlets employ approximately 50-60 workers who

operate up to 24 hours a day,seven days in a week.They are supervised by on-site managers who are

basically in their late teens or early twenties.The majority of the staff referred to as Crew Members are paid

on a hourly basis.The primary responsibility of these Crew Members is to prepare food,serve customers and

carry out duties which ensure that the restaurant runs on a daily basis.Detailed and specific jobs are

performed by other staff members such as the Training Squad Member,Dining Area Host or Hostesses and

Shift Running Floor Managers.

Products

As we noted earlier,McDonalds aims at offering a uniform menu across all its various locations with

introduction of local choice for the natives.The menu is quite reputable compared to other fast food joints

due to their low value prices with items like Burgers,Cheeseburgers,Chicken Sandwiches,French

Fries,Salads,Sundaes,Soft Drinks and other various beverages.Its joints provide breakfast options that

would include Egg McMuffins,Hotcakes,Muffins and sandwiches. A good number of the new products

were introduces in the last twenty four months in relation with the top managements decision to establish a

menu with a flurry of choices which would record a steady rise in sales.

Irregardless of the wide variety of food products offered,the McDonalds company leans heavily on

the need for uniformity among all its joints.This uniformity is clearly depicted in the restaurants across the

US and certain international frontiers whereby they are open during breakfast hours and they offer a full or

limited breakfast menu.In addition to this,McDonalds introduces and sells new products during limited

time promotions.
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In the subject of being diverse and addressing different target markets,an example is like the Chipotle

Mexican Grill in the US which serves gourmet burritos and tacos and the Aroma Cafe in the United

Kingdom which deals with coffee and serving sandwiches and a number of pastries.

Leadership

The management of the McDonald's band has changed hands over the years with Jim Skinner being

elected Chief executive officer and vice chairman.His duties mainly included the management of various

branches in Asia,The Middle East,Africa and Latin America. In April 19 2004, Andrew J. McKenna was

elected the companys non-executive chairman of the board as he had prior served as the director of the

same very board since 1991.

The decision making process in the company usually involves all stakeholders accordingly thus

indicating the use of the Democratic style of management.There is less tension between the employees and

their respective manages so a comfortable working pattern is established whereby feedback is encouraged.

All the employees are required to synchronize with their strengths and provide input which shows the

advantages of division of labour in a team.They do the more important work as a team rather than

individually.The motivational strategy use will be covered in the next subtopic.

Organizational Strategy

Strategies best define how an organization should organize and use their resources so as to meet their

set objectives. In this diverse and globalized business industry, one of the most imperative strategic

concerns is the management of human resources. An organization is mainly defined as successful or a

failure based on the people working for it. Their attitudes, behavior and objectives determine the growth

and development of the company. Additionally, strategic assets such as financial resources, branding and

other types of resources are more likely to provide a competitive advantage for the firm, but the staff are the
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only resources that can align these assets with the goals and objectives of the company. These various

factors enable the companys strategy to drive to have a superior performance. There are three forms of

stategies namely the corporate strategy,business strategy and functional strategy.McDonalds usually focuses

on the Business strategy whereby with widespread customer satisfaction due to the enhanced customer

service provided by its workers,it gets an edge over its competitors thus boosting its position. In order to

sustain a competitive position in the market,McDonalds introduces a number of limited offers which are

both a force to reckon with in terms of quality and quantity.

Topic One: Maximization of Human Capital

Time over time,there has been a great emphasis on how the creation of enterprise value which is a key

to shareholder value maximization is primarily dependent on the creation of human capital.Many

businesses in the twenty first century have moved towards the strategic Human resources model due to its

utility in building a business.The implementation of Strategic Human resources enables the planners to

develop plans that fit within the company structure.Traditional human resources on the other hand is purely

administrative in nature but it lacks focus on the overall strategic initiatives of the company.The strong

human resource management at McDonalds as created an effective and strong association between strategy

and performance of its employees.This pro discerns the corporation from other joints of its type and ensures

they discover the scope of its operations in the delivery of products and services which is the primary

mission of the company.

