Analysis: Environmental Impacts on Operations and Operational Strategy

This report provides a comprehensive analysis of the environmental impacts on McDonald's operations and operational strategy. It begins with an introduction to the significance of environmental factors on business decisions, using McDonald's as a case study. The main body explores the roles and responsibilities of operational managers, core operational activities, and their interrelation to add value. It examines the impact of current business environment trends, such as technology, ethics, and global relationships, on operations. The report delves into specific external and internal factors influencing the organization, including supply chain management, product design, and customer support. Furthermore, it assesses the implications of these factors on long-term strategic goals and how operations management can support these goals. The report concludes with a summary of key findings and implications for McDonald's operational strategy. It is a valuable resource for students seeking to understand business development and operational management.

Environmental impacts
on operations and
operational strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Roles and responsibilities of operational manager.................................................................1
Core operational activities within the organisation................................................................2
Interrelation of core operational activities of business and how this adds value to the
organisations operations.........................................................................................................4
Impact of current trends of business environment upon operations.......................................5
Analysis of specific external and internal factors influencing the organisation.....................6
Impact and implications of external and internal factors upon long term strategic goals of
organisation............................................................................................................................9
How operations management can support long term strategic goals...................................10
CONCLUSIONS............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Environment will have major impact on business and its operations (Azadegan and et.al.,
2013). There are various internal and external factors of environment which can have huge
influence on decision making and operation strategy of organisations. Operation management
play a crucial role in enhancing overall productivity and profitability of organisation. Chosen
company for this report is McDonald's. This company is one of the largest food chain company
in the world. This is an American fast food restaurant which was established in 1940 and founder
of this company are Richard and Maurice McDonald. It’s headquarter is located in Chicago, US
and it is providing its products and services all around the world. This report is going to cover
various roles and responsibilities of operational manger as well as core operational activities
which helps in successfully functioning of organisation. It includes various internal and external
factors which influence business and have impact on long term strategic goals of organisation.
MAIN BODY
For conducting this report company choose is McDonald's as it is one of the largest food
supply chain company at international level. This is the main reason for choosing this company
for this report. The main core functions of McDonald's is developing and manufacturing food
products, distributions, pricing, marketing, financing etc. McDonald's headquarter is located in
Chicago, US and its branches are located in different parts of the world. It is offering high
quality products to its customers and it has strong brand image.
Roles and responsibilities of operational manager
Operational manager play a very important role in effective and efficient function of
organisation. There are various roles and responsibilities of McDonald's operation manager
which leads to successfully functioning of business. Different roles and responsibilities of
operational manager is mention below.
Managing budgets: operational manager is responsible for effectively manage budgets of
department. Budgets can be consider as a key component which helps in smooth functioning of
department (Cai and Yang, 2014). Manager's role is to review all task and determine a less cost
effective way to complete the task. Operational manager is responsibility is to complete all
activities and functions of operation department within giving budget and cost effective way.
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Supervising supply chain and inventory: Managing and supervising supply chain and
inventory is one of the major role of operational manager. In order to increase productivity and
and profitability of McDonald's, operational manager have to manage its supply chain and
inventory. This will help in timely providing products and services of organisation to end
customers.
Managing inter-departmental communication: Operational manager's role in manage
inter-departmental communication for effectively and efficient functioning of operations.
Organisation can not achieve its goals and objective with one department and interrelationship
between different departments is important. So, manager have to communicate with other
departments of MacDonald such as human resource management, finance department, marketing
department and so on. This will help in creating strong relationship with other department and
meeting with quality standards.
Resolving customers issues: Solving and resolving conflicts of customers is a very
crucial role of manager. Operational manager is a person who is responsible for dealing with
various issues and problems of customer (Chen, Sohal and Prajogo, 2013). Their role is to
manage and resolve problems of customers related to products and quality of services. This role
of operational manager helps in developing strong relationship with customers and building
positive image of company.
Cost and assets management: Operational manager role is to effectively manage all cost
of and assets of department. Management of cost and assets is very important function of
organisation as it is very helpful in increasing productivity and profitability of organisation. By
managing assets and cost of department, all task and activities can be completed in better and
cost effective manner.
