For my business course, I have been asked to prepare a report for a business at work. I could choose any business to investigate. I decided to do McDonalds because it is globally recognised and of its size.
.0 Introduction.. 4
2.0 Background Information.. 4
3.0 (E1) McDonalds Ownership.. 4
3.1 Advantages To Being A Franchise. 5
3.2 Disadvantages To Being A Franchise. 5
4.0 (E2) McDonalds Objectives.. 6
4.1 (C1) Achieve Profitable Growth.. 6
4.2 (C1) Be The Best Employer.. 6
5.0 (E3) Departments Within McDonalds.. 8
5.1 Human Resources. 9
5.2 Marketing.. 9
5.3 Administration.. 10
5.4 Finance/Accounts. 10
5.5 Research & Development.. 11
6.0 (E4) (C2) Management Styles.. 11
6.1 Autocratic.. 11
6.2 Democratic.. 12
6.3 Lassez-Faire. 12
6.4 Consultative. 12
6.5 McDonalds Management Styles-Head Office. 12
6.6 McDonalds Management Styles-The Restaurants. 13
7.0 (E4) (C2) Cultures Within McDonalds.. 13
7.1 McDonalds Culture. 14
7.13 McDonalds Head Offices. 14
7.14 McDonalds Restaurants. 14
8.0 (C2) Organisational Structures.. 14
8.1 Organisational Structure Of McDonalds. 15
8.2 McDonalds Head Office. 16
8.21 Head Office Structure & Its Effect On the Objectives. 17
8.211 Achieve Profitable Growth. 17
8.212 Be The Best Employer 17
8.3 McDonalds Restaurants Structure. 18
8.32 Restaurant Structure & The Effects On the Objectives. 18
8.321 Achieve Profitable Growth. 18
8.322 be the Best Employer 18
9.0 (E5) Communication.. 19
9.1 Vertical & Lateral communication.. 19
9.2 Formal & Informal Communication.. 19
9.3 Restricted & Open Communication Channels. 19
9.4 Face To Face & Meetings. 20
9.5 Telephone & Fax.. 20
9.6 Letters & Internal Memos. 20
9.7 (C3) ICT.. 21
9.71 E-Mails. 21
9.72 Websites. 21
9.73 Business uses. 22
9.74 Software. 22
0.0 (E6) Quality Systems.. 23
0.1 Quality Control. 23
1.0 Bibliography.. 24
2.0 Appendices.. 24
.0 Introduction
For my business course, I have been asked to prepare a report for a business at work. I could choose any business to investigate. I decided to do McDonalds because it is globally recognised and of its size. Also because it is a franchise I thought that it would be interesting to see how a franchise operated. The tasks that I need to complete are, explain the ownership of my chosen business and the advantages and disadvantages to this, the objectives the business sets for it self, how it meets these objectives and is it successful in meeting these. Look at the departments within the business and the functional areas within each of these departments. Look at the different management styles within the business, looking at the organisational structure, the communication used within the business, the impact of ICT on the organisations communications, and the price of the product that the business sells and how they set this price. For my extension piece, if I chose to do it, I have to look at other ways in which objectives can be met and show how a change in structure or functions to achieve the objectives with the alternative approaches.
I got all the information on McDonalds from their various websites around the world; this included the UK, Australia and principally the American website. I also phoned McDonalds UK and requested a student information pack. All information is from 2000 unless otherwise stated.
2.0 Background Information
McDonalds was the brainchild of two brothers, Mac and Dick McDonald. They dreamt of owning a small chain of moderately successful burger bars and opened their first restaurant in San Bernado, California.
Until 1954, the brothers had exactly what they wanted; it was then that they met Ray Kroc. He was granted a licence to be a franchisee and opened his first store in Des Plaines near Chicago, Illinois in 1955. By 1959 he and the McDonald brothers had 100 restaurants running. In 1961 Kroc brought the rights of the McDonalds restaurants from the brothers for $2.7 million. 9 years later, he had over 1,000 restaurants in America, Canada and Puerto Rico. Kroc then made the decision to expand stores faster and further away, by 1972 he had opened an additional 1,000 restaurants worldwide. 1974 saw the opening of the 3,000th and the first in London opened in Woolwich, South East London. In 1984 Ray Kroc died and the Ronald McDonald Children's Charity was set up in his memory. Although Kroc passed away his business carried on expanding, by 1999, there were over 25,000 restaurants worldwide, and the company is still growing every year.
