HNBS 317: Analyzing Impact of Change and Leadership at McDonald's

This report analyzes the organizational changes implemented by McDonald's, focusing on the impact of these changes on the company's strategies, operations, and employee behavior. It includes a detailed examination of the drivers behind the changes, a SWOT and PESTLE analysis of the business, and an evaluation of how the impact of changes was minimized. The report also presents a case study of McDonald's, exploring the opposition and support for the changes, the barriers encountered, and the influence of change on leadership and decision-making. Finally, it discusses various leadership approaches applied to manage the changes and concludes with an assessment of the overall change management process and its outcomes.

TOPIC: HNBS 317
Understanding and Leading
Change

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Impact of change and the effects it has upon the organisation’s strategy and operations......4
Overview of the McDonald's..................................................................................................5
SWOT and Pest analysis of business......................................................................................5
Impact of change on team behaviour, individual and leadership...........................................7
Evaluation of minimisation of impact of changes and the application of appropriate model to
process changes efficiently.....................................................................................................9
Case study of McDonald .....................................................................................................12
Determination of opposition and support for changes.........................................................12
Explaining different barriers of change and influence of change in the leadership and decision
making of the company........................................................................................................12
Applying the different leadership approaches in order to deal with the changes in context of
organization. ........................................................................................................................13
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Bringing changes in the operations of a business, is an essential task that a company
needs to fulfil in order to improve the sustainability of a business organisation. Changes can be
made in context to adoption of new technology or method of operations (Burnes, Hughes and
By, 2018). Changes can be done either in the organisational structure of the company or in the
way of performing its operations. Organisational changes results in bringing the company from
current position to its desired position. McDonald is a multinational brand of food industry that
was founded in the year 1940. Currently it is running its franchise at international level through
which it has become one of the leading brand of the food industry. MacDonald is planning to
change and restructure its offices structure. The company is planning to trim the office layers by
involving technological changes in its several operations.
The present study shows a report of business analyst of MacDonald containing driver
and impacts of changes and effect of changes in the organisational strategies (Benzer , and et.al.,
2017). It shows PESTLE and SWOT analysis of McDonald based on the changes made in the
company. In addition, the report provides an analysis of impact of changes and effect of changes
on organisation's strategies and operations. It also includes effect of such changes in the
leadership, individual and team behaviour along with the way in which the impacts were
minimised.
The second part of assignment shows a report that provides information regarding the
case study or McDonald and application of force filed analysis for determination of oppositions
and support to the idea of changes. In addition, it includes a detailed discussion about several
barriers of changes and their influence over decision making and leadership of changes.
Furthermore , it includes a review regarding accomplishment and success of the change . At the
end of report, the assignment includes advantages and disadvantages of different approaches to
the leadership for dealing with changes.

MAIN BODY
Impact of change and the effects it has upon the organisation’s strategy and operations
In today's business climate, organisational change is a regular occurrence. Leaders and
managers of MacDonald clearly need to be sensitive to the impact of change on their human
capital and should be aware that there can be positive as well as negative impacts of change in
the organisation (Burnes, Hughes and By, 2018) . But at the same time, they must weigh benefits
what the change might do for the overall organisation against what the change might do to those
who are affected by the change at McDonald.
People changes can become necessary because of other changes, McDonald's simply seek
to change worker's attitude and behaviour to increase effectiveness or to stimulate individual or
team creativeness. Almost always people changes are the most difficult and important part of the
overall change process (Canterino, Cirella , and Shani, 2018). Employees are effected the most
in case of a change in organisation, as it happened in McDonald's. Employees take the change in
negative aspect instead of positive which creates a job insecurity for the existing employees.
Changes made because of technological issues will be directly effect negatively on the
existing employees of McDonald's. They feel uncomfortable because of lack of skills of new
technology. Insecurity of job is being generated towards the employees. Implementing the
change in orderly manner, which involves managing the transaction effectively.
Internal employee resistance is a major barrier in negative effect of working. As certain
people strongly resist any kind of change to the status of quo or daily routine. There is also the
possibility of failure in new initiatives, leaving a company in a worse position than it was before
the change.
Changing strategy can have a number of positive effects too. New strategic directions can
help a company in adapting the changes in the environment of the marketplace (Van Wart and
Denhardt, 2019). If an employee is less productive and this is affecting the other employees
efficiency of work, then it is necessary for the McDonald's for a change. New changes can help
McDonald's to perform more effectively and cost efficiently. Change in McDonald's will also
help a stagnant company to reclaim its former growth rates.

