Management by Objectives - McDonald's Case Study

McDonald's is an American-based Fast-food Service Restaurant (FSR). It originated in California in 1940. This case study focuses on Capacity Management to reconcile capacity and demand, Implementation of the four D's by the McDonald's restaurants, and Performance objectives mean for the operation of McDonald's.

Case
Study

Table of Contents
Introduction........................................................................................................................................1
Capacity management to reconcile capacity and demand?............................................................2
Implementation of the four Ds by the McDonald’s restaurants?..................................................3
Performance objectives mean for the operation in McDonald’s?.................................................4
Quality..................................................................................................................................................4
Speed....................................................................................................................................................4
Dependability.......................................................................................................................................4
Flexibility.............................................................................................................................................4
Cost.......................................................................................................................................................5
Averagenumber of customers arriving at the till and the average time they must wait before
exiting McDonald’s Drive-Thru........................................................................................................5
Queue Management System.................................................................................................................6
References...........................................................................................................................................7

Introduction
McDonald's is an American-based Fast-food Service Restaurant (FSR). It was originated in
California in 1940. Finally, the system of an assembly line was transformed, rolling burgers in a fast
manner. This was the start of a phrase from George Ritzer, a sociologist, who called for
effectiveness, calculability, predictability, standardizations, and power. This was a prelude to the
"McDonaldization" business. This form of the framework is currently used not only by many QSRs
but also by numerous other agencies and organizations. Ultimately, the golden arches of
McDonald’s were made a popular display in cities and towns around the world. In 2019, worldwide
restaurants numbered 38.7 thousand, a statistic that has risen over the past 10 years. (Topic:
McDonald's, 2020). The income of McDonald declines by 30% with lockdowns on operations of
Covid-19. During the pandemic, worldwide restaurants were shut down and only drive and order
activities were limited. It registered a rise in global revenue in the same store than expected as
restaurants throughout the world had been closed due to the epidemic, reducing operations to drive
and produce. Over the second quarter, worldwide sales of same-store businesses declined 23.9
percent, pushed down by sizeable foreign shops such as the UK, France, and Latin America.
Revenue declined by 30.5% to $3.76 billion. McDonald's company strategy is considered 'the
winning plan.' McDonald's is not the major fast-food chain; it is the finest fast-food chain.
McDonald's is trying to do this by using the 5 P's, which include people, products, place, price, and
promotion. Furthermore, our company has strategic regional strategies. (Strategic Goals and
Direction of McDonald, 2014). McDonald's track products and services regularly to ensure that they
only deliver consumers the latest and the most popular products. You continue to maintain as
industry leaders, so you carry out several separate market analysis studies regularly to continuously
analyse the company's best potential marketing plan. Each employee undertakes training to his
highly respected McDonald's employees and will obtain sufficient training during his or her career,
as well as excellent career development. (FAQS | McDonald's UK, 2021).
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Capacity management to reconcile capacity and demand?
Capacity Management is the way towards assess the product capacities required by the company for
meeting evolving product specifications. "Capacity" shall be the overall amount of work per
organization, under capacity preparation in each year. For any company, therefore, capacity
management is necessary to make operational decisions. The managers normally discriminate
between short, medium, and long-term decision-making inability. The capacity intensity of the
procedure is balanced inside the physical limit imposed by long-term decision capacity in the
context of short and medium period capacity planning. This is likewise known as overall planning
and control because the different kinds of output from an operation must be aggregated into one
figure. Operational managers in McDonald's restaurant must be capable of manufacturing food
products to quickly meet the demands of these products during busy days that is crucial to a fast-
food restaurant such as McDonalds. They must also ensure that there are enough ingredients
available for the preparation of foodstuffs, which are very important because the entire process of
food preparation can stop if an ingredient is short of one. (Operations Management Methods At
Mcdonalds Corporation Business Essay, 2018). The goal of McDonald’s is to offer a standard range
of products to fast, reliable customer support. "To be the world's best fast-food restaurant." It means
McDonald's Restaurants are the finest location where you can find your diners in a modern and
enjoyable setting, with easy and convenient service and food that you want, fresh and wholesome to
get where you want to go at inexpensive rates. McDonald's Corporate is the most important
business. The company will in future be the world's best fast-food chain with aims to surpass
competitors in periods of quality, service, sanitation, and consumer demand. McDonald's engages a
strategic demand development on the same market. The company's planned goals were identified:
guaranteeing steady progress, seamless customer care, retaining the reputation of a supplier of
consistency and effectiveness, developing employee skills on all levels, arranging an exchange of
experiences between departments in different countries, constantly improving the fast-food model,
promoting the creation of new misfortunes. McDonald's had to change his regular activities with
new social distancing policies in place across the UK and Ireland. The restaurants closed seating
areas and instead served Takeaway, Drive Through and McDelivery.