3.0 (E1) McDonalds Ownership
McDonalds Restaurants Ltd. is a wholly owned subsidiary of the McDonalds corporation, no other companies are a part of this, the company is not listed on the UK Stock exchange but is on the stock exchanges in New York, Frankfurt, Paris, Munich and Tokyo.
As well as being a privately owned company, McDonalds is well known for being the largest franchised food service company in the world with over 70% of McDonalds restaurants owned by franchisees globally. In Britain this percentage is just over 26%, which means that 216 of the 836 McDonalds in Britain are owned by franchisees.
3.1 Advantages To Being A Franchise
There are advantages to be a franchise, for both the company and the franchisee. The advantages for the franchisee are: ~
To start a business on a well established company.
Don't have to worry about what products to sell as the company decides that.
Don't need to worry about marketing the business or the products.
Full training given
Support from the company
Marketing carried out by the company is beneficial to the frsnchisee
The franchisee depends on the royalties from the product, as the business is already established, it is likely that it will be more popular straight away, so the franchisee doesn't need to wait for the business to become popular to earn money.
Can be your own boss
Room for Innovation:- Filet-O-Fish was invented by a franchisee as was the drive thrus.
The advantages for the company to be a franchise are: ~
The company become more globally spread and have the potential to become one of the biggest business in it market sector, this is true for McDonalds, 70% of their restaurants worldwide are owned by franchisees.
They get royalties from all the products sold by franchisees, without any of the costs such as like staff.
3.2 Disadvantages To Being A Franchise
Disadvantages also come with being a franchise, once again for the company and the franchisee. The disadvantages for the franchisee are: ~
The Company restricts a tight hold on them, telling them what to sell how the restaurant should look even where it should be built.
If the McDonalds Company suffers from bad publicity, so will the franchisee.
The company could suffer disadvantages as well, these can include: ~
If a franchisee suffers from bad publicity, such as paying people next to nothing, or having a dirty restaurant, this affects McDonalds as well, as people assume that they own all of the restaurants.
4.0 (E2) McDonalds Objectives
On the McDonalds website, they company list their main objectives as: ~
To achieve enduring profitable growth:- McDonalds state that their first objective a company is to achieve profitable growth, they hope to achieve this through innovative new products and services and ensuring that the name McDonalds is associated with quality and great products.
To be the best employer to all employees in each community around the world:- McDonalds hope that all of their employees enjoy working for them, they provide a whole range of benefits and opportunities open to every employee. They put a massive investment into each employees training so that they feel happy in their job. McDonalds maintain they are an equal opportunities employer.
In this section I will look at the 2 objectives to see if and how McDonalds meet them.
4.1 (C1) Achieve Profitable Growth
It is easy to see how McDonalds meet this objective with system wide sales in 1997 exceeding $33 billion and net income was in excess of $1.6 billion. System wide sales in the USA made up $17,125billion of this figure, more than the rest of the world combined!
In the UK this figure stood at 1,088 million, an increase of 15% on 1996, with McDonalds sales continuing to grow (the first two months of 2001 global system wide sales $6.2 billion) it seems that McDonalds are going to continue to achieve this objective.
4.2 (C1) Be The Best Employer
This is the second objective of McDonalds and they make sure they work hard to meet it, they maintain they are an equal opportunity employer (in 1996 they were awarded the corporate award from the National Federation of Black Women Business Owners for their commitment to equality) and each restaurant must follow a policy set up by the corporation when hiring new staff, this policy is: ~
To recruit people who have a positive attitude towards customers, themselves and other employees and who are capable of delivering the highest standards of quality, service and cleanliness to our customers
To employ local people wherever possible
To ensure that employees and potential employees are selected, trained, promoted and treated on the basis of their relevant skills, talents and performance and without reference to race, colour, nationality, ethnic origin, gender, sexual orientation, marital status, age or disability.
