Analysis of McDonald's Change Management and Leadership

This report provides a comprehensive analysis of McDonald's change management strategies, focusing on its adaptation to the Hong Kong market. It begins with an executive summary and introduction, setting the stage for an examination of the company's background, including the introduction of new products and flavors to cater to local preferences. The report uses the PESTEL framework to analyze the external factors influencing McDonald's, such as political, economic, social, technological, legal, and environmental considerations. Internal drivers are also discussed, highlighting how the company has adapted to market changes and customer demands. The report further explores Kurt Lewin's change model, discussing the stages of unfreezing, changing, and refreezing, and how these models have been applied within McDonald's. The report also includes recommendations on how McDonald's could have approached its changes differently and discusses the importance of training and development for employee skills. Overall, the report demonstrates how McDonald's has successfully navigated change, providing valuable insights into its leadership and strategic decision-making processes.

LEADING
ORGANIZATION
1

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................3
INTRODUCTION ..........................................................................................................................4
TASK ..............................................................................................................................................5
a) Focus on one area of change. Describe the situation before the change when describing the
background of the company. .................................................................................................5
b) Discuss the internal and external drivers that made the change necessary. ......................6
c) Explain what models of change were used and the result/s of the change. .......................8
d) As a senior management staff, what would you have done differently. Justify with reasons.
................................................................................................................................................9
RECOMMENDATION AND CONCLUSION.............................................................................11
REFERENCES..............................................................................................................................14
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EXECUTIVE SUMMARY
In the file MacDonald has been taken as an organization that has made various process of
its to be developed. Various aspects in MacDonald has become worlds popular fast food chain in
a way that it as developed its mechanism that made production to be improved. Also in this file
PESTEL is been done with various elements to be covered that has helped in making changes to
be done in effective manner possible. Also MacDonald made its improvisation on timely bases
which made it establish itself within the market possible. MacDonald is one of the most
successful organization. PESTEL analysis is the process by which various factors is been
covered that makes an organization attain control upon growth and development taking place of
the organization. This is one of the most trustable source that deals with macro factors existing in
an organization. In this various factors like political which deals over policies formed by
government is been studied with its impact. In economic factor all the elements related to
economics has to be talked about that makes various kinds of economic development to be made
within an organization. The social factor is there which talks about trends existing within an
organization. Also technological, legal and environmental factor is done which makes over all
developmental of organization possible. It makes machinery to be developed which makes
production to be faster an better. Further the file talks about a model that explain about various
elements which is related to development of organization possible. Also the model covers about
changes, freezing and refreezing stage of working is being talked about. These three models has
made the development of organization possible by making the change to be brought it in more
effective manner. Training and development explains about those skills require to be developed
within employees for efficiency in work.
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INTRODUCTION
Leading organization is that kind of organization that has been making progress in market
at very faster level. These organization is known for its various strategies that has been
organization to achieve its goals and objectives in more effective manner possible. An
organization is successful because of its various processes which makes it more productive
towards working upon achieving of tasks. In this lot of active process is there as the background
of the company explain about various kinds of policies, strategies, objectives, products, outlet
and management methods applied within it. Also the organization has used development and
improvisation over various process that has taken place during the course of time. Also
organization is the biggest food giant that has been existing all over the world. The organization
taken is MacDonald that is an USA based fast food giant having its headquarters in Chicago.
This paper uses the PESTLE analysis to evaluate the company’s internal factors, which help to
facilitate the creative of policies in areas such as pricing and marketing. The organization is
known for its uniqueness and standard quality products. It has captured market in more faster and
better manner. The organization has developed itself upon processes which makes organization
like MacDonald reach its customers in more efficient manner. Organization is known for selling
burgers and various other things in order to capture market. In this pestle analysis has been done
that cover all the factors impacting the organization from internal point. PESTEL analysis is the
tool that has been used in making all factors like politics, economic, social, technological ,
economical and legal factor is covered. These factors has been making all the policies and its
factors to be analysed, economic factor makes price to be decided over products to be sold by
organization. In this technological factors is there which makes process to be faster and more
accurate. Legal factors are there which makes laws to be followed by an organization for making
all its process to be done in more impactful way. Further in this, Kurt Lewin's model has been
explained which make an organization to make decisions in all aspects within an organization.