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Implementation of the four Ds by the McDonald’s restaurants?
The implementation of Direct, Design, Deliver, and Develop is explained by the status of the
organization as the main fast-food restaurant chain in the world is endorsed by the McDonald's
operations management (OM). The ten administrative management choices indicate the distinct
strategic operational fields, which should be arranged for highest effectiveness and performance.
The corporate organization of McDonald’s encompasses a wide variety of business needs, such as
strategic HRM and the expansion of the supply chain. McDonald's additionally must contend with
the effects of stiff rivalry along with businesses such as Subway, KFC, and Wendy's. McDonald's
goal is to offer low-cost goods in this strategic organizational management choice region. The
portion ranges and prices of their goods, therefore, are cantered on the very prevalent perceptions of
consumers. Any McDonald’s goods are, however, reduced to a minimum to make it to them extra
competitive. The technique and ability of McDonald’s concentrate on price-reduction efficacy that
advances the policies of the organization. The emphasis is on preserving process quality and ample
ability to satisfy business demands in the strategic decision field of operations management. The
production line method at McDonald's boosts efficiency and utilizing power. For this judgment area
in operational control, McDonald's applies practicality. The business strives to optimize the
efficiency of the product in limitations like expense and price caps. They employ a system for
assembly lines to ensure continuity in product quality. In this strategic judgment area of operation
management, coherence meets the consumer's needs for McDonald's and its brand. (GREGORY,
2017). McDonald's primary offering is ready to eat products, i.e., ready-to-eat meals made easily
from comfort foods and other new products. Simply add new recipes that could be popular, and stop
production, which has not risen in popularity, learn from the errors of others, and turn to new ideas
quickly. (For 7 years, Chicken McNuggets are checked before they became used in McDonald's
chain, for example) A radically new component of the policy replacing the long-lasting tradition of
thoroughly testing the product prior to its inclusiveness. After dinner, every restaurant of McDonald
knows what to do with the jar. The self-cleaning of trays helps service providers to save resources
and time on human effort. One of the restaurants in the United States has placed leaflets on the
tables, saying: "Take the tray with you. This helps us to keep costs down for you!”. In this mission,
the timing of the work to be carried out and the overall time for operation were determined. The
contact staff at this firm must represent one client within 3 minutes (2 minutes in line and 1 minute
at the counter). For the vehicle delivery in a business, the specifications are much stricter; the
customer's time in the car does not exceed 75 seconds between the first window (order) and the
third window (order receipt). The workers must be specific, enthusiastic, polite, smile, and thank
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customers at the same time. Checking McDonald's delivery times is part of the service efficiency
principle.
Performance objectives mean for the operation in McDonald’s?
McDonald's Operational methods and the essential role of their goals to meet consumer needs
contribute to success. There are five goals of performance:
Quality - Many customers opt for high-quality goods. Each enterprise needs to give its buyers with
error-free goods to reach a reasonable lead. The objective of uniformity refers to such operating
decisions and procedures for delivering a benefit the consumer needs. McDonald's provides several
high-quality natural items, including sandwiches, fruit, and vegetables. McDonalds’s trains its
employees to plan and produce meals based on strictly applied very detailed techniques, particularly
in the making and managing of raw and cooked food. The Ten-minute hold period of sandwiches
for instance ensures any consumer the maximum reliability and originality. If the goods are not sold
in ten minutes of planning, they are subsequently removed. McDonald’s complies with all
sanitation standards including hand washing.
Speed - It is around how long consumers expect their service company to maximize their product or
service availability if waiting times are held to a minimum. The service method at McDonald's is so
well-conceived that any consumer coming is served quickly. Burger and more set menu items have
been planned to be shipped to the company within 3-4 minutes. The team maintains that the order is
shipped to the client on schedule and through peak hours.
