COLLEGE OF BUSINESS,

HOSPITALITY AND TOURISM

STUDIES

DEPARTMENT: MANAGEMENT /
IR/ OHS
MGT 606: QUALITY CIRLCES IN MANAGMENT

Group Members:

Shanal Kumar- 2014120897

Shonal Radika Prasad- 2015127650

Hirdeshwaran Nair- 2015127567

Acknowledgement

We would like to thank the following people who generously assisted us in the completion of our
project.

Firstly, we would like to thank our parents who supported us financially to print out our
project.

Secondly, our MGT 606 lecturer Ms Noreen grounder who guided us through this
project.

Finally we would like to thank the MAC DONALDS organisation who took out time to
fill in the questionnaires.

We would like to acknowledge that without their contribution, our project would not have been a
successful one.
 STATEMENT OF DECLARATION

We, Shonal Prasad, Shanal Kumar and Hirdeshwaran Nair , would like to solemnly
declare that this project is of our own hard work and is not copied from any other
source.

All the sources used in this project are correctly referenced in the Bibliography
section.

Shanal Kumar _________________. Date: 15 / 07/2016.

Shonal Prasad ________________.

Hirdeshwaran __________________.
Aim/ Objectives

The aim of is project is to find:

The benefits which the organisations achieves by implementing quality circles

programme in there organisation.

Types of roles that top management plays in facilitating the activities of quality
circles.

Promoting creativity and innovation throughout the organization

Improving communication throughout the organization

The levels of strategy which helps formulate and implement goal achievement at
MacDonalds.

Problem identification and solving processes used by mac Donalds quality

circles.
Methodology

For the successful compilation for this research project, various methods were used for gathering
information. Both primary and secondary researches were done.

i] Primary Research

To carry out the primary research questionnaires were given out. First of all the aim was
formulated and checked finalised, they were given out to the MacDonalds. The respondents
were given two weeks to complete the questionnaire after it was collected and safely kept for
further analysis.

ii] Secondary Research

The project was carried out by intensive reading of the various printed material for this project
specifically, such as newspaper articles and internet was served out for more information. These
were also kept in a safe place for usage of final compilation.
Literature review

Quality circle is one of the important tools used under the total quality management concept for
the development of human resources assumed its importance after the World War II. Even though
the concept of quality circle was originated in Japan, it has been adopted and followed by a number
of countries for the development of their human resources. As a human resource development tool,
it was found to be effective for improving the level of performance of employees in various sectors.

A quality circle consists of a small group of employees, led by a supervisor, who attempt to identify
a solution to a work-related problem. If the group identifies a solution, the supervisor presents the
group's findings to upper management for review and possible implementation. Although the
intent of the quality circle is to inspire teamwork, improve organizational communication, promote
process ownership, reduce costs and eliminate resistance to change, the process is not always
advantageous.

According to Dewar, President of the international association of QCS defines quality circle as
a way of capturing the creative and innovative power that lies within the work force. Basically it
is the small group of workers who perform similar tasks, meet regularly to identify and analyses
and solve work related problems and it consist of 3-12 members who are voluntary. The quality
management practice was originated by Kaoru Ishikawa in Japan in the year 1962. The three
attributes are: quality circle is a form of participative management, quality circle is a human
resource development technique and quality circle is a problem solving technique. The objective
of QC is:

To improve the quality and productivity and thus contribute to the improvements and
development of the organization
To improve communication within the organization
To increase employee loyalty and commitment to the organization and its goals
To satisfy human needs of recognition, achievement and self-development

Quality is the degree of excellence of a product or service. The purpose of quality control is to
make sure a product or service is likely to serve the purpose for which it is intended. Quality
standards are ultimately derived from the companys objectives. If the company wishes to gain a
reputation for high quality products, standards will have to be high. The company must have a
very rigid quality control program in order to meet these high standards. Increased quality
generally results in higher costs and allows higher price on the other hand some firm may sell to a
market segment that desire lower price and will accept low quality.