Core operational activities within the organisation
There are various activities of of operational department and these activities play a major
role in growth and development of organisation. Operational activities of McDonald's are related
to planning, forecasting, developing effective strategies, product designing, management of
supply chain as well as customer support. Core operational activities within organisation is
mention below. Planning: Planing is one of the basic function of organisation. Operational department of
McDonald's have to develop a proper plan regarding its activities and task. Planning will
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help in identifying what has to be done as well as assigning task to all employees (Hu and
Cho, 2014). Operational planning will leads to smooth functioning of activities and task
in order to achieve goals and objectives. Forecasting: Operational activities are majorly related to development of product which
will leads to satisfying needs and wants of customers. So forecasting activities will helps
in determining market requirement. This is very essential in developing products as per
demand of customers and full filling their requirements. Forecasting activities will leads
to analysing requirement of McDonald's product in market area as well as identifying
required modifications. Developing strategies: This function of operation management will help in developing
effective strategies for business growth. Development of strategies play a crucial role in
gaining competitive advantage over other rival companies. In this competitive
environment, operation department of McDonald's needs of develop strong strategies for
growth and development of business. Product designing: Product and services offered by McDonald's is an important function
of operational department (Kortmann and et.al., 2014). Operational activities is to
develop and produce a product which is new and innovative as well as up to needs and
wants of customers. Products designing play a important role in its sales. So its
operational activity to develop an effective design of product. Supply chain management: Management of supply chain of organisation is a function of
operational department. This is essential activities of operational department as it leads to
smooth flow of goods and services. Operational department activity is to convert raw
material into finished goods and supply chain includes process of transforming raw
materials into final goods. Quality management: This can be define as an activity of providing high quality goods
and services to end customers. It is a function of operation management to manage
quality to goods as well as offer high quality products to consumer. McDonald's have to
set high quality standards and operational department will have to manage that quality
standards as well as control quality of its products.
 Customer support: Core operational activity of business is to provide support to
customers (Mehleri and et.al., 2013). Operational department of McDonald's function is
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to solve issues of customer as well as resolve their quires. Providing support to customer
is significant in building strong relationship with customer.
Interrelation of core operational activities of business and how this adds value to the
organisations operations.
Organisations perform different activities internally as well as in external environment which
determine various targets to attain in their long run and make activities profitable. This can be
achieve by setting proper targets and performing activities to attain objectives. There are many
operational activities performed in an enterprise such as planning and organising activities
relating to finance, marketing, human resource development, sales and other operating
departments. These core operational activities perform together to achieve targets of organisation
and attain predetermined profitability ratio which can be defined as:
Finance and Marketing: In an enterprise both financial and marketing activities plays a
significant role to achieve desired targets and objectives of firm. Financial activities are
performed in an organisation to fulfil economic goals which includes transactions related to
buying and selling of raw materials or assets, maintenance of records or accounts and other
monetary related activities (Molina-Azorín and et.al., 2015). On the other hand, marketing
activities in operation are performed to maintain customer relation by advertising, product
development, analysing demand and supply of products or services at marketplace and various
activities involved. These both acts combine together to execute activities which results in
attainment of goals and objectives. Financial department perform acts to support and
commercialise marketing activities which enables firm to achieve their desired result. Marketing
and promotion relating to products and services of any enterprise can performed effectively only
when it is coordinated with financial actions, as without advertising and publicity there will be
no profits and improvement in sales and ultimately this will affect financial functions. Both
activities together can make possible for an organisation to attain their sustainability and
profitability targets.
Human resource and Operation: For effective and efficient working of all activities in
an organisation its important to have superior workforce which can help to attain its desired
objectives. Human resource department perform activities for development of workers and
employees working there which includes administration of their benefits, staffing, compensation,
health and safety by managing employee relations in an organisation. Whereas activities of
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operation department are responsible to manage process for creation of goods and services. This
involves planning, organizing, coordinating and controlling of all resources for efficient
production of company's goods and services. Both departments combine and perform activities
to attain their determined goals at their best level. Proper planning and coordinating activities
guides human resources or workers to perform well and create smooth functioning of production
department also (Piecyk and et.al., 2015). Operation department performs core activities with
help of humans and will guide organisations to accomplish their objectives.
Impact of current trends of business environment upon operations.