In this model organization is required to makes needs in order to apply changes that has to be
made. Then change has to be made in a organization that is done within its processes of an
organization. Also stages involve stability and constancy within an Nixonization to be
developed. Further in the file training and development for making employees develop more
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skills is discussed and monitoring is discussed which makes analysing of various process in an
organization that makes improvement or change to be brought. Research is to be done upon
various aspects covering in market that makes management develop strategies for making
progress developed. In the end recommendation is done about learning that is made out of
discussions. According to recommendation all the aspects in file is covered in this aiming focus
is over those unique satieties that has helped in bring changes in appropriate manner in an
organization.
TASK
a) Focus on one area of change. Describe the situation before the change when
describing the background of the company.
Change refers to the process of shifting from one situation to something else
different from existing one. The change can be in any manner such as change in
management, change in organization policy, strategy, objective, product, outlet,
marketing method, etc (Kerby, 2020I). The company Mc Donald's has entered Hong
Kong market by bringing a change in its product that is Mc Nuggets Chicken and Big
Mac Burgers along with offering foods in local flavour of country such as Twisty Pasta or
Local Milk Tea in its stores and restaurants. The main motto behind this change in Hong
Kong is to diversify company's product and offer products with local touch to the
potential buyers. Products such as Angus Burgers, D24 Durian Mc Flurry, Dips and
Shakes, etc. was brought by the companies. Before the change Mc Donald's were
operating in other countries with its base product that is pork and beef burgers and
generating its revenue through it. Although before change the company is well
established brand in market but the shift lead company to enjoy higher goodwill in terms
of respect given to the Hong Kong local culture by company. Mc Donald's entered into
Hong Kong in 1975 and before this the company was expanding its business in the
markets of Australia, Moscow,etc. and was increasing its sales by adopting their culture
in the product. The company was operating as Mc Cafe in Australia. The company was
experiencing a burger war with already established big giants such as Burger King,
KFC, etc. but came up with the products having price much lower then the competitors
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along with giving a diversification touch to its menu. The number of customers before
the change to the company was not so good due to the less population in the operating
areas which allowed the company to face customer chunk in the market.
Mc Donald's corporation deals in fast food having American chain being an
immense food chain in the market. The company is best known for its hamburgers in
the minds of its customers (Malek, and et.all., 2018). Maurice and Richard Mc Donald are
known as the father of the company who established their firm in the year 1948 and
established their first restaurant there. The brothers later opened their franchise in Des
Plaines, Illinois by April 1955. The company offers a wide range of fast food to its
customers in the form of patties and Burgers worldwide. They use to serve more than
63 billion products to their customers on daily basis. The world wide operations of Mc
Donald's includes outlets and restaurants in the regions of North America, South
America, Europe, Africa and Asia, such as Canada, Mexico, United States, Colombia,
Brazil, Chile, Austria, France, Georgia, South Africa, Morocco, Japan,India, Hong Kong,
etc. The company is enjoying its success through the efforts of more than 30 thousand
restaurants covering approx 100 countries and 6 continents. For Mc Donald's customers
satisfaction and values are always placed at priority hence keeps a quality track and
random inspection in its restaurants to maintain high and standardize quality in its
product.
b) Discuss the internal and external drivers that made the change necessary.
Internal and external factors are those which effects the business operations and profit.
Internal factors refers to the factors which occurs within the boundaries of the organization
whereas external factors are outside factors but effects the organization internally as well as
externally. PESTLE analysis is done in order to analyse the external factors which makes the
changes necessary. PESTLE in respect of Mc Donald's is done below:
PESTLE includes Political, Economical, Social, Technological, Legal and Environmental
factors.