The purpose of quality control is to ensure that a certain level of excellence is attained. Quality
control must also be concerned with the cost of increasing quality. Therefore it is important for the
organisation to meet company objectives and determined the implementation of quality circles in
there organisation. Strategic quality planning process should be well developed, with plans based
on analysis of meaningful data from customers, operations, employees, and the business
environment. The documents the steps required for successful implementation, and to ensure the
implementation process are properly executed. This overall plans the company and the individuals
goals set to be achieved by the organisation.
Introduction

McDonald's is the world's leading global food service retailer with over 36,000 locations in over
100 countries. More than 80% of McDonald's restaurants worldwide are owned and operated by
independent local business men and women.

McDonald's is the world's largest chain of hamburger fast-food restaurants, serving around 68
million customers daily in 119 countries across 36,538 outlets. Founded in the United States in
1940, the company began as a barbecue restaurant operated by Richard and mar cue McDonalds.
In 1948, they reorganized their business as a hamburger stand using production line principles.
Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently
purchased the chain from the McDonald brothers and oversaw its worldwide growth.

A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The

McDonald's Corporation revenues come from the rent, royalties, and fees paid by the
franchisees, as well as sales in company-operated restaurants. According to a 2012 BBC report,
McDonald's is the world's second largest private employer behind Wal-Mart with 1.9 million
employees, 1.5 million of whom work for franchises.

. A quality circle consists of a small group of employees, led by a supervisor, who attempt to
identify a solution to a work-related problem. If the group identifies a solution, the supervisor
presents the group's findings to upper management for review and possible implementation.The
quality management practice was originated by Kaoru Ishikawa in Japan in the year 1962.

Moreover this assignment will be discussing the importance of having quality circles in the
organization MacDonalds. Therefore our group has choose to research about MacDonalds
corporation because it has a diverse environment and of its languages, consumers, governments,
cultures and food tastes. Moreover this assignment will research on the policy and planning and
evaluation of the quality circles programme with organizational culture adapted by the company
and how it is been carried out in the organization.

Finally we would be also focusing on the benefits that the organisation has achieved by
implementing quality circles in there organisation, thus the important roles that top management
plays in facilitating activities in quality circles and how quality circles was implemented in Mc
Donalds.
Company Profile of McDonalds

Type Public

Traded as NYSE: MCD

Dow Jones Industrial Average Component
S&P 500 Component

Industry Restaurants

Founded May 15, 1940 in San Bernardino, California;

McDonald's Corporation, April 15, 1955 in Des Plaines, Illinois

Founder(s) Richard and Maurice McDonaldMcDonald's restaurant concept;

Ray Kroc, McDonald's Corporation founder.

Headquarters Oak Brook, Illinois, U.S.

Number of 34,000+ worldwide[1]

locations

Area served Worldwide

Key people Andrew J. McKenna

(Chairman)
Don Thompson
(President and CEO)
 Products Fast food
(hamburgers chicken french fries soft
drinks coffee milkshakes salads desserts breakfast)

McDonald's Corporation, also referred to as Mickey D's, (NYSE: MCD) is the world's largest
chain of hamburger fast food restaurants, serving around 68 million customers daily in 119
countries.( en.wikipedia.org/wiki/mc donalds )
History /Back ground of McDonalds

The McDonalds restaurant was first introduced in San Bernardino, California by Richard and
Maurice McDonald of Manchester in 1940. Then the business was further modified and
expanded by their business partner Ray Kroc. The number of McDonalds outlets started
increasing in the 1980. As the company entered new markets; it showed increasing flexibility
with respect to local food preferences and customs. In 1980, the 6000th McDonalds restaurant
opened in Munich, Germany. This year McDonalds also introduced their first poultry item
known as McDonalds chicken sandwich. The chicken Mc nugget was also introduced in 1980
and it started to gain its success by early 1983.

Furthermore, the marketing side McDonalds scored big in 1996 and 1997 through the use of
advertisements and by promotion in various ways. For example a number of customers
purchased happy meals just to get the toys and threw the food away. McDonalds also benefited
with global marketing alliance with signed with Disney / pixer movies to promote them in global
marketing. McDonalds is also one of the multinational corporations along with star bucks
corporation and Nike.