To provide a clean, safe healthy and enjoyable working environment.
To provide training and development for all employees to enable them to achieve the highest level of skills possible.
To provide career opportunities which allow employees to achieve there full potential
To provide challenging and rewarding work
To pay for performance
To communicate effectively with all employees via crew meetings, one-to-one discussions, publications and regular employee satisfaction surveys.
To encourage the educational pursuits of employees through the McDonalds Scholarship Programme which provides financial support to qualifying employees.
By following this policy, ...
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To provide a clean, safe healthy and enjoyable working environment.
To provide training and development for all employees to enable them to achieve the highest level of skills possible.
To provide career opportunities which allow employees to achieve there full potential
To provide challenging and rewarding work
To pay for performance
To communicate effectively with all employees via crew meetings, one-to-one discussions, publications and regular employee satisfaction surveys.
To encourage the educational pursuits of employees through the McDonalds Scholarship Programme which provides financial support to qualifying employees.
By following this policy, McDonalds not only make sure that they hire people based on their skills but that the environment they work in is safe.
McDonalds offer many advantages to being an employee of the company, with trainee programmes available, any employee over 21 can apply for the management training programme, successful applicants will find that this can lead into a successful career into restaurant management.
All McDonalds managers have the opportunity to achieve a nationally recognised qualification that is accredited by the Nottingham Trent University.
A junior business management programme is also open to A Level school leavers, the programme involves working at McDonalds and having it combined with a day of studying for a recognised business qualification like a BTEC, HND or HNC, this is a two-year course.
There are multiple benefits to going into management into McDonalds, these are: ~
Private health care (including spouse and dependents)
Pension scheme (including life assurance and long term disability)
Paid holidays (4 weeks, 5 weeks after 3 years service)
Company car (after 6 months service)
Bonus service
President's awards (bonus of1/3 basic salary forselected individuals)
Sabbatical (8 weeks paid leave for every 10 years service)
Company sick pay (4 weeks paid leave in any tax year)
Profit related paid scheme (for employees with 3 years service)
Stock option scheme
Share purchase scheme
Telephone Assistance
Company loan scheme (up to 3500 repayable over 1 year)
BUPA Healthscreen (operational manager and office equivalent)
Family life assurance (telephone advisory service)
Relocation assistance (when at the request of the company)
Maternity and Paternity Leave Programmes
Service Awards (at 3,5,10 and 20 years service)
In 1997 the average pay rate for employees was 4.18, there are also advantages to being a crewmember of McDonalds these are: ~
Free meal allowance
Paid Holiday (4 weeks)
Free life assurance (value dependent upon service)
Private health care (for employees aged 19+ with 3 years service)
Scholarship programme
Share purchase scheme
Profit related pay scheme (for employees with 3 years service)
The scholarship programme is very popular amongst McDonalds employees, the guidelines are: ~
Open to internal candidates employed by the company
Applicants enter an essay competition
Recipients are selected by a national panel
A 1,000 award is granted to the successful applicants
50 awards were given in 1998
Awards will be made annually
All of this shows that McDonalds work hard to make their employees happy, by doing this they receive low staff turnover, therefore reducing the need for staff training and bringing down staff morale.
McDonalds seem to reach this target easily on paper with many benefits available, recently upon visiting a restaurant I asked two employees on what it was like to work for McDonalds, employee one a 19 year old female said: ~
"You meet a lot of great people while working here, but I couldn't do it permanently
I'm only working here to put myself through university, the management are great though"
The second employee, a 17-year-old male said: ~
"I've been here for a year and a half this isn't my chosen career though, I'm at college, although I am thinking of becoming a manager, but I'd rather make a go at something else, more hands on and outdoors"
Although these two employees seem to enjoy working at McDonalds neither of them seem to make a long term career out of it for definite.
5.0 (E3) Departments Within McDonalds
Every organisation is made up of different departments each of these departments help McDonalds achieve their objectives. In this section I'm going to look at all the departments within McDonalds and explain how they help them achieve their objectives.
Because McDonalds is a large multinational company, the amounts of departments they have is huge. Each country has their own Head Office and departments, these report to their international Head Office, these are split geographically and are located in Europe, Asia, South America and North America, these Head Offices are also split into different departments and report to the American office, countries not covered by the international offices report directly to America.
