Cultural Change and Strategy Implementation at McDonald's: A Report

This report examines the cultural change implemented by McDonald's, analyzing the rationale behind the changes, the steps taken, and the challenges encountered. The report begins with an introduction that identifies the rationale behind the cultural change process, which includes declining sales, a deteriorating brand image, and customer concerns about food quality and health. It then outlines the key steps involved in the change process, focusing on Kotter's 8-step change management model. The report further discusses the challenges that threatened to derail the change process, such as employee resistance and the need for effective communication. Finally, the report assesses the end result of the change, determining whether the cultural shift was successful in improving the company's performance. The report includes an executive summary, literature review, and reflection report, along with illustrations and references to support the analysis. The report aims to provide insights into how McDonald's addressed its challenges and implemented strategies for improvement.

STRATEGY INTO ACTION

TABLE OF CONTENTS
PART A: CONSULTANCY REPORT...........................................................................................1
INTRODUCTION...........................................................................................................................1
Identifying the rationale behind the initiation of cultural change process.............................1
Outlining key steps which are involved in change process....................................................4
What challenges threatened to derail the change process......................................................6
What was the end result? Successful change or otherwise?...................................................7
CONCLUSION................................................................................................................................7
PART B LITERATURE REVIEW/EVIDENCE REVIEW............................................................7
Introduction............................................................................................................................7
Concept of Change management............................................................................................8
Factors leading to change.......................................................................................................9
Change flow-chart................................................................................................................10
Change management models................................................................................................11
PART C REFLECTION REPORT................................................................................................14
REFERENCES..............................................................................................................................17

EXECUTIVE SUMMARY
Each and every firm will have to bring some sort of significant changes within the
enterprise. They have to perform such activity with an aim to maintain their competitive position
in the market which is full of opportunities and threats. By complying with the given type of
activity, firm can perform significant improvement in the sales and profits. The main aim of this
assignment is to assess the major reason which initiates cultural change within the corporation.
The module prepare has the huge scope. This report can be used by different scholar and
researcher in order to pursue their study upon the change management related subject. In
addition to this, the given report can also be used by different business personnel who are
planning some changes within corporation in an effectual way. Here, with an aim to carry out the
given report assistance has been taken from the number of sources such as books, journals and
online articles etc. From the given report, it has been found out that in order to bring change firm
should take help from number of models. This is because, if not taken then in the given situation
it will become difficult for the enterprise with regard to implement the change in an effectual
way.

Illustration Index
Illustration 1: Strategy map..............................................................................................................3
Illustration 2: Kotter's 8 step change management model...............................................................4
Illustration 3: Flow-chart to introduce change...............................................................................10
Illustration 4: Kotter's 8 Step change model..................................................................................13

