Contemporary Management Issues in the 21st Century: McDonald's AI

This case study examines contemporary management issues in the context of McDonald's and the integration of Artificial Intelligence (AI). The report explores the four building blocks of strategy (conceding, confronting, competition, and cooperating) and HR theory (recruit and staff, develop and grow, monitor and evaluate, and reward), as applied by McDonald's. It critically evaluates the role and impact of AI on McDonald's overall business strategy, including task and process optimization, enhanced productivity, faster decision-making, and consumer preference prediction. The study also addresses AI's impact on workforce management. The case study provides arguments for McDonald's leadership in the AI era, highlighting automated drive-thrus and order prediction. The conclusion summarizes the impact of AI in business and offers references to support the analysis.

Contemporary
Management Issues in the
21st Century Case Study

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................4
Four building blocks of strategy-................................................................................................4
Four building blocks of HR theory-............................................................................................5
critically evaluate the role and impact of Artificial Intelligence on the overall business
strategy and the management of workforces in organisations within a global environment......6
McDonald’s- Can a Behemoth Lead in the era of Artificial Intelligence?................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Contemporary management refers to the modern process that assist in overviewing the
business and also indulge activities like planning, decision-making and also monitoring. The
issues in context to this can be decrease performance levels, hiring of skilled employees, poor
communication, poor team work and difficult employees and also the time management. The
term Artificial intelligence used in this report in context to McDonald’s refers to the systems or
the machines that clones the intelligence of human for performing certain task and sequentially
improves themselves on the basis of information collected(Crawford, 2021). The first
McDonald's was opened in San Bernardino, California in 1940. It is the worlds second largest
restaurant company by revenue and its largest food chain with more than 39000 locations in 119
countries. The report will cover the four building blocks of strategy and also the HR theory.
Further it will cover the critical evaluation of the role of Artificial intelligence on the overall
business strategy and also on the management of the workforces in organisation. Further the
view of arguments will be depicted for the McDonald’s in the era of Artificial intelligence.
TASK
Four building blocks of strategy-
Strategy is the combination of the actions which the entity undertakes in order to survive and
thrive in the face of change, uncertainty, risk and opposition. These blocks are considered very
important for any company to confront the opposition and also the obstacles of any kind. The
strategy is to be build in a way that will leverage the strength and reduce the vulnerabilities. The
McDonald's use these four options with their potential benefits and cost and also consider the
possible consequences that might occur.
 Conceding- Most of the company adopt this strategy with the aim to fight against the
competitors and develop the negotiation game in order to create the more constructive
and friendly playing field. McDonald's which is the good chain industry deals in variety
of products and deals with various parties in order to run the operations successfully
adopts this in order to convince the other party to sign the deal, overall this provides the
information of the parties with whom the dealings are made.
 Confronting- this strategy refers to the action takes towards the rivals in order to solve
the dispute or with the aim of achieving the objectives. Although the term confronting is

always seen in negative context. The adoption of confronting strategy made by
McDonald's for the positive sense that is it respect what others think an allow them to
explain the thought process of the other party so this helps the company make positive
relationships with them. This helps the McDonald's to grow in its operations and be a
leader in the industry.
 Competition- this refers to the actions taken by the competitors indirectly that let third
party to decide certain things with the competitive perspective. Among all the
competitors standing against the McDonald's it has a competitive advantage with respect
to the speed of customer service that it offers without compromising the service
quality(Goralski and Tan, 2020). With this strategy McDonald's outperform its
competitors in order to retain in industry for a longer period.
 Cooperating- this refers to the combing of two or more firms or the parties that work for
the achievement of common objective. These strategies help McDonald's in forming the
strategic alliance through which it scales up its position in the market. Through these
strategies it also develops new products like the initiation of the breakfast schedule in the
menu for the students has helped in competing well with the opponents.
Four building blocks of HR theory-
HR plays an important role in any organisation as it provides the important asset to it in the form
of employees. The running and maintaining of operations of business is in the hand of employee
itself whether overlooked by the leaders but handled by them. The four building block of HR
theory of McDonald's are-
1. Recruit and staff- with this HR of company aims to set and hire the people with right
skills set that fulfil the needs of team. The multidisciplinary teams of McDonald's works
on daily basis which is filled with required competencies and attitude. As the company
needs more flexibility, company believes that its system is rigid which needs to be
changed which wants less specialised job descriptions. McDonald's follows sustainable
skill based job model through which it maintains the connection among the job and
person associated with it by rewarding, grading and providing them with the best career
opportunities.
2. Develop and growth- it is the responsibility of the HR to grow and develop the company
in order to stand among the top most companies of the industry and also make the

