Analyzing Contemporary Management Issues at McDonalds: A Report

This report provides a comprehensive analysis of contemporary management issues faced by McDonald's, a global fast-food chain. It begins with an organizational description, followed by an examination of major risks and opportunities related to changing consumer preferences and environmental factors. The report delves into McDonald's business model and managerial techniques, exploring driving forces for change and employee responses, and highlighting the necessary skills for change agents and managers. It discusses organizational structure, cultural, structural, and technological factors, as well as human resources considerations. The report further explores principles of project management, setting vision and mission statements, assigning roles and responsibilities, and strategy implementation, with an emphasis on principal products and organizational arrangement. It concludes with a discussion of measurement and evaluation, and CSR protocols.

Running Head: MANAGEMENT 1
Contemporary Issues in Management:
McDonalds

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Table of Contents
Introduction......................................................................................................................................3
Organizational Description..............................................................................................................3
Major risks and Opportunities.........................................................................................................4
Risks.............................................................................................................................................4
Opportunities................................................................................................................................5
Business Model and Managerial Techniques..................................................................................6
Driving forces for change and employee response..........................................................................7
Skills for Change Agents/Managers................................................................................................7
Organizational Structure..................................................................................................................8
Cultural Factors............................................................................................................................9
Structural Factors.........................................................................................................................9
Technological Factors................................................................................................................10
Human Resources......................................................................................................................10
Principles of Project Management.................................................................................................10
Setting vision and mission statement.........................................................................................11
Assigning Roles and Responsibilities........................................................................................11
Strategy Implementation............................................................................................................11
Emphasis on Principal products.................................................................................................12
Organization Arrangement.........................................................................................................12
Measurement and Evaluation.....................................................................................................13
CSR Protocols................................................................................................................................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................15

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Introduction
Today, every company makes several efforts to interact with maximum population all over the
world. The companies are going through different innovative practices that have altered the
living styles of people. The firms require making changes in the systems and processes with the
consideration of changes in environment and preferences and demands of consumers. Changes in
environment and customer preferences are the major threats for a firm to achieve growth in
present and success in future. The given case study states that McDonalds is facing some
problems, as there is change in customer demands and environment. For managing the above-
mentioned issues, company is attempting to adopt various approaches and making changes in its
systems and policies.
There are some risks and opportunities for McDonalds, which are included in the below report.
These risks and opportunities are associated with the innovative practices and process of change
at organization. Furthermore, it includes many driving forces for the making changes at
McDonalds. Under change implementation process, there may be two situations, i.e. change
acceptance or resistance by the employees. The report suggests some specific skills and abilities,
which should be employed by change agents and managers to maintain the innovative business
environment. In addition, it includes some approaches and principles of CSR protocols and
project management that can be processed by the case study organization to improve its
processes and systems.
Organizational Description
McDonalds is an American restaurant chain, which offers hamburgers and other fast food
products. Founded in 1940 by Maurice and Richard McDonalds, the company is now known as
one of the biggest fast food outlets in the world. Currently, McDonalds is the largest food chain
that is catering more than 70 million people regularly in over 100 countries. The major food
products of the organization are, such as; burgers, soft drinks, milkshakes, French fries, chicken
etc. As of 2016, it owns around 36900 outlets, where it has employed more than 1.5 million
employees, who are working for the franchises of McDonalds. At the end of 2016, the revenues

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of company are US$24.622 billion, which are generated from royalties, rent, fees paid by
franchises and sales, which are produced by its fast food outlets (McDonalds, 2010). Under its
promotion process, the organization is going through various advertising and promotional
activities, which assist it in attracting maximum customers towards its food products, for
example McDonalds is providing some specific food products and combo-pack offers.
Major risks and Opportunities
This is true that changes in the environment can be either a challenge or opportunity for the
company and its employees. The organization should be continuously aware about not only the
internal factors but also external factors, which are impacting its business operations and growth.
If an organization implements changes in its systems, then there will always be some associated
risks and opportunities. The firm may confront some conflicts in the ways of changes before and
after implementation process. It can adopt the changes and innovative practices for carrying
growth in its revenues and profits (Armstrong & Taylor, 2014). These conflicts can cause issues
to the organization, so it needs to make efforts to resolve these issues to overcome the barriers in
adopting new organizational structure and management process.
The given case study states that the Board of Directors at McDonalds is making changes and
adopting some innovative practices to handle the changes in the environment and demands and
preferences of customers. The case includes that preferences and taste of the people are altering
for fast food because they are becoming more health conscious and prefer to eat quality and
healthy food (Barclay & Osei-Bryson, 2015). Due to this, the customers are switching to the
competitors, who are able to serve their demands and these players are covering a significant
market share over McDonalds. To deal with these changes, the company is planning to make
changes and executing innovations in organizational processes. These new practices may cause
both risks and opportunities for McDonalds, which are given below;
Risks
As per the given case study, McDonalds is making changes in its existing processes and
operations (Bartunek, 2014). Before change implementation, it needs to take the opinions and
consent of its external and internal stakeholders, like; shareholders, employees, customers,