McDonald's employees giving a positive impact towards the weak employees are the key
factor for achieving the goals of McDonald's. Productivity is increased if a employee creating
negative vibe is removed, resulting in efficient and effective working of existing employees.
Communication strategy of supervisors will be affect the working of existing employees.
Need of change will be circulated to existing employees so that there is less chance of having
negative effects of change to existing employees. With the change in communication strategy
there will low chances of communication gap (Van Wart and Denhardt, 2019). For prevention of
communication gap, there should be direct communication of subordinates to supervisors. This
will improve the productivity of McDonald's.
Motivational strategy is to be adopted by McDonald's, as with a change there are many
negative aspects which leads to less effective working of employees because of the changes
made for McDonald's interest.
Overview of the McDonald's
McDonald's is fast food company of America which was founded by Richard and
Maurice in the year 1940. The McDonald's is one of leading company in the world of food
industry. It provides wide variety of fast food to customers all over the world (Nelson-Brantley,
and et.al., 2018). There are many countries in which people consumes food products of the
company. The popular products of McDonald's are French fries, Hamburgers and cheese burgers.
They are also gaining popularity in their breakfast items and milk shakes. The company by
enabling technological advancement able to communicate well with customers during online
orders. McDonald's own in different countries by operating through different franchisees and
companies operated restaurants.
SWOT and Pest analysis of business
Taking the case of McDonald's of trimming its corporate team ,that how drivers of
change influence any business. The McD' s organizational structure was changing, for improving
home office and field employees work and result of such a change can be several drivers.
Political issues
Political issues that affected each and every business of the US based companies and the
external ones, like the Trump government raised the trade barriers the tariff rates, increase in tax
rates affected the business of McD.

Economical Factors
Economical factors such as reduction in layers would be driving its labor costs to cut
down resulting in savings of around $ 500 million to remain cost efficient and cost productive in
the market. Its cost structures were going higher than its revenues which drove it to take
decisions like organizational restructuring.
Socio cultural factors
Social changes are going to impact the existing business of McDonald's as it is
restructuring its layers , resulting in reducing a large no. of employees from the company (Van
Wart and Denhardt, 2019). Because of such change many employees would lose their office
colleagues and friends that may bring down the efficiency of the employees of the company. This
can also have a negative impact on the existing staff as it would create job insecurity among
employee they would try out searching for new jobs.
As the company deals in different geographical areas. So, the need and habit of food vary
from country to country. For this, for meeting changing demand like price conscious, health
conscious, etc . The McDonald's adapt its menu according to the choices of customers prevailing
in different geographical boundaries.
Technological Factors
New technologies have reduced the manual work and increased the effectiveness of the
working process. The McDonald's was able to reduce its structural layers because of the
technology as the work can now be performed by software , and new applications. Further the
company was planning to invest more in strategic areas and field consultancy.
Online ordering is another technological advancement in McDonald's which enables
company to collect data and also offer them personalized products by marketing promotions. The
technology avail higher convenience level for consumers for mitigating risk of customers.
Identifying drivers of change through SWOT analysis
Strength
Strength of McDonald's is that it is the most recognizable brand of the world. Customers
do not get a taste difference by change in its outlet's locality. Being so large with huge earnings it
is able to offset its earnings with one another (Nelson – Brantley, and et.al., 2018). At same time
change in its tastes can affect its status. Reduction of employees did not affect the business
because of its brand value worldwide.

The size of McDonald's is one of the biggest strength of the company. This creates brand
image for customer’s and also exercise high bargaining power on suppliers.
Weaknesses
Most employees of the McDonald's are under payed and low skilled. Employee turnover
is high , training costs again hit the company . There is huge perception that McDonald's food is
unhealthy, junk filled carbs fat etc which is a drawback of the company as the people are
becoming more and more conscious about their health.
Opportunities
Having the large customer base can help the company in increasing its new products.
The company introduced artisan chicken and sirloin burgers to the menu card. The company
always has the opportunities to expand its business through new products or to offer premium
products to some of its new locations. McDonald's decision was to ease the criteria of helping
franchise to build new business plan and obtaining corporate resources.
There is an opportunity for McDonald's to enter into variety of healthy food. There is a
lack of healthy and tasty food in market which offers and opportunity for McDonald's to enter
into market by attracting all health conscious people .
Threats
Competition has been a threat of every company so is faced by the McDonald's too.
Competitors like Subway, Burger king are offering their products at much lower prices. To
compete on prices the company has reduced layers of employment structure as price rise can
affect its sales.
The company is operating only in sector of fast food by which the people who are health
conscious do not prefer food of McDonald' s. Thus, the company can not able to cover a huge
customer base by their food products.
Impact of change on team behaviour, individual and leadership
Every organisation need changes in the structure and their business to improve the quality
of work and performance of the employees and organization (Canterino, Cirella, and Shani,
2018). Change in organization affect the productivity, profitability, team behaviour and
leadership of the company. Mc Donald's change their structure by 8 line to 6. The change in their
structure improve their operational work by better controlling the activity and also enhance the
technology in the organization. The adaptation of advance technology improve the performance