 Political factor: In case of Mc Donald's important external political factors in fast food
restaurant chain industry environment are mentioned as follows:
1. Guidelines of Government regarding diet and health
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2. Rising international trade agreement
3. Including various policies related to public health
As political being a external factor is a threat as it put pressure on Mc Donald's, that has
been subject of criticism regarding the impact of their food items on health of consumer. Hence
emerging markets like Hong Kong Mc Donald's has scope for expansion.
 Economic factor: This factor has become important due to the reason of raw material
scarcity, pollution targets, performing business as sustainable and ethical company. As
large customers are demanding that the food items they are interested to buy are sourced
ethically and if it is possible than from a sustainable force. As there is no economic
stability exist so there is a need to make changes in business to survive in Hong Kong
competitive market. ( Colville, 2017).
In the country Hong Kong the purchasing power of people is high, the standards of living
of individuals are high so they can easily afford the costly products also. As McDonald offer
their food items at affordable prices so that local audience can easily purchase the items. Their
low pricing structure tends to leads business growth and survival because by offering their food
items at less cost as compare to their competitors , the brand can easily capture large market.
 Social factor: Mc Donald's is famous for adapting itself as per demand of consumer.
Initially the brand opened up their restaurant at different locations of the world. To bring
the sense of American way of life. In later years, the brand stated to serve in different
countries according to their local demand. In the country Hong Kong Mc Donald's is
giving a local touch to its products according to the preferences and acceptance of the
society.
 Technological factor: As technology consider as huge differentiating factors for Mc
Donald's success. With the help of advance tools like social media and digital marketing,
Mc Donald's can easily create loyal customers following that it is sure to translate large
number of customers. Using digital technologies will allow restaurant chain to develop
new method of ordering as well as for payments which increase convenience of
customers and boost sales. Mc Donald's in Hong Kong has initiated self ordering kiosks
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for its customers by using which the customers will experience flawless buying with
customization in their product.
 Legal factor: As Mc Donald's food safety standards & hygiene regulations are utmost
importance. As it operate their business in Hong Kong, it has to follow the rules and
regulations of nation. Hong Kong has relaxed regulations as it supports Mc Donald's to
expand its business in Hong Kong market.
 Environmental factor: Mc Donald's has opportunity to position its business as brand
that duly fulfil its corporate social responsibility. By making their operations, logistic and
supply chain more ecological sustainability than it can gain large audience that is sure to
identify with their sustainable practices.
Internal factors are those which arises inside the organization and does not afetc the
company at macro level rather hinders the performance at micro level. It includes employees,
Company's resources and internal technology, etc. (Nadim and Singh, 2019).
 Employees: As every individual has different set of personality traits, experiences
and backgrounds while company cannot control individual fully. As one bad hire
has the potential to negatively impact culture of the company.
 Resources and Technology: Lack of resources has negative affect in
culture of the company and create unsatisfactory work environment. By
providing appropriate resources , company can better support their
employees to complete their job more effectively.
c) Explain what models of change were used and the result/s of the change.
Change model refers to a pre defined structure which tells the management
about the core areas of change, the areas which needs to be consider, which needs to
ignore and which needs to postponed for future before commencing the change.
Models such as Kurt Lewin's change model is used in the change process of Mc
Donald's:
The model is also known as Kurt Lewin's Three stage of Model. Lewin says that
bringing a change for any company is a very difficult decision and is tough to implement.
He quoted that a change will be successful only when the organization will analyse or
follow three main steps that is Unfreezing, Change and Refreezing the change plan.
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 Unfreezing: This is the first stage which an organization needs to see before
applying change. In this stage an organization is required to analyse that the
change is compulsory to be taken place and also analysing the area which is
required to be changed. This will result in proper analysis of the need and
importance of change. If analysed properly then it will present a clear idea about
the plan in front of management.