McDonalds has focused on the harmonization of organizational activities and practices to the business

strategy covered before.The HR managers in the company liaise with other managers and identify the right

business strategy which they later convert into effective HR practices and processes.In their aim to develop

the desired worker skills and behaviour,McDonalds implemented the use of the appraisal mechanism which

involves promotion,termination, assessments and performance improvement.This in turn brings about an

increase in clear communication between the management and its employees,increased attention through

promoting trust, improved performance and estimation of employee training requirements.The five main

drivers of human capital include financial outcome measures (e.g., revenue growth and cost reduction) and

performance drivers (e.g., customer satisfaction, process technology innovation, product technology
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innovation, globalization).

A major challenge witnessed in the maximization of human capital in the corporation was the

retaining of the companys highest performing employees which are actually difficult to find and employ

because as noted before most of the employees in the joints are people in their early or late twenties and

they have a perception that doesn't clearly favor working in a fast food joint as they view it as odd.

Topic 2:Leading Human Resources in the Twenty First Century.

With the world changing by every minute,there has been an incredible number of pressure building up

on organizations such as globalization,technological advances,new structures and hierarchies,changes in the

workforce including employees priorities,capabilities not forgetting demographic characteristics. With all

these in play,there is an increased need for the human resource docket to play the mother role of helping the

organization to transition effectively.There are three main models of leadership in human resources

management namely:

(a) Transactional leadership: Managers receive certain tasks to perform and provide rewards or punish

team members based on their results. Managers and team members set the goals together and they all move

in unison and follow everything to make sure that the said goals are met.Employees receive rewards such as

bonuses when the set goals are accomplished.

(b) Transformational leadership enables the leaders to motivate employees and enhance efficiency

through communication and casual visibility.

(c) Participative leadership also called the democratic leadership style gives a forum to the employees

so that they can air out their concerns or churn out ideas that will help the organization in meeting its

objectives.Even though the employees get a forum where they can be free to share their ideas,the main

decision usually falls on the leader. This leadership helps boost employee morale because the employees

get a sense of responsibility in the decision making process.

The McDonalds franchise normally depends on the Participative leadership and the Transactional

leadership which enables for team work and rewards after a task is accomplished.
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Topic 3:Guiding Talent Management Efforts

The McDonalds Staff Training and Development is a docket in the corporation that enhances

the employee value within the organization and provides an advanced, effective advancement program. The

training and development departments ensure that their job compatibility and practical knowledge in the

sector and thus they are important in every organization, particularly the corporate ones. As an international

company, McDonald's invests both money and efforts in its training and development docket, which

reduces the employee turnover and improves the workers satisfaction.

The McDonalds training and development unit consists of three major elements: training,

learning, and development. The training and development docket is made up of three major elements

namely training learning and development.First, the trainees are tutored to understand the companys

operations and gain the skills that will ensure they can compete in the firm. Both new and existing workers

always receive training during induction and while on-the-job not only to get the opportunity of promotion

but also to ease the transition in case of an employee exchange or transfer (Calvert, Mobley, & Marshall,

1994). Second, education gives the employees learning skills which they can apply within the company and

in the process they get a sense of personal growth. It also gives an opportunity for both trainees and leaders

to learn from each other during interaction(Kirkpatrick, 2005). Last but not least, the developmental

aspect concentrates on preparing the plans and establishing the Hamburger University along with the

Leadership Development program. Overall, all the efforts of the department are primarily focused on

developing the skills of an employee with the intention of benefiting the company.

The internet has over the years impacted the process of recruiting and managing talent

(Advanced Series in Management, Volume 24 : Electronic HRM in Theory and Practice, 2011)(p.143) The

novelty has turned into a normal phenomenon.2001).The sudden increase in recruitment activities on the

internet is in no way a surprise as payoffs can be substantial and it has been estimated that World Wide Web

saves up to 90% of financial cost of traditional recruitment while 25% of time saving (Sylva & Mol,

2009).McDonalds has used social media to advertise for job offers which in all sense has brought about

competition in applications. The internet has also helped new employees make transition into their roles in

the company, as well as having an understanding on the organizational culture.

Topic 4: Leading the Mosaic In a Global Economy

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Since its inception in 1955,McDonalds has burgeoned into over 36000 restaurants in over one hundred

countries.Its expansion has brought about a high increase in its global revenue.The idea of it being

franchised whereby individuals own the joints has brought about several job opportunities with it now

being deemed as the worlds leading food service retailer.The companys strategy to develop its global

workforce is designed in a way that is aligned with and support the execution of its strategic business goal,

which is to become everyones favorite place and way to eat. They have has an overall Plan to Win

which provides the international business with a common framework for developing tactics so as to reach

this goal. The framework includes five key elements namely: 1) People, 2) Place, 3) Product, 4) Promotion,

and 4) Price.