PART A: CONSULTANCY REPORT
INTRODUCTION
In order to mark an effective presence in today's competitive scenario, a manager of any
firm has to perform some kind of changes in its operation or in the working practices. This is
because, if firm will not perform itr then, there is a highest probability that corporation can lose
its brand image. For the purpose to carrying out the present report, McDonald is selected. It is
one of the famous fast food chain that faced certain problems and due to which it has brought
some significant changes in its culture. The firm is having a team of 420000 employees who
works with full dedication (McDonald, 2016). Being their internal consultant, I will give my
assistence regarding the changes which cited firm had brought in order to deal with the problems.
Furthermore, the report will also state the implications of proposed change in company's
operation.
Identifying the rationale behind the initiation of cultural change process
McDonald is one of the famous American fast food chain that has been giving its services
since 1940. Here, with an aim to satisfy the needs and demand of the buyers, outlets are making
all sort of efforts. For example, firm organizes training and development programs for their
employees which enables them to deliver high or best quality of services to the buyers in an
effective way. Thus, it is because of such type of practices only cited firm maintains the
satisfaction level of its buyers. Thereby, it gain benefits in terms of increased profits and sales.
But, it has been assessed that success comes with some kind of complications and
problems. Thus, the problem which the firm has been facing is affecting the whole operation of
the enterprise. The same type of condition was faced by the manager of McDonald in the year
1996. During the given year, cited firm had faced the issue of declining sales which had
continued till the year 2004. In addition to this, the company was continuously losing its brand
image in market that it has been establishing through rigorous efforts (Tyler, 2005). In addition
to this, during the given year, company was also losing its grip of being counted among the
category of world's favourite fast food destination. The declining brand image of the firm was
not the only problem which cited firm was facing. In accordance with the given context, it is
assessed that many customers of firm were also complaining about the quality of food which
corporation were offering. (Managing change at McDonald, 2016). The presence of given
problem was affecting satisfaction level of the buyer. This is because, it has been seen that in
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return of investing money, customers expects the high quality of services from the producers or
the firm to whom which it purchases goods and services. However, if they buyers will not
receive services which they are expecting at that time they feel highly demotivated and
dissatisfied. Furthermore, they will also develop a negative image of the firm in their mind.
Hence, it is essential for a firm that it should make efforts in terms of maintaining the
satisfaction level of its buyers in an effectual way (Reiss, 2012).
Furthermore, it has also being assessed that many buyers of McDonald are associating its
food with the problem of obesity. Here, in the given year only one of the customers of the firm
has filed a complaint upon the company’s food such as Big Mac and Happy Meal etc. In this
context, customers are complaining that the above mentioned food is ruining the health of
American buyers. The given thing had also impacted the brand image of enterprise in a negative
way.
It is the major reason behind firm's declining market share. . In this regard, in the year
2003 company had reported a loss of 343.8 million dollar. Moreover, the McDonald had also
faced the situation in which its loyal buyers had shifted to the products as being offered by the
competitors such as Wendy and Burger King. Overall, it can be said that the company had faced
number of problems prior to 2004. The above mentioned problems are the main rationale behind
bringing cultural change within McDonald.
Thus, with an aim to resolve the given problem manager of organization have taken
decisions in terms of performing several changes in the culture. In accordance with the given
context, it has been assessed that the firm has taken decision to restructure the whole process of
enterprise. This means that the enterprise will totally transform its food delivery and production
process (Nilakant and Ramnarayan, 2006). However, with an aim to perform the same, firm has
directed its focus upon four different aspects such as commitment, cost leadership, value and
innovation. With the use of given building blocks firm has planned for establishing its unique
and distinct image in market. Moreover, it is with the help of given aspects only manager of cited
corporation will be able to direct its efforts in terms of performing improvement in the affected
brand image in an effectual way.
With an aim to implement the strategy related to the restructuring, manager of McDonald
can take help from the strategy map. The detailed explanation of the same is depicted. They are:
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The strategy of McDonald will cover all the above given aspects of the company. With
respect to the financial aspect, efforts will be made by the manager to improve the economic
performance of the company in an effectual way. Here, the financial performance of McDonald
can be improved by making some kind of changes in the internal business process. From the
above mentioned case scenario, it is assessed that brand image of the company is impacting
because of its poor quality of food. However with an aim to improve the same, manager of cited
corporation can make use of varied food quality standards to check it. Here, with the help of
varied quality standards, significant improvement will be made in the quality of food which is
being offered by them (Anderson and Anderson, 2010).
In addition to this, the manager of this corporation will also have to run its restructuring
operation in the area of improving the organizational capacity. Here, the capacity of organization
can get improved through innovation and knowledge. In this context, it is analysed that many of
McDonald customers are linking their products with the obesity. Thus, in order to resolve the
given problem manager can perform some innovation in its existing product. In this regard, it can
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Illustration 1: Strategy map
(Source: Jørgensen, Owen and Neus, 2009)