In the early 2000s McDonalds was pulled out of sever at countries including Bolivia and in
Middle East nations, because of the negative regard with the brands in some areas. To regain
them back in this marketed area, McDonalds launched several new menu including salads, Mc
griddles, breakfast sandwiches and white- meat chicken Mc nuggets. Some outlets began
marketing fruits and vegetables as happy meal option. On September 29-2003, McDonalds
launched a campaign began featuring youthful images, hip music and pop culture celebrities
touting the tagline, Im lovin it.

More over in 2006, McDonalds begins their forever young branding and re-designing their
restaurants featuring during zones with distinct personalities. Most of their outlets offer three
sections or zones.
A zone designed specially to accommodate young adults, who socialize while setting
comfortably on armchairs or sofas using free Wi-Fi access. Another zone offers counters and
stools for patrons in a hurry who might just grab and go. The third important zone is the one for
families or groups where seating arrangements are arranged in the way which meets a variety of
needs.

Adding on in July 2011, McDonalds announced that their largest restaurant in the world will be
built on the 2012 London Olympics site. The restaurant will contain over 1500 seats which are
half the length of an American football field. This restaurant will over shadow the current largest
McDonalds in the world in Moscow, Russia.

Number of McDonalds Restaurants Worldwide

McDonalds corporation is worlds largest chain of fast food restaurants. This company
began in 1940 with a first restaurant introduced in San Bernardino, California by Richard and
Maurice McDonalds.

According to the McDonalds corporation web site currently McDonalds has, more than
33,000 restaurants around the world in 118 countries.

Vision

McDonalds vision is to be a fast- food restaurant with the best service in the world. To achieve
this vision, McDonalds has always guarantee the quality of products, provide outstanding
service, offer the hygiene and safety products as well as other added values as for McDonalds
every customers smile is the most important thing.

Mission

1. Being the best company for all of our employees in every community around the world.

2. Delivers service with superior operational system for each our customers in every branch of
McDonalds restaurants.

3. Keep progressing in a favourable direction as a brand, as well as continuing to develop

operational systems McDonalds toward better through innovation and technology.
McDonalds Common Products

Hamburger- also known as the junior burger in some countries the hamburger and cheese
burger are the companys original grilled burger offering which is been served from 1948. Menu
is still a common product of McDonalds till known.

Mc chicken also offered hot and spicy in some markets, it is a spicy chicken sandwich made
from 100% ground white meat chicken; together with shredded lettuce on a toasted bun.

The happy meal (mighty kids meal) McDonalds introduced the first happy meal in 1979
which includes fun meal concepts of a childrens meal. The meal includes an entry, a side dish a
beverage and a toy.

Mc muffins - are McDonalds signature breakfast sandwich in the beginning it was only sold in
selected restaurants but know available in all their major outlets.

McDonalds primary soft drink supplier is the coca- cola company. Except in some restaurants
which fall under an overall contract with Pepsi, McDonalds other products includes (soft drinks,
coffee, milkshakes, salads, and dessert breakfast).

McDonalds Competitors

There are many competitors in the market who try to compete with McDonalds, for example,
the top companies which give McDonald a great competition are; Star Bucks Corporation, Yum
Brands, KFC, Chipotle Mexican Grill, Darden Restaurant Inc., Burger King, but still with this
competition level McDonalds remains the number one fast food restaurants in the world.
Policy Planning, Implementation, Review and Evaluation of the Quality Circles
Programme at MacDonalds

The purpose of quality control is to ensure that a certain level of excellence is attained. Quality
control must also be concerned with the cost of increasing quality. Therefore it is important for the
quality necessary to meet company objectives to be determined in the planning stage.
.
Benefits of Implementing Quality Circles Programmes at MacDonalds

Quality control is a comprehensive and structured approach to any organizational management

that seeks in knowledge creation, organization improvements and employee motivation, team work
and self-development of employees. In MacDonalds through the execution of initiatives
surrounding the five elements of its plan to win people, product, place, price and promotion.
MacDonalds has enhanced the restaurant experience for customers worldwide and achieved
comparable sales and costumer insights.