Current trends of business environment will have huge impact upon operations of
business. There are various new and emerging trends that will affect decision making and
working of McDonald's. These trends will influence working and management style of company
and it is have direct impact on productivity and profitability of organisation. Some of the major
current trends of business environment are technology, ethics and global relationship. Impact of
these trends on operation management of respective firm is mention below.
Technology: Changes in technology will have huge impact on business and its
operations. This is an external factor of business environment and this factor refers to new and
innovative technology (Piercy and Rich, 2015). Using of high technology in operations of
McDonald's will help in completion of task in effective and efficient manner. Advance
technology will have huge impact on business as it will leads to increase productivity and
profitability of organisation. Operation department can improve its functions and enhance its
productivity in order to achieve goals and objective.
Ethics: Ethical trends of business environment will affect decision making and working
process of operation department. Current ethical trends will have huge impact on operation
management and influence strategies of business. Ethics factor of business environment is
majorly related to choices of customer, business realities, sustainability as well as bringing new
opportunities. McDonald's have to manage its operation in a right and ethical manner by
following all rules and regulation set be government. Corporate social activities conducted by
organisation will help in developing strong relationship with customers and building positive
brand image in consumers mind.
Global relationship: For successfully functioning of business it is very important develop
strong global relationship. This will have huge impact on operation management of company as
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global relationship will affect strategies of business (Slack and Brandon-Jones, 2018). Global
relationship trends will help discovering new and creative working techniques as well as
adopting them in order to work effectively and efficiently.
Analysis of specific external and internal factors influencing the organisation.
There are various factors of business environment and these factors will influence
strategies and decision making of organisation. Business environment is divided into two major
category such as internal and external factors. In order to analyse the influence of internal factor
on business, it is important to conduct SWOT analysis. This will helps in identifying strengths,
weakness as well as opportunities or threats to business (Thompson, Strickland and Gamble,
2015). SWOT analysis of McDonald's is explained below in detail.
STRENGTHS WEAKNESSES
 It has established a strong brand name
through effective promotion and best
quality fast food.
 Its has huge number of loyal customers
who extremely like to visit restaurant
again and again.
 McDonald's is a brand which offers its
products and services according to
consumers choice, at reasonable value
and provides great services.
 It is promoting unhealthy food on menu
and facing negative publicity at
marketplace.
 McDonald's has a high employee
turnover rate which leads to more
money spent on training.
 Not coping with environment trends
such as customers are focused towards
organic foods which is declining its
sales.
OPPORTUNITIES THREATS
 It can explore more geographical
markets as fast food demand is
increasing around world.
 McDonald's can add some healthy and
organic food items to its menu which
can attract health conscious customers.
 It should focus on CSR policies and
start home delivery criteria at
 McDonald's is facing number of strong
competitors at marketplace such as
Burger King and KFC etc.
 There will be fast food market
saturation in developed countries which
can affect its overall sales and
profitability.
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McDonald's which will be effective
idea.
 Government is considering fast food
chains to regulate several laws against
it in relation to health purpose of
customers.
For analysing external business environment, company should use PESTEL analysis.
This is mention below.
Political: This factor includes different rules and legislations set by government. It is
very important to follow these rules and regulation for smooth functioning of McDonald's
organisation. Political factor consist of taxes, trade regulation, policies and so on. Stability of US
political party is beneficial for effectively working of organisation. So this can be consider as a
positive factor for respective organisation as political factor will affect business environment of
McDonald's in positive manner.
Economical: Economical factor is consist of growth rate, interest rate, exchange rate,
inflation and so on. US have one of the large economic growth rate in the world. This is factor
will be very beneficial for McDonald as growth rate of US market area is growing rapidly which
will help in development of business. McDonald's company will be benefited by this factor as it
will help in enhancing its sales and profitability. Continuous growth of economic conditions will
have positive influences of respective organisation.
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Social: This factor is focus on the social environment in which organisation is conducting
its business. Social factor includes cultural trends, attitude and behaviour of customer, family
demographics as well as educational level of organisation (Townsend, 2018). Morden lifestyle
and positive attitude of customers towards fast food in an opportunities for McDonald's. This
organisation is dealing in different parts of the world and society is developing positive attitude
towards fast food industry which can be consider as a opportunities for respective organisation.
McDonald's can use this as an advantage for its business and enhance overall
profitability(McDonald's uses AI for ordering at drive-throughs, 2019).