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suppliers etc. If it will not involve them in the process, it can cause risks and challenges for
McDonalds. The organization will face the risks associated to change resistance from
stakeholders as they will not accept the changes easily. When McDonalds will implement the
changes, there will be two kinds of employees, i.e. employees will accept the changes and others
will not accept and agree with the executed changes. This type of employees would not accept
new innovation and changes in organizational and management structure. This situation may
worsen the change implementation process in the company (Bhasin, 2016). In addition, there
may be a situation that staff will not understand the reason behind changes and they may not
trust the senior management that is actively engaged in change implementation process.
Moreover, there may be a risk in getting an appropriate staff for bringing change in the processes
and systems that will be responsible for making required changes in allied divisions. Along with
this, the company may confront the risk related to strategic implementation of change that can be
daunting for entire team of McDonalds Management. Operational interference is one of the
major challenges, under which its existing business operations and activities will be influenced
by the change adoption. Apart from these risks, another risk is that the new systems and
processes will not work in the benefits of the organization and take it to the worst situation than
prior (Beketi, Epstein & Yuthas, 2008).
Opportunities
Along with these risks and opportunities, this organization may have several opportunities by
implementation of innovative practices and changes in its business operations. For this process,
the company needs to develop an advertising and marketing plan, which will assist the
organization in establishing its brand image and reputation among people and their society. It
will help McDonalds in launching this new segment of healthy and quality food items that is
primary reason behind its innovative practices (Benn, Dunphy & Griffiths, 2014). It will have the
opportunity to diversify its products in dietary and healthy food division. Under this new section,
it will produce the products by adopting a process, which will focus on the people, who are
dealing with different health issues, such as; obesity, stomach problems in youth and make them
aware about healthy intakes.
Implementation of change process will enable McDonalds to advertise its fast food and new
healthy products, which are cooked with low fat and healthier ingredients for entire population.

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This can assist the firm in establishing string brand image among its customers and making them
aware about its healthier food products than currently offering fast food. In addition, it will
include introduction of healthy drinks and fruit shakes with breakfast (Cummings & Worley,
2014). These products will be sold at all the stores of McDonalds. Furthermore, these
innovations and changes will offer a major opportunity to the organization to get a maximum
customer base and considerable market share in the fast food industry. By these changes,
McDonalds will be able to introduce new franchises of food worldwide (Dunlap & Brulle, 2015).
Business Model and Managerial Techniques
Adopting new business model and managerial techniques will assist McDonalds in managing
above-written opportunities and challenges. This new business model o organization will include
various innovative processes and practices. Under this process, the company can implement the
innovation by processing two types of factors, one is innovation on the basis of technology and
another is innovation on the basis of demand (Godsmark, Garvey & Dismore, 2011). The major
innovations at McDonalds will be executed by understanding the demand based method than
technology based method. To drive the changes at organization, the company needs to go under a
research and development process, which will be implemented by the organization and make
emphasis on managing the research and development procedure.
Managerial techniques are the techniques, which are used to motivate the employees and
establish productive workplace. At McDonalds, these managerial techniques will assist the
company in implementing innovative practices and creating balance between opportunities and
risks, related to change process. In addition to R&D, it can combine the knowledge and work,
which will assist in introducing new products and services and execute new systems in an
effective manner (Jaulus, 2017). To overcome the employee change resistance, the top
management will make the employees engaged in change process and establish a training
program. This training program will enable the employees and staff to comprehend these
innovative practices and new progressions in organizational environment. In this way, these
managerial techniques and model will help the entity in the management of related risks.