Self- Development
The benefits of Quality Circle at MacDonaldassist in self-development of members by
improving self-confidence which is attitudinal change and a sense of accomplishment. The
employees' confidence at work comes from knowing what to be done at the work place.
Their abilities are noted by others which in turn boost their confidence and improve their
self-image. It promotes the improvement of services in the organization and a change in
environment of more productivity, better quality, reduced costs, safety and corresponding
rewards. This benefit can make employees feel good about their work where the
productivity and morale of their work increases. They can focus on their work
responsibilities instead of worrying about the reactions of others and they are optimistic
about reaching their objectives.

Social Development
MacDonalds has gained social development where every member cooperates with each
other in the consultative and participative of Quality Circles. It leads to the development
of employees and the management where they work in peace and harmony in the
organization. These would enhance productivity in meeting the objectives or goals of the
Company where team work is the main method of their success.
Opportunity to attain knowledge
The employees of MacDonalds have a chance for attaining new knowledge by sharing
opinions, thoughts and experience. This knowledge is then carried out in their individual
work where they can improve their working methods and many more.

Enhanced Communication Skills

The implementation of quality circle in the organization has enhanced communication skills
which improves the two-way communication between the staff and the management of
MacDonalds. These deals with the employees are able to well with the customers. They also
deal and help resolve any customer complaints0. It builds teamwork between employees
where communication was very vital that motivates other members to achieve their objectives.

Job Satisfaction
The employees of the MacDonalds are satisfied with their work where it drives them to
contribute more and enhance productivity to the organization. It promotes continuous
improvement in products and services where there is fewer defects found in the working
methods. It brings about changes at the work place where they provide service delivery
perceived as being of good quality by customers so as to generate customer satisfaction
which in turns drives customer retention.

The importance of the delivery system is retaining customers with the explanation by the
long-term value of loyal customers. The measures taken by the Company as per return on
quality are the improvement in the services that implies in the spending on quality which
improves the revenue of the Company. It involves in the justifying of all quality
improvement efforts financially in knowing where to spend and not to spend on quality
improvement.
Knowledge creation.

It is a challenge for managers to design and execute quality management practices so that they
create new knowledge as well. In MacDonalds knowledge is created through multiple channels
and at various organizational levels through the help of the quality circle teams. MacDonalds
quality teams practise these six practices which enhances their productivity.

Continuous improvements for MacDonalds this is an opportunity

seeking factor. The customers taste has now become more diverse.
MacDonalds is adapting new format of services e.g. the introduction
of the samurai taste.

Statistical quality control MacDonalds uses this to detect whether their processes are
being affective and does their process affect the quality of their products and services.
They have two charts involved in it, Pareto charts and PDCA cycle.

Customer satisfaction due to such intense competition MacDonalds gives their

customers superior product and services. The QC teams develop strategies in retaining
customers. For e.g. MacDonalds give discount on every food item. They also give low
cost menus which are preferred by large number of customers. The QC team also carry
out customer satisfaction surveys.

Process improvement techniques

Individual learning

New product development

The role Of Top Management in Facilitating the Quality Circles at
MacDonalds

Top Management team of a company controls decision making that affects

everyone form president down to the entry level employees. Those decisions, along
with the way the management members treat staffs, affect the success of the
company. Understanding those effects helps the management team make necessary
changes to improve the achievement of the company. The corporate policies and
acceptable behaviors generally start at the top of management. The leaders of the
company establish procedures and expectations through those policies. A culture
that encourages creativity and innovations is likely to result in a company that is
successful and continually comes up with new ideas. Top management is usually
responsible for establishing the goals and vision of the company. To reach higher
achievements for the company, top management needs to establish goals that push
employees to grow. The goals must take into consideration the companys current
situation. The management needs to decide what achievements it wants to reach and
how the company will grow going forward.
The main roles of top level management at MacDonalds in facilitating the activities
of quality circle are as follows:

1. Organizational improvement.

The quality circle teams are responsible for the growth of MacDonalds performance.