The worlds nations are diverse in many ways.But at least 118 of them share one similar

characteristic,they have McDonalds.A survey conducted by the D&I,shows that McDonalds Corporation

is the most diverse company in the globe since its diversity and inclusion efforts extends across the business

and beyond. Seventy percent of the restaurants employees are women and people from the minority

groups. Similarly, close to 45 % of the franchises are actually owned by people from various minority

groups and also women. It spends close to $5 billion every year on the diverse suppliers who make up to 55

percent of the vendor suppliers population.

It is known to be one of the companies around the globe with strong networks of African Americans

whereby, the employees are represented in the McDonalds African American Council and Franchisees.

There are other programs that represent the black employees such as rte Black McDonalds Operator

Association (BMOA) and the 365 Black. Since the heart of McDonalds is in providing equal opportunities

for growth for individuals from the local communities and diverse backgrounds, the organization has grown

and developed to be what it is today. It has trained and nurtured over 25 percent of women and individuals

from the minority groups to be leaders.

In order for McDonalds to successfully execute its business strategy the company has determined it

needs to effectively implement a balanced global/local approach in managing its global workforce. While

global frameworks can be used to set the stage for success and position the entire business with regard to

strategy, essential tactics, and a diverse company cultureat the end of the day, the execution of the
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companys plan to win will depend on the capability of local talent to develop and customize the tactics

that their culture deem fit. McDonalds success relies not only on the leverage that comes from its business

strategy and focus on standardizing core operations/processes but also on its ability to adapt its tactics to fit

the needs and preferences of specific customers in particular regions or countries and to develop a deep

connection between McDonalds and the local communities in which it operates.One thing that stands out

from the rest is the ability of the CEO,Skinner, to put the customers wants and needs ahead even if that

means he has the companys.

The company has reinvented itself as a large scale retailer backed by a strong management and

significant dividend shareholders.

Topic 5: Managing Human Resources During Organizational Change

Change management in an organization is broadly defined as the process of continually renewing an

organizations direction,structure and capabilities to serve the ever changing needs to external and internal

customers.(Moran and Brightman, 2001).According to Burnes (2004) change is an inevitable feature which

will always be present in an organizations course. It exists both at operational and strategic level.In early

times,the theories posed claimed that if an organization kept changing its management system then it would

no longer run effectively nor would it make any improvement in its performance.That would mean that the

organization would have to disrupt its daily routines so as to cope up with the new changes.

Kurt Lewin devised a tree step model which entailed the following steps:

a. Unfreezing: where an individuals sets aside their old behaviour which can cause harm to the company in

future. Here the corporation can identify where it is lacking in terms of product and service providing to its

customers.

b. Changing: Here the organization develops individual employee so that they can learn new behavior and

methods of working.For this to be a success, one should understand that the change introduces is to boost

the overall results.

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c. Refreezing: This is undoubtedly the last step in the change model whereby it states that whatever an

individual has learned in the workplace should be integrated in their actual practice therefore the employee

has to follow the new patterns of beliefs,behaviors and feelings.This helps them adopt a new behaviour.

Transformation efforts fail usually because of how people perceive change.Change can be a good thing and

one should approach it with a positive mindset.For this to work,we have eight steps coined by Kotter

(2010) which include: developing a strong coalition,developing a vision for change, communicating the

vision, eliminating obstacles, developing short term success, building on change and implementing the

changes in the corporate culture.

Topic 6: Engaging Employees through Organizational Development

While the benefits of an engaged workforce are clear, how to create an engaged workforce is not. As

much as leaders, and HR practitioners for that matter, would like to be able to put people into a process and

immediately turn them into engaged employees.Employee engagement is not a plug-and-play activity. One

needs to create an engaged organization which requires a systemic and holistic approach. This calls for an

audit at the work design,everyday conversations between leaders and those who work with them,leadership

behaviors, and at how change occurs in organizations.McDonalds provides the tools,training and

opportunities for its employees to do different things.Corporate culture at the company is characterized by

an unwavered contribution toward employee goals which includes provision of necessary resources to

succeed within the company.

