Analysis of McDonald's Business, Management, and Global Strategies

This report provides an in-depth analysis of McDonald's business and management strategies. It identifies and explains the three levels of the organization, including their responsibilities and associated functional areas. The report also explores various leadership and management roles and styles adopted by McDonald's, referencing a case study to interpret the leadership approach. Furthermore, it examines the relevant effects of globalization on the organization and reviews two CSR responses adopted by McDonald's, with a focus on the company's mission to be a positive presence in the community and reduce its environmental impact. The analysis encompasses McDonald's organizational structure, comparing mechanistic versus organic and vertical versus horizontal structures, and highlights the importance of adapting to diverse cultural and political environments for global success, underlining McDonald's commitment to customer satisfaction and employee motivation.

Introduction to Business and Management
1 | P a g e

Contents
Introduction:...............................................................................................................................3
Identify and explain the 3 levels of an organisation and their responsibilities, including
associated functional areas.....................................................................................................4
Identify and explain the roles and styles of leadership and management from theoretical
perspective. With reference to the case-study / article, interpret the leadership and
management style adopted in the organisation......................................................................6
Explain relevant effects of globalisation facing the organisation..........................................8
Explain your understanding of CSR and review two responses adopted by the organisation
..............................................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12
2 | P a g e

Introduction:
McDonald has been a world renowned and valuable food brand for over a decade. The
company’s primary mission and vision is to becoming to be world’s best and fastest quick
service restaurant and formalising their beliefs into “People promise and People Vision”.
McDonald is one of the best leading restaurant chains in the world. They started their
business in year 1940 in San Bernardino, California. The Main Purpose of this report is to
understand and explore the main reason behind the appeal of their restaurant chain to the
customers. These reports also explore the 3 levels of McDonald’s Organisation level as well
as functions associated with them by analysing the case study provided. This report provides
the overview over the various roles and styles of management and leadership adopted by the
McDonald by taking the reference of the case study. This report also presents the impact of
globalisation that has been facing by the organisation and understands the two key of themes
CSR and Globalisation considered by management and leadership position.
3 | P a g e

Identify and explain the 3 levels of an organisation and their responsibilities, including
associated functional areas.
McDonald’s Organisational Structure was restructured in 1st July 2015 to improving the
global operations of the company globally. The Organisation Structure of MC Donald is
responsible for achieving the business objectives by the help of coordinating Organisational
components by help of a system. McDonald has a divisional form of Organisational
Structure. Every specific area has been handled by every division. The aim of this form of
organisational structure is to support organisational flexibility and helps in support autonomy.
Below we have analysed comparison between different forms of organisation structure for
understanding the organisation structure being followed up in McDonald’s
Mechanistic versus Organic Structures
Mechanistic structures are focusing on individual responsibility of employees and their
individual specialisation. While in Organic structure employees are working together and
focus on joint specialisation of their skills. In Mechanistic Structure Mechanisms are simple
and integrating and well defined hierarchy of authority while in Organic Structure
Mechanisms are complex and integrating among team and task forces (Lunenburg, 2012). In
Mechanistic generally communication are followed up in vertical form and decision is
centralised to one person of small team while in Organic Structure decentralisation authority
of controlling tasks is delegated and communication is lateral in nature. In Mechanistic
Structure rules are standardised and standard operating procedures are being used while in
organic structure coordination among teams through mutual adjustment and work process is
unpredictable in nature. Mechanistic Structure requires extensive written communication
while organic structure works on verbal communication. Mechanistic structure has informal
status and based on size of organisation while organic structure has informal status and based
on perceived brilliance (Lunenburg, 2012).
Vertical versus Horizontal Structures
Vertical Structured organisations have a long chain of management who are generally CEO
and top decision makers of the company and are delegating the authority to lower level
supervisors who are working on different chains of McDonald around the world globally
while Horizontal or flat structures don’t have any middle managers who are handling day to
4 | P a g e

day operation tasks and generally interact with front-line and clients on personal level.
McDonald is following up Vertical Structure because of their large Size and expanded almost
every corner of world globally (Kokemuller, 2017).
Functional versus Divisional or Network Structures
Functional Structure of organisation are not economical in nature as functions are not
repeated again and again while Divisional Organisational structure require repetition of
resources and are expensive in operation. Functional structure of organisation don’t have
autonomy of over the decisions of managers while in divisional form of organisation
structure managers can take decisions and are fully accountable for their decisions (Surbhi,
2016).
5 | P a g e