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Driving forces for change and employee response
When an organization plans to implement the change in its processes and systems, there will
always be some forces, which drive these changes. These driving forces are the major factors
behind change implementation process at McDonalds. Increasing social and cultural issues and
altering attitudes and lifestyles are most powerful forces, which are driving changes at this
organization (Jones & George, 2015). The major issue is that the customers are becoming more
conscious towards their health; it is working as a major force to the need for change. There are
some issues because of changes in the external environment and are faced by McDonalds. It is
one of the well-established fast food restaurants and it is usually regarded as unhealthy food and
increasing fat and obesity.
In addition to these forces, competition is one of the major factors that direct the firm to
implement new and innovative practices in the organization (Kerzner, 2013). McDonalds has
various competitors, who have already introduced the healthier food and product category of low
fat and healthy food. These competitors are meeting with the demands and needs of their
potential customers. Thus, the demographic and market trends are the major reasons, which are
forcing the organization to implement the change at McDonalds.
In change implementation process, this company may face different kinds of responses from its
employees (Kotler, et al, 2016). At McDonalds, it is very important to consider the responses
from employees. The management team at McDonalds will experience that some of its
employees will accept the changes and they will support the management in the implementation
of this healthy food segment.
Apart from these positive responses, McDonalds may face some adverse responses from its
people because the change execution process can be resisted by them. These people will fight
against these changes as they have insecurity and fear that their company is going in wrong
direction and against them. At McDonalds, it may be possible that organizational culture and
structure will not aid the innovation. In addition, it may have the employees, who will not react
towards the change and they will stay neutral (Leach, 2014).
Skills for Change Agents/Managers

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In change implementation process, change agents play an important role, as they transform the
business processes by enhancing its current practices. The change agents should possess some
skills and abilities to maintain competitive environment. McDonalds is executing changes in its
operations, so that it should appoint the change agents, who have some specific and required
skills (Mariana, Daniela & Nadina, 2013). There are some specific skills and abilities, which
should be possessed by change agents at McDonalds, like; skills to develop interpersonal
communication, team skills and effective communication skills.
These change managers must be able to establish an effective communication among the team,
which is created for change implementation process. These people should be able to manage the
state of resistance to change. Moreover, change agents should have skills to work under pressure
and operate the change process with instability and uncertainty. Employee engagement plays a
significant role in change implementation process, so these change managers should employ the
abilities to make the employees engaged (McKay, Kuntz & Näswall, 2013). It will enhance their
motivation and take them to higher morale. According to given case study, McDonalds is
launching a new product category of dietary and healthy food products, so these people should
have the skills to create a well-organized and well-disciplined procedure. It is introducing the
products to become healthy, so change managers can explain the employees by stating their
instances.
Organizational Structure
For successfully adoption of innovation and changes at this organization, it needs to modify or
improve its organizational structure that will be effective for McDonalds. New organizational
structure of company will help it in launching new products and services. When McDonalds will
implement this new organizational structure, it will manage the environment by considering the
performance levels and status. It will be reformed by looking at different issues, which are faced
by this company, i.e. changes in the consumer preferences and environment. It will launch new
product line of healthy foods for maintaining its performance, so that it can satisfy the needs and
demands of customers (MacKinnon & Fiala, 2014). Under this process, McDonalds will process
a divisional structure. Under this organizational structure, one specific department will manage a
specific area of business operations. The major goal of this organizational structure is to support

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the independence and flexibility of the company. This structure will be divided in different
levels, like; top management, functional based and performance based teams. In the first level of
management, CEO will lead all the processes and activities for decision making related to new
segment. CEO will give the orders to middle and lower level managers and other team members
in change process.
The second level of organizational structure is performance based department, under which
McDonalds will utilize the performance as a basis for new divisions in its organizational
structure. At performance based level, it will reflect on the development of company in current
business environment (Memon, Shah & Shah, 2017). Under functional based groups, the
organization will create the teams as per their tasks and responsibilities, like; operations, supply
chain, marketing, human resources etc. The company will consider some specific factors in the
process of reforming its organizational structure. Some of these factors are given below;
Cultural Factors
At McDonalds, its culture improves learning for determining the effectiveness of business
operations. Cultural factors of a company include values and traditions that may impact
employee behavior. The consistent improvement of cultural factors enhances efficiency of
company in executing its culture for achieving the abilities of human resources. These factors
will have a vital role for this organization and implementation of change process (Mills, Dye &
Mills, 2008).
Structural Factors
In change implementation process, it is very important to emphasize on the process structure and
process flow. Under this organizational structure, the commands and orders are running in a
hierarchy. Senior management of the organization will give the orders for lower level managers.
All the human resources in the company will comply with all the regulations and policies,
ordered by senior managers at McDonalds. If it will develop the structural factors effectively,
then the organizational process will work in an effective manner. It will reduce the situation of
conflicts in the workplace (New, 2015).