Topic 7: Delivering Total Rewards

Beyond formal training and development,the company focuses on investing into reward and

recognition programs for its employees,franchisees and suppliers who hold the three legged stool together.

The employees get service awards after every five years,the top restaurant per financial quarter,the

restaurant of the year,the presidents award which goes to global staff,the Ray Kroc Award which goes to

business managers and the restaurant bonus schemes which are issued with regard to the restaurants

performance.

Recommendations
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1.Maximizing on human capital

The franchise should stop focusing on hiring new people and focus on the one they have.There is a need to

keep the employees happy and engaged so as to ensure success and productivity.If it comes to the need for

off-boarding,the management should make sure that they match the off-boarding numbers with the on-

boarding numbers so as to avoid any conflicts.

The Human Resources also has to learn how to manage each employee and help them focus on their

strengths.Leadership development and employee engagement are ongoing processes designed to be

strategic,sustainable and also measurable in all senses. Programmes should be evaluated so as to provide

personalized and effective results for your workers.

2. Leading Human Resources in the twenty-First Century.

So as to cope in the changing times,the fast food chain needs to do a Person-Job-Fit in getting individuals

who have qualifications that meet the set criteria.Research shows that complete specifications off required

competencies helps reduce the influence of any stereotypes,be they gender or racial.With regards to

ergonomics which is the study of people at work and the practice of matching the features of products and

jobs to capabilities,preferences and limitations of the employees.This also ensures that jobs are designed

and trimmed in a way that is safe and efficient while improving comfort,safety and performance of each of

the users.

The human resource docket should also be able to make acute future orientations to ensure that they

manage any changes in the market segments.A case example of a changing tide is the very fact that people

are resorting to healthier diets.By maintaining a focus on industry trends the docket can prepare to evaluate

the impact that particular change is likely to have on an organizations people and processes and ensure the

leaders can decide on how to respond to the curve ahead not behind it.A clear channel of communication is

also required so as to keep the employees in check.

3. Guiding Talent Management Efforts

So as to ensure there is a continuation of organizational culture the HR can:

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i. Align individual goals with corporate strategy.This is a powerful management tool that ensures that

every employee understands their individual roles.Whenever employees are engaged in goal

alignment,they get a sense of ownership in the companys ultimate success therefore they come more

committed to the company and work to ensure its goals are met.

ii. Create a channel that allows for breakdown of information silos while developing collaboration: The

McDonalds corporation must ensure they overcome the organizational silos that prevent the flow of

information in the organization.It being a global corporation,knowledge and information must be

readily available or proactively delivered to the managers.

iii. Improve the return investment to their developing employees: They ensure they and on to their valued

employees.

iv. Preserve the investment by balancing employee and employer interests.

4.Managing Human Resources During Organizational Change.

As noted earlier communication is a vital tool when it comes to change in the organization as it helps the

employees transition smoothly.Franchises might be closed,sales might drop,bonuses might be late or even

some employees might be offloaded.It is the primary role of the company to deal with employee angst and

turmoil during the periods of change.For them to understand the change,they must first understand the

vision.A clear communicated vision is vital and is of importance in the beginning of the change period

where misconceptions and misinformation are rampant.The Society of Human Resource Management

competency model calls for a human resource docket that enables for consultation,leadership and

navigation,critical evaluation and strategic agility.

5.Engaging Employees through organizational development

In order to ensure that the organization develops effectively without experiencing any hitches whatsoever,it

is fair to engage and convince your employees in your management plans. If the organization moves

forward with some culture change initiatives,a good portion of the employees will be open to the shift but

there will always be a few who will not oblige.So it is imperative that the Human Resources Department

learns how to embrace everyone in the organization.Hold focus groups with key stakeholders so as to
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provide the opportunity for them to share their concerns with the leaders.

Conclusion

The Human Resource management practices at McDonalds is one of the major reasons why the food chain

has a continued success rate across the globe.The career training and development offered to its employees

keeps them motivated and committeed to deliver the best services to their customers.The opportunities

offered at McDonalds allows them to move around from one function to another so as to get experience in

all areas in the business sector.The reward scheme,service recognition awards and private medical care top

the list on the various practices that make their Human Resources Department stand out.
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