There are many departments present within the McDonalds Corporation, these are: -
Human Resources
Marketing
Administration
Finance and Accounts
Research and Development
These departments are covered within the next sections.
5.1 Human Resources
Human Resources are responsible for recruiting the right staff for the right job; they are responsible for training of all staff and keeping records on them. Staff welfare is also a task carried out by this function and probably one of the more important. Human Resources try to make sure that the staff of McDonalds are happy were they are working and try to make sure they are not harassed in any way, such as sexual or racial harassment. For McDonalds, Human Resources also decide on what bonus each individual member of staff should receive.
Human Resources are vital for McDonalds to exist as they help McDonalds meet there second objective: - Be the best employer. Without Human Resources, no one would be keeping track of staff welfare, and arranging all of the staff benefits and bonuses. Human Resources are also responsible for training staff, without the correct training, McDonalds staff would feel that they were no good at their job, so it is vital that training is done right. The other tasks that Human Resources carry out are: - Facilities, Hygiene & Safety, Quality Assurance and Customer Service, all of these are very important for McDonalds to survive.
5.2 Marketing
Marketing is vital for McDonalds to survive. Marketing is the function that informs the customer of the products available and tries to persuade them to buy them.
Marketing have to analyse the local area and decide what new product or service is needed. Because each country has different tastes and ideas, it is important that McDonalds have a marketing department within each country.
Although marketing is not directly linked to the objectives, it does have an involvement in McDonalds meeting them. Without marketing, there would be nobody to advertise the products of McDonalds so customers wouldn't be aware of them, this means sales would fall so they would fail their first objective: - Achieve profitable growth.
Marketing are also responsible for Communication, RMCC and Environment.
5.3 Administration
Administration is one of the most important functions that exist, but it is also the one that is least thanked. Admin supports all other departments in their tasks. All admin departments in any business follow a basic procedure, this is: -
Admin also take care of communicating, monitoring and record keeping this is sometimes a legal requirement.
Admin are indirectly linked with meeting the objectives, but do play a big role, without them, finance would not be able to publish the budgets and how much turnover each store has to provide.
5.4 Finance/Accounts
The finance function controls all flows of money in and out of the business. It is also responsible for keeping financial records and providing the managers within the business with financial information. The finance and accounts function may also deal with:-
Financial Control:- It is very important that businesses control all costs and cash flow. Any unnecessary expenses going out of the business affects profits. Finance staff help monitor this by checking planned flows against actual flows. However, they can provide this information to other department managers so they could carry out this task.
Costing:- Finance may have to monitor the costs of new products, equipment or processes, they will tell management whether it is a financially possible idea.
Financial Planning:- Finances need to be planned in advance, this is to ensure that the business meets all of its deadlines. The finance function will als identify any short, medium and long term commitments.
Advising Management On Raising Finance:- From the planning, finance will be able to identify where there may be shortages of cash flow. They will also be able to advise the managers on how to raise the money to cover this.
Preparation Of Financial Reports & Statements:- Any financial reports needed for shareholders, managers and for external use such as the Inland Revenue or the VAT office will be generally prepared by the finance function.
5.5 Research & Development
If businesses wish to remain competitive, it is important that they continue to bring out new and innovative products. This is especially important for McDonalds as they have strong competition like Burger King and Pizza Hut. Research and Development are the function that looks at the potential for new products and more efficient ways of producing them.
The research and development function are related to three areas, these are:~
Product Design:- In this area is the emphasis on style, innovation and customer satisfaction.
Researching New Processes:- This area looks at efficiency and cost reduction of new and old products, perhaps by looking at new methods and technology to produce products.
R&D work closely with marketing by looking at marketing research findings.
Although it looks that R&D take up a large chunk of money for only a few products a year, it is a very important department for many businesses. It helps McDonalds in meeting the objective:- Achieve profitable growth; by inventing new products that are appealing to the customer, the more opportunity for new customers to come and try new products. For example: a new product on the market at McDonalds is the McSalad shaker, this may appeal to people who are into healthier eating and therefore attracting new customers, also, people who already visit McDonalds frequently may purchase it just to try it.