Technological: US has one of the advance technology in the world. Technological factor
refers to use of new and innovative technology in functioning of organisation. Advance
technology will leads to increase productivity and profitability of McDonald's as well as gain
competitive advantage over other rival companies. Technological factor play a crucial role in
conducting business operations in effective and efficient manner. This factor can be consider as
strength of McDonald's as it is using updated technology in its business process.
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Environment: Environmental factor includes climate, recycling procedure, ecological
system, sustainability and so on. Change in climate conditions in various areas or regions can be
consider as a threat to business of McDonald's. Increase in global warming and changes in
climate can be consider as a negative impact on business. It is a threat for McDonald's business
as it will affect it's business operations. Mcdonald's company is taking initiative to minimize use
of plastic material in its business operation. Banning of plastic straw will help in keeping
environment safe and clean.
Legal: This factor consist of various laws developed by government such as health and
safety law, equal opportunities, employment law, consumer rights, product safety etc.
McDonald's should follow all these laws as well as consider health and safety of employees or
customers. Strict rules and regulation of government is a disadvantage for business at it will
affect its production process as well as other functions of McDonald's.
Impact and implications of external and internal factors upon long term strategic goals of
organisation.
Internal and external factors will have huge impact on implication of long term strategies
goals of organisation. McDonald's long term strategic goal is to be best in fast food industry by
providing best products and services to customers (WangPalazoglu and El-Farra, 2015). In order
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to attain long term objective, company have to identify impact and implication of external and
internal factors. Competition: There are various companies which are dealing in same industry. Tools and
technique used by these companies will have direct impact upon long term strategic goals
of McDonald's. Company have to develop effective strategies which will help in gaining
competitive advantage over other rival companies. Organisational Culture: This is an internal factor which is one of the most important
factor of success of business. Organisational culture includes attitude of staff, working
style, process and so on. This will have impact on achieving set targets and goals of
business. Political and legal factor: This factor includes various rules or laws set by government
and political party related to health and safety of employees or customers, taxation
policies, trade rules and regulation and so on (Warnernd and Sullivan2017). Political and
legal factor will have major impact on implication of long term strategic goals of
McDonald's as support from government is very important in accomplish goals and
objectives of business.
 Human resource: Human resource is the most important asset of organisation. Effective
management of human resource or staff member is very important in developing and
implementing long term strategic goals. Employees of McDonald's will have huge impact
on strategic goals.
How operations management can support long term strategic goals.
Operation management is a function of organisation which deal with developing final
products from raw material. This function involves effective utilization of resources such as
staff, equipments, technology and other material of organisation. It leads to acquire and develop
products and services as per demand of customers. Operational department of McDonald's play a
significant role in successfully functioning of organisation as it support in achieving long term
strategic goals. Quality products: Operation management is responsible for developing high quality
products and services. By producing standardized products as well as offering high
quality services to customers, this function supports long term strategic goals of
McDonald's (Wilden and Gudergan, 2015). Operation management activities is to
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convert raw material into high quality finished goods in order offer best product and
services to customers. Satisfying customers: Satisfying customers need and wants is the ultimate goals and
objective of McDonald's organisation. In order to full fill requirement of customers,
operation department have to develop and design products as per needs of customers. By
offering products that satisfy customers demand and resolve their issues, operation
management can support long term strategic goals of respective company. Enhancing productivity and profitability: Effective functioning of operation
management is very important in productivity and profitability of organisation. Operation
management support long term strategic goals of McDonald's by enhancing productivity
and profitability of organisation. Operation management is responsible for effective and
efficient function of organisation in a cost effective manner. This will leads to
accomplishing of long term strategic goals of business.
CONCLUSIONS
From the above report it can be concluded that operation management is a very crucial
function of organisation. This function of business is responsible for effective and efficient
performance of business. Different activities of operational department will increase productivity
of company as well as roles and responsibilities of operational manger will significantly enhance
and develop business. It is important to analyse various factor of business environment as it will
leads to affect decision making and strategies of organisation. These factor will have impact on
long term strategic goals and operation management will provide support to goals of business.
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McDonald's UK restaurants are banning plastic straws. 2019. [Online]. Available
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McDonald's uses AI for ordering at drive-throughs. 2019. [Online]. Available
through:<https://www.bbc.com/news/technology-49664633>.
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