growth which helps in outperforming the competitors. Seeing the current scenario the
way in which teams work are changing in order to adopt the adaptability. The HR
practices are becoming mature in strengthening the collaboration with the teams.
Therefore the HR practices of McDonald's facilitates the programs with respect to the
continuous learnings, the communities for the practice and also the external collaboration
for knowledge development.
3. Monitor and evaluate- in order to perform well and measure the progress, these two
sections are important to be considered. This will continuous feedback, value based
targets and also the strategically aligned evaluation(Kutaula, Gillani and Budhwar, 2020).
McDonald's in this context takes feedback from its peers and others in order to stimulate
the double loop learning and also enabling the personal growth. For company team
performance is also important as part of the evaluation process similar to personal
contribution to the team performance.
4. Reward- this strategy is extremely important in order to make employees work towards
the achievement of objectives of company and take out the maximum productive output.
McDonald's has implemented the flexible rewarding system in which it has introduced
its own rewards systems that depends upon the performance of the team.
critically evaluate the role and impact of Artificial Intelligence on the overall business
strategy and the management of workforces in organisations within a global
environment
The term artificial intelligence has the affection of human intelligence processes by the machines
most importantly the computer systems.
The role and impact of artificial intelligence on the business strategy-
It has been seen that AI has reformed the business strategies to the next level. It made the
realization that artificial intelligence is significant for the expansion of the business(Li, Bonn and
Ye, 2019). The role played by artificial intelligence in the overall business strategy of the
McDonald's-
 It has helped in saving the unnecessary expenses to incur with the help of task and
process optimisation
 the enhancement of the productivity level and also the operational efficiencies

 with the use of cognitive technologies, faster decisions can be make
 the installation of AI systems correctly, human error and mistakes can be avoided.
 The preferences of consumer can be predicted easily and also the personalised experience
is offered.
 By identification and maximisation of the sales opportunities, revenue is increasing day
by day
The role and impact of artificial intelligence on the workforce management-
In order to achieve the maximum efficiency in workforce management, is the outcome of in
depth understanding of the required skills and set of behaviour from the employees. For
McDonald's this task does not become challenging to the extent that for the competitors. This
happen due to the use of traditional methods by the opponents(O’Cass and Wetzels, 2018).
McDonald make use of the artificial intelligence for the management of workforce that employs
machine learning and also the capabilities which makes the processing of data quick and make
the intelligent decisions on time.
McDonald’s- Can a Behemoth Lead in the era of Artificial Intelligence?
Yes, McDonald's a behemoth lead in the era of artificial intelligence. This argument can be
proved through two cases that were considered unique by the company.
 Automated Drive Thrus- McDonald's has acquired the expertise with respect to the
machine learning and processing through its 2019 acquisition of Apprente, which the
chain has applied to its automated order taking initiatives. This includes express pick up
and enhancing of order and payment functions
 Order prediction- McDonald's uses the machine learning based decision technology for
the purpose of prediction in context to menu offerings which in return more likely to
drive the sales(Walsh, 2022). The adding of dynamic machine learning driven solution to
various location in 2018 presented the products in more unique way. The menu was
updated and displayed on the basis of the time, currents orders, current restaurant traffic,
popularity of the menu items and also the weather conditions.
CONCLUSION
It was concluded from the report has the era is changing of the business with more use of
artificial intelligence in various sectors. The report overviewed the four building blocks of both

the strategy and human resource theory. The report displayed the role and impact of artificial
intelligence in the McDonald's and also the impact on its workforce management. The argument
provided is justified with the reasoning.

REFERENCES
Books and Journals
Crawford, K., 2021. The atlas of AI: Power, politics, and the planetary costs of artificial
intelligence. Yale University Press.
Goralski, M.A. and Tan, T.K., 2020. Artificial intelligence and sustainable development. The
International Journal of Management Education, 18(1), p.100330.
Kutaula, S., Gillani, A. and Budhwar, P.S., 2020. An analysis of employment relationships in
Asia using psychological contract theory: A review and research agenda. Human Resource
Management Review, 30(4), p.100707.
Li, J.J., Bonn, M.A. and Ye, B.H., 2019. Hotel employee's artificial intelligence and robotics
awareness and its impact on turnover intention: The moderating roles of perceived organizational
support and competitive psychological climate. Tourism Management, 73, pp.172-181.
O’Cass, A. and Wetzels, M., 2018. Contemporary issues and critical challenges on innovation in
services. Journal of Product Innovation Management, 35(5), pp.674-681.
Walsh, C.T., 2022. Covalent Catalytic Strategies for Enzymes That Modify RNA Molecules on
their Tripartite Building Blocks. ACS Chemical Biology.