6.0 (E4) (C2) Management Styles
There are three main types of management styles and every business will use these. In this section I am going to summarise the different types of management styles and take an in depth look at the management styles that are present within McDonalds. I will look at the Head Office in Britain and a restaurant to determine how each place is managed.
6.1 Autocratic
This management style is just one person giving orders to others, there is no negotiation and is very prescriptive. The advantages to this management style are: ~
The job gets done quickly.
The only person who has input is the manager, this mean no conflicting ideas.
The disadvantages to this type of management style are: ~
Little job satisfaction and low staff morale.
Lack of input could lead to poor results.
6.2 Democratic
Democratic management means that junior managers and employees as well as the manager carry out the decision-making. Unlike autocratic, more people are involved in the running of the business. The advantages to this are: ~
A lot more suggestions/ideas for the business
Job satisfaction for staff and high morale.
The disadvantages are: ~
Manager has less control
It takes a long time for things to get done.
6.3 Lassez-Faire
The third and final management style is called lassez-faire, this means leaving things as they are and letting the workers decide who should do what. The advantages to using lassez-faire as a management style are: ~
Staff can do the tasks that they like and what they want (Autonomy)
Very high staff morale and job satisfaction.
The disadvantages to managing a business like this are: ~
The manager has virtually no control.
Problems could be covered up by staff.
No staff development.
6.4 Consultative
Consultative management is a cross between autocratic and democratic management. While employees are able to submit their ideas, decision-making is still done by management. The good side of this management style is that the employees feel comfortable knowing their ideas are being listened to; this makes a better working environment. The bad side of this management style is that although the employees are listened to, they have little say in the decisions made. This means that decisions that the employees don't like may be made.
6.5 McDonalds Management Styles-Head Office
The Head Office for McDonalds (U.K)mainly uses a democratic management style. Although they have one chairman, he only helps make the vitally important decisions and helps staff when they have a serious problem.
Each of the functions that were highlighted in the previous section has a director that oversees all of the tasks undertaken by their department. Each of these departments have there own set of staff and each member of staff have a team that specialise in a certain area of the function. They work together to solve a problem that arises in that specific area, if they can't solve it they speak to the Head of the department.
For example... Human Resources take care of: ~
Human Resources
Training
Customer Services
Hygiene and Safety
Quality Assurance
Facilities
Each one of the above tasks has specialist people to take care of all problems within that area. The staff does carry out tasks for the other departments but each has their main job. If a problem happens in a certain area, the team that look after that area all come together to work out a solution, they do this with or without the Head of the department, depending on the situation, if the problem is very big, they then go to the chairman.
This is the same for all departments
6.6 McDonalds Management Styles-The Restaurants
McDonalds restaurants are managed differently to the Head Offices. They use a mainly autocratic management style. This is because they are dealing directly with the customer, and at busy times a decision needs to be made quickly and correctly to ensure that the customer receives the best customer service.
Another reason for using autocratic management is that the people who are better trained for certain tasks will be needed to do them at the busier times, (for example serving on the till on a Saturday lunchtime). By doing this it means that the customers get served more quickly and efficiently. If staff were to chose what tasks they did, then the people who were more skilled at a task wouldn't necessary be doing it as the staff are more likely to chose the job they like best rather then the one that they were best suited for.
7.0 (E4) (C2) Cultures Within McDonalds
Every business is made up of different cultures, and the cultures that are present within the business depend on the management styles and organisational structures that are used. The different types of cultures are: -
Role Culture: - This is best suited to a hierarchy organisational structure. This type of culture works best by every employee playing the role that he or she has been predetermined and corresponds with the rules and regulations of the business
Task Culture: - This culture encourages people to work as a team; this works best in a star structure.
Power Culture: - This works well in a matrix structure. It is based around one dominant individual/leader.
Person Culture: - this culture focuses on providing administrative help and support and close attention to one person in the organisation.