Identify and explain the roles and styles of leadership and management from theoretical
perspective. With reference to the case-study / article, interpret the leadership and
management style adopted in the organisation
The management style that has been adopted by McDonald is to develop innovative outlets
that are becoming fun place to work for McDonald. Leaders at McDonald are fostering
accountability for the roles of the employees and understands their corporate social
responsibility (CSR) toward the society and incorporates them in the business. McDonald is
following up the Adair’s Model of action – centric leadership model. In this type of model
leader inspires their co-workers and their peers with their own commitment, enthusiasm and
their ability to communicate along the line of business. Teams are created by team leaders so
that every team are focused towards the common task. Adair identifies three different
approaches of the leadership functionality are task accomplishment, team development and
identifying and fulfilment of individual needs of team members. As per Adair model Leaders
are not born but evolves from the challenging situations. As per Adair who has innate
characteristics to perform the primary objective of the organisation. Another approach of
Leadership style followed up by the McDonald is situational leadership theory where leaders
would mould themselves according to the demand of the situation (Rowley and McMurtrey,
2016). This type of theory has been a part of contingency theory of leadership that is giving
emphasise on following by employees. Situational Leadership Theory emphasises on the two
separate behaviours of human being in situations one is task behaviour and another is
relationship behaviour. The relationship behaviour are the ways of communication that is
used by the leader in one way, multi way or two way along with listening, supporting and
facilitating behaviour. This theory states that leaders are first selecting different types of
individual needs and then decide the process of management to control the particular
leadership as per the need. In McDonald the task behaviour of the managers promotes the
team work and seeking collaborative approach to deliver their best approach to the customers.
Leader ship at McDonald emerges from the primary focus of Jim skinner and has CEO of the
organisation from past thirty years. Jim skinner was seen as a excellent leader with
transformational and charismatic leadership situation (Rowley and McMurtrey, 2016). The
turnaround of the McDonald has been because of creative insight of Jim Skinner and his
ability to visualise the key innovative style of leadership. Skinner was the man behind the
improvement of store operations and man behind the initiative of pan to win initiative. He
6 | P a g e

implemented diverse range of strategies to keep his employees more motivated and more
committed toward there day to day responsibilities. Skinner has placed greater importance to
customer satisfaction. He always gave importance to customer and understood that customer
is king and McDonald should understand the needs of the customers.
7 | P a g e

Explain relevant effects of globalisation facing the organisation
In recent times corporations and enterprises are diversifying and expanding their business
reach globally. Globalisation is important and necessary for survival and success in the world
wide market. However it is not easy for McDonald to expansion in the global market and do
competition and made a successful business entity because of diverse cultutural and political
environment worldwide. When McDonald Polish market that focused on high operational
standards of efficiency, execution speed of tasks and strategies and aligned franchising.
McDonald sees Poland market to test and experiment innovative strategies. McDonald in
Poland gave employment to young generations and defines them future career growth
opportunities (McDonough, 2017). McDonald provides the young generation of Poland a
proper work and life balance and incorporates on them team culture along with fun at the
work. McDonald also earn the trust of the investors who are investing on their franchisee
based model and wins their trust. McDonald establishes transparency and trust among the
employees. McDonald also sequences the investment of the investors so that they can know
how much and when they need to investment as the franchisee became older (McDonough,
2017). Facing Competition in the global market is not easy for the McDonald and
simultaneously expanding their business. McDonald has taken into consideration key
important strategic decisions after consideration of external and internal factors. McDonald
has always focused on local level marketing as they entered new market globally like Poland.
As a part of their strategic planning McDonald has designed their menu as per the culture of
that region. Effective globalisation depends on the customisation of the decisions for each
country to be designed identically. Globalisation also gave an ample opportunity to the
employees to explore the different cultural environment globally. McDonald always believes
on running global marketing strategy for the employee’s recruitment and management of
restaurant business. McDonald has made a great success in term of globalisation. Their
restaurants has located in different parts of the world globally and present across 118
countries around the world and everyday serving approximately 50 million customers
worldwide. Globalisation has outreached beyond the economic field and producing a wide
spectrum of influence on the cultural, social, political, security and on the international
markets. Globalisation on McDonald has optimal allocation of resources and improves
efficiency along with reduction of costs. Globalization also formed an unified global market
and accelerated a free flow of production. Globalisation has reasonably allocated the labour,
8 | P a g e

markets, resources, products and technology. Another important aspect that has been seen
due to globalisation is that human civilisation has been boosted tremendously.
9 | P a g e