and reduces the number of employees so McDonald's can able to manage the structure at 6 level
or line (Thornton, Usinger, and Sanchez, 019). Chang affects the performance of the company in
both positive and negative manner because of the diversity of employees. Some employees are
ready to adopt the changes while other are resist to adopt change. The impact of change on team
behaviour, leadership and individual are as follows :
Impact of change on individual
Technological advancement : The change in technology and adopting new technology
in the organization improve the operation work and motivate the employees to learn new things
and work on the advance technology. McDonald's change their stricture to improve operation
department performance (Head, and et.al., 2018). To manage the work and change the structure
from 8 to 6 they also use the advance technology in the company. The technological change
improve the performance of employees by providing better growth opportunity and reducing the
error in manual work. It helps to improve the efficiency and skills of the employee (Hayes,
2018) . It also forces the management team to organize different training and development
program to improve the skills and knowledge and help the employees to learn the technology
adopted by McDonald's.
Employee turnover : change impact both positively and negatively in the business
environment. Change brings the positive changes such as improve skill, technique etc. but the
same time it also negatively affect the business environment. All the employees in the company
are not ready to adopt changes in the business activity so they resist adopting the changes which
increase the employee turnover. Change in structure or strategy of McDonald's decreases the
morale of the individual with the increasing employee turnover.
Impact of change on Team behaviour
Employee relation : change in the organization policy and technology such as adopting
new techniques in delivery system and promotion of the company activities etc. motivate the
employees to learn new things and also improve the relation between the employee and employer
(Mc Caffery, 2018). The employee relation make huge impact on team building. A good
employee relation in McDonald's build positive energy in the employees and help them to work
in team by understanding the values and belief of the other employees . A poor employee
relation increases the conflict between the employees which affect the team work.

Increasing stress : Organizational change affect the team building of the business. The
advancement of new technology provide accuracy in data and reduces the number of employees
in the company which improve the control of management on the employees to measure the
performance (Tang, K. 2019). On the other hand it increases the stress of the employee by
adopting organizational change like change in strategies, management of employees etc.
McDonald's adopt the new structure in the organization to control the activity in better manner
and improve the performance buy adopting the latest technology.
Impact of change on leadership
Control : The change in organization also affect the leadership style. Leader is the
person who guide and direct the employees in the organization to perform in structure form to
achieve the target and objective of organization. The change in leadership style such as from
autocratic to democratic affect the control of the employees . McDonald's follow the autocratic
style in the organization to control the activity of the company but the organizational change
influences company to change the leadership style from autocratic to democratic style so they
can better manage the activities of the employee to get the benefit of new leadership style
(Nelson-Brantley, and et.al., 2018). Democratic leadership style reduce the control of leader on
employees and provide employees an opportunity to participate organization activity such as
making decision regarding improving performance, train the new employee etc.
Motivate : The change in organization policy such as providing incentives, bonus to the
employees motivate them to work in a better manner and improve their efficiency to achieve the
target of the organization. McDonald's use the advance technology to improve the operation
work (Burnes, Hughes, and By, 2018). Technology being the several changes in the operation
such as increase efficiency, manage time by using advance software etc. The latest technology
motivate the leaders to adopt the changes and to work on the advance software to get the better
performance and knowledge.
Evaluation of minimisation of impact of changes and the application of appropriate model to
process changes efficiently
Minimisation of impact of changes:
As changes in the organisational structure and operations of the company results in
having a potential impact over overall business of the company, the managers of McDonald