Dependability - A product or service must continuously be provided within an organization's
processes. McDonald's provides consumers with a more efficient food operation. Each of them has
unique positions allocated to skilled employees to produce their goods on time. Throughout
weekdays and weekends, McDonald's has obvious opening periods and items are still offered on the
set menu at each single moment of the day.
Flexibility - Refers to procedure elasticity and the improvement in the assortment of goods or
services making business extra customer-friendly. McDonald's would expand its variety of new
items as the customer likes to adapt. McDonald’s has a great deal of versatility for consumer needs.
It provides a balanced range of cultural menu items for both children and adults on the markets and
maximizes preference. McDonald’s requires a range of skilled employees such that they are
versatile. The job scheme between crew members is kept changing so that they can be agile enough
in their work.
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Cost - This means minimizing process costs, resulting in cheaper operation. The simplest method to
cut down rates is to focus on consumer needs, i.e., to comply with both the product design and
service productivity goals, to minimize processing and waste. Operations would be focused on
rectifying the service provided. McDonald’s method to cost savings is well planned. There is a
well-recognized cheap supply chain inside the restaurant. Food may as well be delivered at a
reduced rate, as the cost of unsold food does not consume it. As the result, that means lower
McDonald's prices.
"All organizational priorities are thus found to be related. When efficiency is increased, the prices
are decreased, time is improved, and flexibility in exchange. Thus, the other goals are explicitly
tackled by taking unique action for this reason in accordance with time reduction in the first place
as appropriate. A sequence of those steps would then boost all four organizational targets
simultaneously." (McDonalds' Operation Management, 2018)
Queue Management System
Clients dislike lines and standing in line is a huge problem. Long queues generate feelings of fear,
insecurity and exhaustion, fuel dissatisfaction and angry feelings and severely damage sales. Data
reveals that 80 to 90% of people choose to purchase a new store rather than wait for long periods.
Queue management systems will offer a robust approach for McDonald’s. This type of program
simplifies waiting times by measuring queue demand and informs checkout workers of the number
of clients waiting to use the facility. This program optimizes queue demand to make McDonald’s a
reliable customer flow management. They will do this to reliably calculate footfall, track wait times
and staff efficiency even for busy times via automated queue systems. The idea is for convenient
consumers to use a self-registration device that sends a note to employees. The app puts customers
in a "virtual queue" and sorts the winners to please the client, from the losers who treat your guests
like cattle. This system also prohibits consumers from leaving a shop by administering their needs.
This technology has seen to improve continuity of operation, track employee efficiency and
increase productivity. (Lee, 2021?)
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References
Business-standard.com. (2020). Mcdonald's Revenue Falls 30% As Covid-19 Lockdown Limits
Operations. [online] Available at:
<https://www.business-standard.com/article/international/mcdonald-s-revenue-falls-30-as-covid-
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%20operations%20management%20(OM,restaurant%20chain%20in%20the
%20world.&text=McDonald's%20global%20business%20entails%20a,HRM%20and%20supply
%20chain%20development.> [Accessed 24 January 2021].
Lee, H., (2021?). Using Queue Management System For Sales And Data | Qminder. [online]
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January 2021].
Mcdonalds.com. (2021?). FAQS | Mcdonald's UK. [online] Available at:
<https://www.mcdonalds.com/gb/en-gb/help/faq/18526-how-is-mcdonalds-improving-products-
and-services-training-employees-and-staying-competitive.html> [Accessed 17 January 2021].
MEYER, P., (2019). Mcdonald’S Mission Statement & Vision Statement (An Analysis) - Panmore
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statement-mission-statement-analysis> [Accessed 23 January 2021].
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<https://www.slideshare.net/akinyemioj/strategic-goals-and-direction-of-
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[Accessed 17 January 2021].
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<https://www.statista.com/topics/1444/mcdonalds/> [Accessed 17 January 2021].
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UKEssays.com. (2018). Mcdonalds' Operation Management. [online] Available at:
<https://www.ukessays.com/essays/marketing/over-view-of-mc-donalds-fast-food-company-
marketing-essay.php> [Accessed 21 January 2021].
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