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Technological Factors
The development and success of this organization relies on innovative techniques and other
innovative applications. Under this process, McDonalds will conduct a research and development
process, which will assist it in understanding the trends and demands of customers. When the
company will launch its healthy food segment, then it will execute a communication plan for
promotion and advertising of products. This marketing communication plan will assist the
organization in promoting the healthy food to health concerned population. It can advertise its
healthy products, including healthy breakfast, shakes, drinks to target audience. By emphasizing
on advertising efforts, it will increase its sales and revenues via mobile devices and online media.
Technology factors play an important role for approaching a large segment of people (Shen &
Xiao, 2014).
Human Resources
Human resources play a significant role in the case of restaurant chain, so it is important to
manage the human resources effectively. In the implementation of innovative practices and
changes at McDonalds, it will conduct a training program for the staff, which will help them in
understanding development of new products and product segment. The people at organization
can be managed by holding meetings and they will feel motivated and engaged. It will make
them understand the reasons and needs for implementing the change. By this, the employees will
be able to know why their firm is planning to introduce the healthy food segment (Sharif, &
Scandura, 2014).
Thus, it can be stated that the above-mentioned factors can assist McDonalds in operating its
business operations by reforming its organizational structure. These factors will help the
organization in stay innovative and competitive in the business environment. Divisional structure
will enable the McDonalds in implementing innovation and changes in the systems.
Principles of Project Management
For implementing the changes and innovation successfully, McDonalds requires considering
different principles of project management. Employing these principles of project management
will assist in balancing the conflicts of improving innovations but evaluating and controlling the

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risks and costs that production and manufacturing process for new and innovative practices
involved in cannot be real in context of marketability and commercially as well. There are
different principles of project management, which McDonalds can use for initiating and
implementing the innovation in its business operations. To apply change and innovation,
McDonalds may pursue the below-mentioned principles of project management. It will assist the
organization in completing the process by managing the risks and associated costs (Shirey,
2013).
Setting vision and mission statement
For implementing changes and innovations at McDonalds, the organization will begin this
process by setting the vision in their mind. At McDonalds, management team will create mission
and vision for launching its new food segment for the people, who are very concerned about their
health. The objective behind this project will be clear and obvious to all the people of
organization. This principle of project management will help the company and its team to attain
forecasted outcomes through these innovative practices.
Assigning Roles and Responsibilities
As McDonalds is introducing a new initiative to deal with the issues, so there will be
requirement that all the employees understand their role in the change process. This is an
important principle of project management that defines that every employee should know about
for each person is accountable. It will assist the company in engaging the staff in the process of
change and it will have the ability to avoid the change resistance situation (Thornton, et al,
2013). At the organization, all the departments should have clear understanding about their roles
and responsibilities under the process of innovation. By this, the company will be able to handle
the situations of risks and challenges. It will decrease the situation of conflicts among
organizational people, which are related to their jobs and roles in innovation and change project.
Strategy Implementation
Following this principle is very essential in any project of organization. This project management
principle consists of creating an appropriate strategy to handle the issues that are faced by
McDonalds and for which it is trying to resolve. This business corporation is confronting the
issues associated with the changes in customer preferences and environment. In addition, there is
a competitive pressure also because its competitors are offering the products according to needs

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and expectations of customers, i.e. healthy foods. During this implementation process, the
company can adopt some aspects of quality management to manage the given issues. By doing
this, it will be able to control and manage the associated costs (Writer, 2015). This major
principle of project management will recognize all the related aspects of innovation project, for
example; who will execute different activities and processes, why, when and how.
Emphasis on Principal products
For a company, it is significant that it thinks about its primary products that they are planning to
provide to its target audiences. Under this process, it is very important to look at the current
market trends and changes in customers’ tastes. Before initiating the project, McDonalds needs
to emphasize on the needs for introducing this new food segment with healthy and quality food
products. Determining the needs and trends will help the company in knowing about the
requirements of changes in its current systems (McDonalds, 2012). This principle will make
them able to create more realistic and attainable objectives. Furthermore, it will help the
company in the management of innovative processes easily. In the given case, the primary
emphasis of this organization is on launching a product line with healthy and dietary food
products. Complying with this principle of project management will assist the firm in gaining
competitive advantage over its competitors in the industry.
Organization Arrangement
In the project management process, organization arrangement principle plays an important role.
For determining the success and growth of change implementation, everything, which will
impact should be taken into consideration. To achieve this, there will be a need of continuous
and effective communication by conducting group meetings, via sending e-mails and messages
and training program.
At McDonalds, this training plan will consist of a message for every level of management.
This should be applied through McDonalds in any other case it could confront the
problem associated with the situation of conflicts (Writer, 2015). Maximum of the stakeholders
will not be involved and inquisitive about both change and innovation implementation as well. In
this situation, it will be better for this entity to pursue this principle of project management for
handling the advertising and marketability of the given firm.