Mc Donald's analysed the need of change in Hong Kong business as offering products
with local touch attracts more customers in the region.
 Change: This is the second in the row after unfreezing. The step involves the
real execution of the change plan which is being unfreeze earlier. The
management in this stage has a fear and experiences uncertainty. Here the
management grabs and understands the new scheme of doing things which is a
tedious task (Nugoho and Andrianto, 2020).
Mc Donald's entered Hong Kong and started selling Twisty pasta, Local Milk tea, MC
Nuggets Chicken burger into the market.
 Refreezing: This is the last stage in the change model. This stage involves the
change to make stable and consistent. The organization should refreeze the new
change and work accordingly, employees should not follow old policies of work in
the new change.
Mc Donald's has refreezes the change policy for long term and is stick in to the change
made in Hong Kong.
If any company is planning to bring change then it should apply Kurt Lewin Model
into practice. The model gives a clear idea about the stages of change which needs to
be considered very carefully by the organization. Following this model gives a positive
result to the companies in respect of change. In case of Mc Donald's the model is very
well appropriate and is giving success to the company as Mc Donald's is enjoying profits
from the sale of Burgers, Pasta and Tea in Hong Kong.
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d) As a senior management staff, what would you have done differently. Justify with
reasons.
Senior management staff includes the top level management of the organization
generally CEO, Directors, President, Vice-President, etc. who are involved in decision
making. The staff is responsible for making policies, setting objective, etc. for the middle
and lower level of employees. Being a Senior Management Staff, I will consider
following things in mind while and before bringing changes in the organization.
 Market Research: Market Research refers to a process of screening various
factors prevailing in the market which can influence and affect the business
decisions in the organization. It can be done by screening various factors such as
availability of raw material, market demand, potential customers, competitors
presence, etc. Mc Donald's wins over KFC and Burger king in various terms such
as revenue from franchise which is 0.8% more than its competitors, restaurant
chain growth, sales which is approx 6.6% higher then KFC and Burger King,
technological innovation brought by Mc Donald's is at much faster rate, market
expansion in many countries, etc. KFC and Burger king are almost half in size as
compared to Mc Donald's in market share hence is less expanded then Mc
Donald's. Availability of raw material includes research about how much raw
material is required in the product, is it easily available, the quality of material,
etc. Market demand analyses the ratio of demand for the particular product which
will be raised by the customers. Potential customer gives answer to various
questions such as who will be the buyers, their demographics will be analysed.
Competitors include firms that are already surviving and selling the same or
identical product in the market. If these things will be taken into consideration
then there will be presence of very low changes of getting failure or suffering
losses in the market. This research will present forecast in front of management
regarding the change which the company is planning to bring.
 Employees Training: This includes enhancing employees existing
competencies, skills, and potential in order to work more effectively and
efficiently with the application of better knowledge. Training in terms of customer
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greeting, product delivery, receiving payment, communication with customers,
etc. Mc Donald's trains its employees at each store so that they provide best
services to their customers with a token of respect and honour. I will pay my
concern on employees training in respect to give more knowledge about the
culture, train them to make familiar with the environment and way of operating,
training regarding the application of change, its impact and effect will be
described to the employees. The reason behind employees training is that they
are the one who will actually work upon it and will bring the change plan into
reality. The training is very crucial for the organization to do on its employees in
order to enhance their skills which is going to be reflect on the change. For the
change to be a successful step employees need to be updated with the things
hence training is required (Rosenbaum, More and Steane, 2018).
 Communication: Communication refers to the interaction or conversation done
with some person with the motive of either passing on information or sharing of
views or taking suggestion on some matter. Proper communication reduces or
removes the chances of miscommunication or scope of incomplete information. If
there will be a proper communication with the team who is actually going to work
upon the change then they will work effectively according to the plan which will
lead the changes in right direction and will not deviate from track. The reason
behind this is to give a proper path to the application of change and reducing
wastage of time on repetition basis.