7.1 McDonalds Culture
McDonalds have many different types of culture present within the business; this is because of its size and many different Offices that are situated globally. The next few sections looks at the offices of McDonalds in Britain, Europe and the main Head Office in the USA, they are all summarised together under the same section, I will also look at a McDonalds restaurants and what kind of cultures they are likely to use
7.13 McDonalds Head Offices
All of McDonalds Head Offices work in the same basic way, just on a bigger or smaller scale. They all use what appears to be a task culture.
All Head Offices are divided into different departments as listed in 5.0. All of these departments have people specially trained to do specific tasks, because all staff members are trained to do a certain job, the management of the departments leave them to carry on their jobs alone. Management however, do get involved when theirs a major decision to be made, or a massive problem.
7.14 McDonalds Restaurants
McDonalds restaurants work in a completely different way, they use more of a power culture in which the manager on duty assigns staff members with different tasks each day.
All members of staff will be gradually trained in all tasks present in the restaurant (food preparation, serving on the till etc...) and will be asked by management to do these tasks on any given day or time.
8.0 (C2) Organisational Structures
Every business works using an organisational structure, this means that the organisation has its staff organised in a certain way depending on the staff, their responsibilities and whom they must report to. Cultures and management styles play a massive part in organising the structure.
8.1 Organisational Structure Of McDonalds
Because McDonalds is a large multinational company, it is made up of many different organisational structures, this can be broken down into different sub sections, which are organised into their own organisation structure, this is:-
Head Office (USA)
Each level of the above structure operates with a different organisational structure in each office, but is different to all other layers. This means that the Head Office of Latin America operates in the same way as the Head Office of Europe using the same management styles, cultures and organisational structure but operates differently to the country Head Offices, the Head Office of the USA and the restaurants.
Within this section, I will be looking at the Head Office of the USA and a restaurant to see what type of organisational structure they use.
8.2 McDonalds Head Office
Finance Director
Marketing Director
Training/
Development Director
President Of New Brands/Chairman & CEO of Boston Market
President Of Latin America
President of Canada
President Of USA
Chief Operations Officer- President
Of the Americas
Human Resources Director
General Counsel
Chief Operations Officer- President of Europe/Asia/
Pacific/Middle East/Africa
Vice Chairman/President of Boston Market
Vice President- New Brands
President-Europe
President- Asia/Pacific/
Middle East/Africa
Executive Vice President/ Worldwide restaurant Systems
Vice President
The above structure of McDonalds head office shows that a hierarchy structure is used by McDonalds. It is a formal structure, which means that it has limited communication channels, the arrows show the flow of communication, it is mainly vertical flows of communication, and this is explained in a later section.
8.21 Head Office Structure & Its Effect On the Objectives
The structure of the business plays a part in meeting the two objectives, it can either help them or hinder them depending on the structure.
8.211 Achieve Profitable Growth
Depending on what type of structure is used and the type of business that is involved, this objective has the ability to be met. If the right structure is used for the appropriate business then the costs of running the business will be brought down, this in turn will increase the profits.
This can work the other way though, with the wrong organisational structure being used resulting in higher costs and lower profits.
The hierarchy structure that McDonalds tend to use works well for their particular business, they have a limited amount of people working on certain tasks and departments who are fully aware of what they have to do, this cuts down on the need for directors/managers to be paid more for doing a harder job, therefore lowering the costs some what.
8.212 Be The Best Employer
If the structure of the business is the correct one it can provide high staff morale and job satisfaction. The best structure for this kind of objective is usually a flat informal structure, where a democratic/consultive management style is used so that staff feel that they contribute to the running of the business. A hierarchy structure does not usually provide this because an autocratic management style is typically used.
McDonalds however, are the exception. The management style used in the Head Office is mainly democratic with staff allowed to make their own decisions and voice there own opinions it has the possibility to provide job satisfaction because of this staff input.
8.3 McDonalds Restaurants Structure
Staff Staff Staff Staff Staff Staff Staff Staff
Supervisor
Assistant Manager
Assistant Manager
Supervisor
Restaurant Manager
8.32 Restaurant Structure & The Effects On the Objectives
The above structure looks at the organisational structure of a McDonalds restaurant, it is also a hierarchy structure but works in a totally different way to the structure of the Head Office. The communication is mainly vertical with lateral communication between the management team. The method of management style used plays a big part in how the structure works and what its effects are on the objectives.