launch healthy and new menu for their buyers. All the firm’s restructuring efforts will help in
maintaining the satisfaction level of their buyers. Due to this, cited firm can get benefits in the
form of increased profits and sales in an effectual way. Hence, it can be depicted that by
performing cultural change significant action towards the problem will be taken by firm (Carr
and Hancock, 2006).
Outlining key steps which are involved in change process
Generally, it has been seen that the manager faces resistance from the side of its
employees with regard to the any kind of changes that it brought within the corporation. It is
because, it's in human nature to give negative response to each stance or situation which incurs in
front of it (Diefenbach, 2007). The response will be same even if the employees knows that the
situation will tend to provide several benefits to them. Thus in order to bring change, manager
of the firm has to follow systematic and streamlined process. In this context, Kotter's 8 step
change management model identified which manager of McDonald can use for the purpose to
bring cultural change the detailed explanation about the same is depicted below:
 Creating an urgency of change: In order to bring change within the firm, at first
manager of that company will have to create urgency for specific type of change. This is
because, through creating an environment of urgency only the respective change can be
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Illustration 2: Kotter's 8 step change management model
(Source: Essers, Böhm and Contu, 2009)

brought within enterprise in a short period of time. With respect to the cultural change of
McDonald, urgency can be created by showcasing the sales figure of the organization and
its performance during that year. Through this way, fear can be develop among the
workers. Build the guiding team: After creating the urgency of change, in the next process
manager of McDonald should structure a guiding team. The main responsibility of this
team will be to provide guidance to the workers who are resisting towards the change
because of some fear. McDonald should also formulate a team in which top and middle
level manager are included. With the help of such team, motivation of McDonald’s
employees will be enhanced (Kotter's 8 step change management model, 2016). As a
result of it, change can be brought within the corporation in an effectual way. Get the vision right: In order to set the climate for cultural change, manager of
McDonald will have to set its vision. In this regard, it is essential for the cited firm that it
should develop vision for the specific type of change. This is because, by developing long
term goal manager of firm can set the direction of its workers towards the cultural
change. Thus, it is through given type of activity only the problem of declining sales and
profits of company will be resolved. Communication for buy in: The vision which McDonald had set with regard to cultural
change needs to be communicated by it, to all the employees who works within firm. It is
due to the fact that, if not communicated then for the manager it becomes difficult with
regard to brought changes within enterprises in a planned way. While communicating the
vision, manager must take views and opinions from the workers (Pardo-del-Val,
Martínez-Fuentes and Roig-Dobón, 2012). This will enable manager to implement the
significant change in a successful way. Enable action: In the given phase, manager of cited firm will work as per the vision
which it had made with respect to the cultural change. Here, in the given step efforts will
be taken by the manager of McDonald to reduce the resistance of workers towards the
change. This can be achieved by linking performance of employees with the reward. In
this context, here the firm should give reward to those workers who will accept the
cultural change who are incurring within the cited firm.
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 Create short term win: Here, manager must set some short term goal with an aim to see
its progress towards the change. With respect to McDonald cultural change, short term
goals can be improving quality of food and bringing healthy meal in market. Don't let up: The firm continues the efforts to attain goals and objectives of the enterprise
that leads to upset the motivation level of employees. As a result of it, they stop working
towards goals and objectives of the enterprise. Thus, with an aim to maintain the
motivation level of employees during the process of bringing change, manager of the firm
should arrange activity such as giving reward to workers.
 Make it stick: Finally, the change which firm is planning can become the part of firm's
culture. Here, in the given phase the employees of the cited firm will accept cultural
change. In this step, the problem which corporation is facing will be resolved (Rippin,
2005).
What challenges threatened to derail the change process
There are different type of challenges faced by the manager of McDonald when it take
the decision of bringing change within enterprise. The challenges tend to give a detailed cultural
change process of the corporation. Thus, in the given situation it becomes difficult for the firm to
take significant action towards the problem being faced by it. The detailed description regarding
the challenges are depicted below: Resistance from the side of top level management: In order to initiate any kind of change,
enterprise will require significant support from the side of top level management. This is
because, with the help of given department only, all the major decision regarding
restructuring will be taken by the McDonald. In addition to this, here with the assistance