 Monitoring: Once plan is made for the change it is very necessary to monitor the
actions and keep track of it. If there is a need to modify any step or plan in the
change process then it should be taken at a basic level because taking step at
advance or in processing then it may disturb the whole plan and can waste time
in reformulating the strategies and give a restart to the plan. In the changing
environment it is very necessary for the management to monitor its progress and
make certain changes if required. Constant monitoring will also help in analysing
the uncertain or undetermined problems which have the changes to occur at the
time to execution (Thakur and Mangla, 2019).
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If I will give time to these concerns prior to the time of bring the change then this
will provide a fair picture about the future of the change and if any modification is
required then it can be taken timely and will not hinder the plan in between.
RECOMMENDATION AND CONCLUSION
Mc Donald's being a established multinational giant planned to enter Hong Kong in the
year 1975 with its outlets and restaurants with the motive to earn higher profits. The company
analysed the market culture of Hong Kong society and founded that this existing products will
not provide much success in the market, hence need to bring something new or to develop some
change in the existing products. The market research has resulted that countrymen's are more
concern about their local culture so MC Donald's has came up with food which consists local
flavour in it. The management of Mc Donald's thought to local flavour in Local milk tea and
Twisty pasta. The company entered into the Hong Kong market with its products in local touch.
The products such as Mc Nuggets Chicken, local Milk Tea and Twisty Pasta, etc. has proven a
good decision for the company as it is accepted by the society and people. The company is
enjoying higher profits in the market and has decided to continue its operations in the market.
Slowly and gradually Mc Donald's has opened its outlets in various cities attracting the centre or
the busy market in the locality. As of now the company is having hundreds of branches operating
with the change which is giving profits to the company. Internal and external factors such as
employees, internal research and technology, political, legal, social, technological, economical
and environmental factors affects the company's position and performance in the market. Every
company needs to analyse these factors before entering into the international market as well as
before bringing any kind of change into existence. From the above report it can be said that if
any company who is planning to bring change needs to adopt any model of change which will
guide the company for the change to make it a success. In the present report Kurt Lewin model
of change has been considered which is best suited for the company Mc Donald's in order to
analyse and bring company's change into a profitable decision. The model includes three stages
that is starting from Unfreezing followed by Change and ends at Refreezing stage. Proper
adoption of this model will prove a victory for the organization especially when entering into the
new market with a change. It can also be said from the report that as a senior manager one needs
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to think for certain factors which can bring things differently into existence. If a management
looks for the proper market research, pays attention in providing training to its employees and
communicates the plan and action in an proper effective way then it will become easy for the
company to bring change into reality.
It can be recommended to Mc Donald's that company should continue the change of
Local milk Tea and Twisty Pasta into Hong Kong Market. Company should also add some of its
healthy items such as Egg Mc Muffins, Fruit and Maple oatmeal, Hamburgers,etc. in its menu
offering at Hong Kong in order to offer some nutritious food products to its buyers. Since the
concept is being accepted by the society and for the company it is a profitable decision so it
should refreeze its change idea. Mc Donald's if wishes to expand in the non operating areas then
it should do a proper market research and should study the country's culture in order to survive
successfully in the region. It is also recommended to the company that Mc Donald's should
educate and train its employees on regular basis in order to understand and work according to the
needs and demand of the customers. The company Mc Donald's should also educate and train its
employees in communication aspect as how to interact with customers, how to reply them,
communication way among their colleagues, in between and with other staff members,etc. In the
dynamic changing market environment it is very necessary for every company to have a proper
research and track on market conditions and applies the changes into its operations. The
company needs to monitor its process of change in order to avoid problems and wastage of time.
In the chain of fast food restaurants there is a huge fluctuation in customer preferences so Mc
Donald's should scan the market and enhance its employees existing skills to meet the customers
expectations.
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