Organization Behaviour | Mc Donald's | Case Study

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Organization Behaviour
Organization Behaviour
Name
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1.0 Introduction

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The main aim of the report seeks is to identify and analyze organizational issues that
McDonald Corporation has experienced while carrying out its operations in diverse regions
across the world. Besides, the report also recommends the appropriate solution that McDonald
should take in order to address the issue in future.
McDonald is a fast food Corporate that was founded as a restaurant in 1940 by Maurice
and Richard McDonald in California, USA. In 2018, McDonald Corporation moved its
headquarters to Chicago from Oak Brook, Illinois. Currently, McDonald is termed as the largest
restaurant chain in the world in terms of revenues. The restaurant operates in over 100 countries
across the world, has over 37855 outlets, serves over 69 million customers per day and
employees over 1.7 employees just second after Wal-Mart (McDonalds Corporation, 2019).
McDonald offers a variety of products such as chicken products, desserts, salads, French fries,
cheeseburgers, hamburgers, fruits among others. The corporate also generates revenues from
royalties, rent and franchisees fees. Currently, the organization is headed by Enrique Hernandez
Jr. who is the chairman and Chris Kempczinski who is a CEO and also the president.
2.0 Case Issues
The leadership of an organization is mandated to make strategic decisions and amend
policies to fits into the organizational structure and culture. In addition, leadership is also
expected to oversee an organizations performance. A research conducted by To, Herman and
Ashkanasy (2015 p.556) has revealed that lack of proper leadership in the context of
organizational behaviour results in poor working relationship and performance. McDonald
Corporation has experienced Leadership and motivation issues for the last few decades. The
company has been firing and recruiting its members of strategic management as a result of poor
performances in the market. With poor leadership, the manager has failed to oversee internal and

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external operations effectively and support employees towards the accomplishment of set
objectives, goals and organizational vision. Furthermore, it is due to the inappropriate leadership
that employees of the organization have experience low motivated to contribute significantly. In
2015, McDonald corporate was forced to fire Chief Executive Officer (CEO) Steve Easterbooks
as a result of abuse of office which led to a poor relationship with its employees. In addition, the
CEO was also accused of poor trading performance in the US. During the Easterbooks era, the
company also faced a crisis with its franchisee when the strategic management decided to
introduce All-day breakfast products in the US. Many franchisees were frustrated as wider menu
complicated restaurant operations. This led to some skilled and competent employees working
on the franchising resigning their operation. In addition, the employees of the company have
been conducting demonstrations as a result of poor leadership, low salaries, poor working
conditions and the company have faced several suits due to failure in Leadership.
3.0 Literature review
3.1 Leadership
Over the past decades, major organizations across the world have failed to make a great
impact in the markets as a result of poor leadership and management of resources. Silva (201,
p.1) defines the term leadership in the context of organizational behaviour as the ability of
managers to give directions to their employees in order for them to add value and achieve
missions of organizations. To, Herman and Ashkanasy (2015 p.543) stated that leadership is a
process which can influence the behaviour of others and direct the subordinated towards the
accomplishment of both long term and short-term goals. Therefore, organizations are mandated
to have leaders who can deal with various changes and deploy leadership approaches and models
which can accelerate performance in an organization. Leadership concepts and theories are

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commonly used by leaders to promote a performing organization. Recent researches conducted
by martin 2014 have shown that different organizations use diverse leadership approaches and
models due to various internal and external factors such as macro-environmental and resources
(physical, financial and human resources). The theories which are used in the leadership and
management context to address various leadership issues include trait theory, behavioural theory,
and transformation, situational and transactional theory. Ehrhart ( 2015 p.1)emphasizes that
understanding of the theories is essentials for leaders as they are able to strategize on how to lead
their followers at a particular changing environment
3.2 Performance and employee engagement
Based on the previous studies, there is a close relationship between the performance of an
organization and the way employees are committed. Miller (2016 p.1) defined the performance
of an organization as a transformation of the input into output to achieve a set goal and
objectives. A research conducted by Eisenbeiss, Van Knippenberg and Fahrbach 2015 p.635)
showed that organizations that had performed excellently for the last few years have enjoyed a
high degree of employee commitment and engagement. According to Dwivedi, Kaushik and
Luxmi (2014 p.77), there are various factors that determine the degree into which employees are
able to be committed and innovative in the organization. Effective reward systems, employee
relations and conducive working environment increased the ability of employees to be engaged
in the organization and focus on achieving the targets and objectives that an organization. This is
evident by a research conducted by Nazir, Shafi, Qun, Nazir and Tran (2016) on the “Influence
of organizational rewards on organizational commitment and turnover intentions ” that shows
that companies that provided employees with attractive compensation and reward packages