8.321 Achieve Profitable Growth
The structure of the restaurant could help to meet this objective because of the organisational structure used. McDonalds cut down in costs because they only have a small number of people on the management team, and a selected amount of staff that have extra responsibilities and tasks. If they keep their costs as low as possible then this will keep their profits higher. If all of the 29,000 restaurants worldwide used the same kind of structure then the profits will be extremely high.
8.322 be the Best Employer
While in the Head Office this kind of structure benefits employees, the restaurants work very different. Staff do not have much input in what they do and when they do particular tasks, they are told when to do something. In a crucial moment the decision is never left to staff but to t he management. This does waste time.
Working in this kind of structure is very bad for staff morale. Little job satisfaction can come from a job where you have little to know input and where you know you can be easily replaced.
9.0 (E5) Communication
Every business uses external and internal communication, businesses could not survive without communicating so it is important that communication channels are kept up to date. There are many types of communication that businesses could use and different ways in which it could travel. Every method of communication follows the same five-part structure, this is:-
Sender:- for every type of communicating, there has to be a sender
Message:- this is whatever is being communicated
Medium:- this is how the information is communicated, eg... face to face
Receiver:- this is the person who the information has been sent to.
Feedback:- this is the result of the information received.
9.1 Vertical & Lateral communication
One communication channel used by businesses is vertical communication; this is the flow of communication between the different levels of the organisational structure. It can move up as staff raise issues, ideas or feedback to the management, and moves down as management inform the staff on decisions made, new information and instructions.
Lateral communication is the flow of communication throughout the entire organisational structure; the most common structure to see it in is a matrix structure.
Both of these types of communication are extremely important to all businesses as they allow the departments within the business to co-operate to ensure that the business is run efficiently and effectively.
9.2 Formal & Informal Communication
Both formal and informal communication channels are used in a hierarchal structure. Informal communication is usually the communication within the business, such as managers giving staff instructions.
Formal communication is usually when the business communicates with people outside the company such as suppliers. It can also be used internal when a procedure needs to be followed by the guidelines.
9.3 Restricted & Open Communication Channels
Open channels of communication are information that is available for any one to see and have access to. This would mainly affect large groups of individuals with news and information such as administrative information.
Restricted communication is when the information is not for any but for one or a small number of people. This form of a communication channel is mainly used for information like financial, policy or management statements. Also, information on staff will be restricted to just Human resources and a certain number of managers.
9.4 Face To Face & Meetings
Two methods of communicating are meetings and face to face, they are basically the same but meetings usually consists of three or more people while face to face can be two. They can be used to make presentations while face-to-face can be in a conversation. Face to face could also be in situations such as interviews and disciplinary procedures. Its is important that the sender presents themselves in a suitable way and talk in a certain way and tone because they will both be seen and heard, if they do not present themselves correctly then the information could be received wrongly. It is also important that they sender is clear on the information they are giving and demonstrate confidence.
McDonalds use face-to-face and meetings a lot. Every applicant contacted by McDonalds has to have an interview and staff have individual meetings throughout the year with the manager of wherever they work. The directors of McDonalds Head Office USA regularly have meetings, as do all other Head Offices around the world. McDonalds also have an annual meeting; this is broadcasted live on the Internet for any one who's interested to see. Also throughout the year, they hold shareholder meetings.
9.5 Telephone & Fax
Telephones are still an important way of communicating, faxes however, while still in use are being replaced by the much quicker options of e-mails.
When using oral communication, sometimes it is much easier to use the telephone rather then face-face because facial expressions and body language cannot be seen. Also, the majority of people do not present well with people watching them. Telephone communication can be both external and internal.
At one time faxes used to be the quickest and easiest way to send documents worldwide. Although still used, they are being replaced by e-mails, this is due to the fact that fax machines do not cope well small writing, photographs, columns of numbers and colour.
McDonalds use the telephone often for communicating between restaurants and the Head Office of the particular country. The information being communicated is usually things like takings for the day. They also use fax machines to send information on new members of staff.