Explain your understanding of CSR and review two responses adopted by the
organisation
McDonald in Poland is serving approximately half million customer every day through their
more than 386 outlets in more 150 cities of Poland. McDonald is one of the largest private
employed in Poland giving job to 19000 employees (Setó-Pamies and Papaoikonomou ,
2016). They have started their Corporate Social responsibility movement in 1980 where
McDonald has fileed with number of lawsuits as for McLibel Case. The mission statement of
McDonald clearly states that they want to favourite among the customers and great place to
work for their employees. They want to being a positive presence among the community,
value their customers, known for service quality and hygiene and value their customers (Setó-
Pamies and Papaoikonomou , 2016). McDonald expects to reduce 150 million metric tons of
gas emissions for conservation of green environment. McDonald is doing its bit by
addressing the challenge of global climate change and reducing greenhouse gas emissions
from its stores across the world. McDonald work to care for the earth from past three decades
and established the partnership with Environmental Defence fund (EDF) for reduction of
waste and packaging. McDonald address the supply chain impacts on deforestation and
developed a commitment towards the development of forests. McDonald set there climate
strategy of deforestation for an estimated 15 percent global greenhouse gas emissions.
McDonald became the first company to establish a greenhouse based designed scientifically
to reduce green gas emissions. McDonald Helps in Operation of Hamburger University that is
unique people development institute. Various courses are being run across the university to
develop the people from part time staff workers up to the management of the university and
incorporate this culture in the system. McDonald has consistent business pattern to run the
business for their people around the world. McDonald incorporate social ethical values on
their system that has truly shows that the company has been fully dedicated for the
development of the people and the values are incorporated on their core system. McDonald
Uses an exclusive people Development System (PDS) to evaluate the peoples and improve
them for their career development and the mechanism is fully implemented on the chains
across all regions globally.
10 | P a g e

Conclusion
Globalisation promotes the evolution of corporate social responsibility globally by
McDonald. In one hand Globalisation of the McDonald further makes the organisations and
public recognise and understand the negative consequences by increasing in equality,
environmental unsustainability and labour exploitation. Business of Multinational
organisations has further deepened this trend of negative consequences. CSR is getting more
attention by the McDonald leadership team worldwide. Corporate Social responsibility is
seeking as a solution of the global issues such as protection of rights of the citizens and as
supplier of friendly work environment for their staff. Corporate Social and Globalisation by
McDonald make the government to concentrate more toward the welfare augmentation and
benefitting the society and also makes them recognise that economic development is the
result of combined consequence of moral, economic and social implications. This study
argues that consumers and governments are principal undertaker for CSR and Globalisation.
Companies are significant undertakers whom are responsible for incorporating moral issues,
environmental and social issues into their process of the decision making and encourages
rational responsible activities and behaviour that bring more profits for the stake holders in
the long run. In the Globalisation process the firms can maximise the efficiency and the
performance of firms by allocation of resources worldwide. The McDonald is facing fierce
competition beyond the country area and all the regions are planning to operate in future
globally. The competition is bringing more interests and value for the consumers but also
revisit on their concerns of decision making, environmental and ethical and social
obligations. Consumers recently became more aware and concerned towards the perception
of McDonald in their region and socially responsible behaviours for the social issues.
11 | P a g e

References
 McDonough, J., 2017. Changing tastes: Adam Pienkowski, CEO of McDonald’s Poland.
[Online] Available at: http://www.theceomagazine.com/business/adam-pienkowski/
[Accessed on: 23 May 2018]
 Neil Kokemuller, 2017. Vertical & Horizontal Organizational Structure
[Online] bizfluent. Available at: https://bizfluent.com/about-6561176-vertical-horizontal-
organizational-structure.html [Accessed on: 23 May 2018]
 Surubhi S, 2016. Difference Between Functional and Divisional Structure
[Online] keydifferences. Available at: https://keydifferences.com/difference-between-
functional-and-divisional-structure.html [Accessed on: 23 May 2018]
 Lunenburg, F.C., 2012. Mechanistic‒organic organizations‒an axiomatic theory:
authority based on bureaucracy or professional norms. International Journal of Scholarly
Academic Intellectual Diversity, 14(1), pp.1-7.
 Rowley, B., and McMurtrey, M.E., 2016. McDonald's and the Triple Bottom Line: A
Case Study of Corporate Sustainability. Journal of Strategic Innovation and
Sustainability, 11(1), p.33.
 Bruhn, S., 2013. Corporate Social Responsibility: A Case Study of Consumers’
Perception of McDonald’s Use of CSR in Relation to Image & Reputation.
 Crane, A., Matten, D. and Spence, L., 2013. Corporate social responsibility in a global
context.
 Crane, A., and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
 Glennie, M., and Lodhia, S., 2013. The influence of internal organisational factors on
corporate-community partnership agendas: an Australian case study. Meditari
Accountancy Research, 21(1), pp.52-67.
 Setó-Pamies, D., and Papaoikonomou, E., 2016. A multi-level perspective for the
integration of ethics, corporate social responsibility and sustainability (ECSRS) in
management education. Journal of Business Ethics, 136(3), pp.523-538.
12 | P a g e