Ordering burgers and fries is becoming more orderly at MacDonalds restaurants (Julie Jargon).
MacDonalds has invented their dual point ordering system. This system sees customers place an
order at the end of counter and then get a receipt with an order number. As soon as the food is
ready, the order number is displaced on a monitor and the customer picks up his food at the other
end of the counter.

The employees thank and ask the customers to come again in the process of giving the package
out. The receipt is scanned to avoid any miss-confusions. The idea was developed to avoid chaos
and ensures that customers are served well. The quality circle in MacDonalds across the globe is
keen on achieving speed and friendliness of services across the chain which is their ultimate goal.
MacDonalds has also started using new software recently which helps owners decide the optional
number of employees to have on hand at a given time.

2. Employee motivation.

In MacDonalds employee motivation has been built in their strategic plans. This sort of
relationship between the employee and management makes MacDonalds the fast food giant in the
world. The opportunities in MacDonalds see that employees tend to be in casual environment
where they would take and socialize and at the same time work. Many of the employees working
in shifts are most college students who are presented with an opportunity to meet new people and
develop friendships.

MacDonalds supports and back their employees on their performance. The quality circle team
provide skill training to new staffs so that they adhere to the rules and regulations of the
management. Employees showing job commitment receive incentives through the MacDonalds
two bonus schemes.

Each month, all employees in the top 10% of restaurants, based on mystery shopper scores, receive
a bonus. This bonus is based on three weighted measures; mystery shopper score, sales growth and
productivity. The quality circle control unit challenges the employees to deliver the best customer
services.

(www.employeebenefits.com/)

MacDonalds motivation and regulation scheme:

Restaurant of the quarter (Divisional)
Restaurant of the year
Presidents Awards : global scheme for support staff
Ray Kroc Awards for business managers
Champion of the month : ultimately feeding into employee of the year scheme
Restaurants bonus scheme

MacDonalds is also investing in communication motivating plans. This was needed by

MacDonalds to build their organization culture. Through this the employees are more engaged
with their task and effective.

There is no doubt that happy and motivated employees do a better job.

Motivation tips:

ensuring the right employee behaviour are recognized

Ensuring of frequency of recognition and reward is right for the work force.

Understand what employees want and value.

 3. Teamwork and self-development of employees.

Training and personal development are a good way to motivate staffs and this leads to self-
development of employees. Every year MacDonalds dedicates over 10 million dollars to train on
young employees. MacDonalds staff Training Program is an ongoing skill training that teaches
its staffs valuable skills. The staff trainers work shoulder to shoulder with trainers while they learn
the operation skills necessary including services from the front counter to the grill area.

The employees learn to operate state-of-the-art food service equipment, graining knowledge of
MacDonalds operational procedures.

The manuals and videos have a step-by-step process which covers every detail from how to make
a Big Mac to how to deliver exceptional service to customers.

MacDonalds business demands teamwork, discipline and responsibility; MacDonalds experience

results in enhanced communication skills as well as greater self-confidence; and MacDonalds
stresses customer care and attitude which industry experts recognise as an essential ingredient for
business success .

The Management Development Programme (MOP) provides managers with technical functional
and management skills that are needed to maintain MacDonalds leadership role in the quick
service restaurant industry. MacDonalds team also ensures that there is a respectful work place
exists in the restaurant. The teams responsible for ensuring all safety, sanitation and security
procedures are followed. The quality team are to look in implementing and conducting in
restaurant new products and procedures. The other team are responsible for solving the different
types of conflicts arising such as; relationship, conflicts, data conflicts, structural conflicts, value
conflicts, working hours etc.
Process of Quality circles of MacDonalds Fiji
1. Problem identification: The member of the Circle identifies series of problem that exists
within Mac Donalds. There could be more than one problem faced by Mac Donalds at any
one particular point in time. The operational managers are responsible for identifying the
problems

2. Problem selection: The members then look at the seriousness of the problems and select the
ones that need immediate attention. The most extreme problem which requires immediate action
is selected.

3. Problem Analysis: The selected problem is then analysed according to the reasons of the
problems. Details of potential drawbacks to the organisation and other extreme effects are
analysed. The quality circles team at Mac Donalds performs this step very carefully to obtain
every detail of the problem faced by the organisation.