of top level department, manager can obtain significant amount of funds which it will use
in order to perform the research and development activity. Not communicating the vision of change to the employees: It is being regarded as another
most crucial challenge which leads to derail the change management process. For
example, manager of McDonald has introduced two new healthy burgers in its existing
menu (Turley, 2006). However, the reason for including the same will not being
communicated by it to the respective employees. Furthermore, without communicating
the reason, firm is forcing the workers for attaining such training programs which leads to
raise their skill for preparing the healthy food. In the given circumstance, corporation
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will face resistance from the side of employees. As a result of it, the change which the
cited firm has planned become impossible to implement in an effectual way.
 Lack of presence of skilled employees: The change process of firm will also be derailed
when it does not possess the team of skilled employees. For example, manager of
McDonald has taken decision for improving the quality of products that are produced by
it. This objective can be fulfilled if the employees who are working within the
corporation have full knowledge regarding different food quality measures which it can
use in order to raise the quality of product. However, absence of given aspect will lead to
hamper the change management process (Schein, 2010).
What was the end result? Successful change or otherwise?
From the analysis, it is assessed that the cultural change has been successfully brought by
manager of the cited corporation. In addition to this, the given change has played very an
effective role in terms of improving the problem of enterprise in an effectual way. Furthermore,
brand image of the company has also improved because of the respective change. Overall, it can
be depicted that McDonald has gained positive benefits due to the cultural change.
CONCLUSION
It can be inferred from the above report that change is the demand of today's competitive
scenario. This is because, by performing significant alterations, manager of the firm can mark its
remarkable presence in the market which is highly competitive and effective. However, it is
necessary for the manager that he should make proper plan with regard to the change which
corporation is planning. It is because, if firm will not perform it then in the given circumstance it
will become very difficult for the firm with regard to brought any kind of change within
company in an effectual way.
PART B LITERATURE REVIEW/EVIDENCE REVIEW
Introduction
Change is a crucial and significant part of business operation. It helps the business unit in
creating an effective and huge impact on the growth and development of the business. It helps
the enterprise in shaping the business operations efficiently and effectively as per the market
demand. This section of the report will develop an in-depth secondary analysis of the concept of
change and the factors leading to change within the business unit. It will focus on the effective
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policies and regulations that the business have to take into account in order to implement the
required changes in order to attain effective results. This section of the study will develop a clear
and effective understanding about the facts and figures related to the issues of change
management within a business unit.
Concept of Change management
According to Nilakant and Ramnarayan (2006) change is one of the crucial and most
significant part of the business operation. It is a catalyst of organizational improvement and
strategic development but has a significant impact on the employees of the company. Change is
demanded within the business units due to either big or small factors. Cameron and Green (2012)
states that changes are easy to make but difficult to manage. This statement clearly reflects
significant factors and issues associated with change management and probability of the success.
The industrial reports of different industries depicted the fact that changes initiatives is crucial
for the success of the organization, fails 70% of the time. Thus managing and developing
changes within the business is significant and critical task for the business.
The researchers reveal that the level of changes is different for various business units.
The existence of so many definitions of the topic clearly reveals that it is a comprehensive term
used to describe change at both the individual and organizational level. The companies have to
adopt different measures and strategies in order to infuse effective management of changing
policies and measures within the company. The strategies and measures adopted by the
companies focuses on minimizing the adverse impact on change resistance. In words of Barratt-
Pugh, Bahn and Gakere (2013) introduction of change within the business creates and effective
impact on one or more of the following business sectors: Processes: This segment have a keen watch on the technical aspects of the business. It
affectively analyses the process and areas of operations the process here may relate to
operational process (converting raw material into goods) (sales, marketing finance etc.)
as well. Systems: The system is defined as a well-structured measure for carrying out different
business operations. This may change significantly to attain effective business outcome. Organizational structure: This relates to the overall impact of human resources. The
structure focuses on the distribution of roles and authority.
 Job roles: This focuses on the individual impact on employees.
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