needs to develop more effective strategies to minimise the changes and implement the changes in
an effective manner.
For this purpose, the managers of McDonald can use the McKinsey 7 S Change Model.
This model provides several elements through which managers can process the overall changes
within the business in an effective manner. The McKinsey 7 S Change Model can be analysed as
under:
McKinsey 7S Change Model
The present model provides 7 key elements with the help of which managers can more
effectively implement the changes within the business and gain appropriate amount of benefits
from such change as well (Nelson – Brantley, and et.al., 2018). These elements are being
divided into 2 major elements i.e. hard element and soft element. These elements to be used in
this model is as under:
Hard element: As per McKinsey 7S Change Model, hard models are those that can be directly
controlled by the managers of a business. Elements of hard element category are as follows:
 Strategy: Strategies can be defined as the action plan developed by the managers in order
to provide a roadmap to other members and workers of the company for the purpose of
performing their tasks. McDonald's managers should efficiently analyse the changes and
performance of the company's workers as well (Van Wart and Denhardt, 2019). It would
help in formulation of an effective strategy for the company through which they would
help the company in processing the changes effectively.
 Structure: The structure can be defined as a manner in which reporting of the
performance would be done within the business organisation. Development of this an
effective structure would help in implementation of an effective control measures at each
level of McDonald. As reporting process helps in reduction of errors and elimination of
the probability of fraud as well. In addition, development of an effective structure will
also help in detection of errors in the performance through which the impact of changes
could be reduced.
 System: This element helps the managers in formulation of an effective system within
the business through which each employee of the company would be able to ensure their
day to day task and completion of those tasks as well. In order to resuce the effect of
implementation of changes, the managers of McDonald can develop their plans for

setting the structure of the business in such a manner in which employees could be
guided for completion of their tasks efficiently (McKinsey 7S Change Model. 2019). In
addition, they can also formulate a strategy for the company for appointing some
professionals and expertise that can guide the workers and help them in adopting the
changes made by the company efficiently.
Soft element: Along with the above hard element, McKinsey 7S Change Model also provides
some soft elements for effective process of changes purpose. The soft elements are not in direct
control of the company. Rather, they depend upon the culture. These elements can be analysed as
under:
 Shared value: It refers to the cultural values adopted by the business organisation at their
workplace. Adoption of ethical and cultural values helps in maintaining healthy culture
within the business (Burnes, Hughes and By, 2018). It leads in providing self motivation
to the employees for the purpose adopting changes in the organisational structure and
minimise its effect as well.
 Style : The soft skill of style refers to the leadership style. To minimize the impact of
change in the organization. McDonald's adopt the different leadership style at different
level. The autocratic leadership style help the employees to perform in better manner by
controlling the activity at the same time the democratic style provide open opportunity to
participate in the decision making process to improve the performance and motivate the
employees to adopt changes in the company structure.
 Staff : McDonald's also use the capabilities of the staff and employee to adopt the
changes in the organization (Nelson – Brantley, and et.al., 2018). The different skills and
knowledge of the employees in different area help them to adopt the changes in the
organization and influence the team member to cooperate with the company and accept
the change for development and growth of the organization.
 Skills : The skills and knowledge of the employees also help the organization to improve
minimize the impact of change in the company and help them to influence the other
employees also to accept the changes (Canterino, Cirella, and Shani, 2018). Because of
the cultural diversity and advancement of technology employee bear different skills and
knowledge in the organisation which help them to change their perception and views
according to the changing environment and minimize the impact of change in McDonald.

Case study of McDonald
McDonald is one of the most leading company of food industry in all over the world. It
provides food services to its customers in worldwide. It has opened its offices in several regions
of numerous countries. The company has planned to restructure its office design by cutting down
the layers of office operations from 8 to 6. McDonald has brought an idea to bring some
technological changes and start using the latest technological equipments within the office for
performing various operations (McDonald's Outlines U.S. Organizational Changes, 2019). This
idea helped the company in improving the efficiency of company in performing its business
operation. In addition, removing layers from office has also lead in reducing the need of number
of employees to be employed by the business. In this regard, bringing such changes within the
organisational structure and operations helped in developing more cost efficiency within the
company.
Determination of opposition and support for changes
In order to determine several oppositions and support of changes force filed analysis is
required to be done. This analysis helps in evaluation of pros and cons of the idea of bringing a
specific changes in the organisation.
For a better evaluation of pros and cons of change in organisational structure and
business operations of McDonald, Kurt Lewin's force field analysis model can be used as under:
Explaining different barriers of change and influence of change in the leadership and decision
making of the company
Barriers of change in the McDonald and their influence over the decision making and
leadership:
At the time of execution of plan of removing layers from the office operations and
bringing technological changes within the company, the McDonald faced following barriers:
 Inefficiency of workers in adopting changes: It is a major barrier faced by McDonald.
This barrier of the firm may had a direct influence over the performance of overall
business (Van Wart and Denhardt, 2019). For the purpose of adopting changes in
effective way, the leaders of company needs to develop more effective motivational and
other strategies for employees so that they could accept the changes easily keep
performing their task without being affected to such changes .