4. Generate alternative solutions: various solutions to the problems are drawn by various means
such as brain storming, Data Collection and data analysis. The quality circles team generates
solutions which best depicts the best interest of the business or works on the wellbeing on
employees depending on the problem faced.

5. Select the most appropriate solution: the most suitable solution to the problem is selected.
The cost vs benefits are analysed and quality can also be a plus point on the selection of the
solution.

6. Preparation of plan of action: The members of the quality circles prepare onto how they will
brought in about changes whether they will do it pilot or in phases. Pilot action is when the action
is only implemented in part of the organisation and once successful is implemented in whole of
the organisation. Whereas phases approach is when the solution is implemented gradually over a
period of the. This is considered more effective.
7. Present solution to management for approval: The selected solution and the plan of action
are presented to management for approval as the management are the ones who give existences of
quality circles.

8. Implementation: the drawn solution is implemented according to seriousness of the problem

whether it is front office or back office. Pilot or phases approaches are used at Mac Donalds to
implement the solution. Training to employees concerned are provided so that they are not in
culture shock.
Recommendation

Mac Donalds is a powerful brand name. Thus, its strategies seem so good. However, in
my opinion, I still have several recommendations for this company. To begin with, Mac
Donalds has greater capabilities to expand its business in many more countries. Company
should prepare an international strategy which focuses on big cities along with high
populated areas such as Asia. If Mac Donalds can develop more and more in Asia, it is a
Hugh advantage for company to gain market share. Secondly, company does not diversify
its products regularly while competitors are stronger and have new products gradually. Mac
Donalds should spend more money on Research and development to create new products
and service as well as increase efficiency of operations. Moreover, toys have to be cared
much more with many new interesting toys as well as safety. Also the play place for kids
can be developed more with new and interesting themes which are currently trending in
the market now. Mac Donalds can also walk on bringing new vegetarian products to
restaurants menu. An organic menu is very necessary. This would give customers an
alternative while allowing Mac Donalds to maintain its market share. Finally, customer
service. Managers at Mac Donalds are trained professionally. As a result, they can train
employees well. Mac Donalds employees are evaluated high by customers because of their
behaviours as well as their attitude. However, customers are not pleased at the idea of
waiting on long lines and insufficient employees to handle the volume of customers.
Conclusion

In conclusion, it was found that MacDonalds has gone through the Quality Circles programme
where it has developed and increases the economic efficiency and accountability, improving
their performance in taking appropriate measures to revive under-performing staffs, to
implement a staff development program, to develop the professional skills of employees, train
and induct new staff, to specialize and focus on all relevant human and financial resources onto
specific functions, to increase in net profits and bring in more revenue in the organization,
increase the effectiveness of demand and increase the availability of services.
n
It has also improve the processes in the organization where there were few defects found in
services as well as building customer relationship in retaining customers. The services of the
company have positive and negative impact on the life of the organisation respectively. The
organisation has been analyzed which focuses on the quality circles that is implemented to
improve processors and enhance productivity.
BIBLIOGRAPHY

Andrle, J. (1994), Total Quality Management in Public Transportation, Research Result

Digest, 3, pp 1-33

Hardie, Neil. (1998) The effects of quality management on business performance.

Quality Management Journal. 5:65-83

Hutchins, David C. (2008). Hoshin Kanri: the strategic approach to continuous

improvement. Burlington, Vermont: Gower. ISBN 978-0-566-08740-0.Accessed 12th July
2016.

Juran, Joseph M. (1992). Juran on quality by design: the new steps for planning quality
into goods and services. New York: Free Press. ISBN 978-0-02-916683-3.Accessed 13th
July 2016

Stebbing, L., (1992), Quality management in service industry, Ellis Horwood Limited,
pp21
Appendix

Questionnaire

1. What are the quality circle programmes that exists in your organisation?
2. What are the benefits achieved after implementation of quality circles
programmes in your organisation?
3. What is the role played by top management in facilitating quality circles in
your organisation?
4. How does quality circle motivate employees in your organisation?
5. What are the limitations of the implementation of quality circles in your
organisation?