9.6 Letters & Internal Memos
Letters have always been one of the most popular forms of communicating, although slow and a risk of the letter being lost in the post. It can either be informal, formal, internal or external depending on the situation. A resignation letter would have to be more formal while a thank you letter to supplier could be more informal.
Memos are only ever external and are usually informal. They can either be restricted or open. McDonalds provide a monthly newsletter called McNews to all members of staff. Memos are also sent out if a new promotion is about to start.
9.7 (C3) ICT
ICT is one of the most rapidly growing areas of communicating, in 2000 45% of the USA households had internet access at home, this figure was expected to jumped to 50% by the end of 2001 and 73% by the end of 2005.
With many different ways to get the information across, it is becoming one of the easiest, quickest and cheapest forms of communication with more and more business using it. For McDonalds it is especially important due to its size and accessibility. One of its many useful points is that it allows people to send information across many different time zones without disturbing them, a telephone cannot provide this, also, if the person the information is being sent to is away, they can access their e-mails from any computer in the world, a letter cannot provide this.
A new technology is WAP phones. People are now able to send e-mail and visit selected web pages through their mobile phones.
Below is a list and description of the different methods of communicating using ICT.
9.71 E-Mails
E-mails are becoming one of the easiest ways for businesses to send information. It can be used for internal communication or to inform customers or new products, it is a restricted channel of communication. With over half of the UK population with an e-mail address this is a new and effective way of advertising. One of the benefits of e-mail is that it is almost instantaneous communication. Photographs, video clips and scans of documents can also be sent, and soon signatures sent by e-mail will become legally blinding. The downside of e-mail is that the security is not always tight and it is possible for others to read unprotected mail.
McDonalds use e-mail within the company to let others know of information. E-mail has proved to be a massive benefit to McDonalds to let all Head Offices around the world know the vital information; it is quick and accessible to the receiver.
McDonalds also use e-mail to inform shareholders, prospective shareholders, and any one interested in McDonalds to be notified of news and information on McDonalds as it happens. People signed to this service receive this information via e-mail.
9.72 Websites
Websites are used as an external method of communication; they are open to anyone. With over 11 million websites last year; websites are a useful tool to get offers, products and services seen and many business are setting up websites for this very reason. McDonalds has many websites, its main one is www.McDonalds.com, the UK website is www.McDonalds.co.uk. It also has websites for Australia, Japan and many others. All of the websites provide information on the food and services offered for the particular country as well as facts on McDonalds. The USA website also has investor information. People can also send in their CV to the American Head Office via the website. Another feature offered is sending in your comments and questions to McDonalds; the only problem with this is that you must have an American address.
9.73 Business uses
ICT has improved the efficiency of many processes and functions involved in businesses. Some of these are:-
Checking:- Most word processing programs now have spelling and grammar checks to ensure that documents are accurate before being read. McDonalds may find this useful when writing letters
Recording Information:- Records are now easier to store, protect and access and are not as untidy and space consuming as filing cabinets. The Human Resources department is just one function that can benefit from this as they can save all employee records onto the computer.
Personalising:- When writing a letter to many people, Mail merging is useful for personalising the letters rather then addressing them Dear Sir/Madam. It also saves in having to write in every ones name which would be a very lengthy and tedious task if writing to many people like shareholders.
Communicating:- The most common forms of communicating using ICT are e-mail, fax, telephone conferencing and video conferencing
Stock Control:- New bar code technology means that McDonalds can find out how many of a specific item a restaurant has to ensure replenishment
Presentations:- Shareholder meetings can be presented in slide shows and OHP slides, this will be useful in showing the rise or fall of profits.
9.74 Software
Software packages available today are beneficial to many companies, some of the ways in which these packages can help is:-
Word Processing:- Documents can be made using templates, (eg.. when writing a reply to a customer complaint) saving time. They can be edited and personalised accordingly.
Desktop Publishing:- Much more sophisticated then word processing programs. Promotional leaflets can be designed on these types of packages.
Databases:- Used to store information on, useful for keeping information on shareholders, employees and suppliers etc...
Spreadsheets:- Spreadsheets can accept calculations, formulae, numbers and letters, can keep track of figures and budget targets. Also useful for producing future sale patterns.
Graphics:- useful for designing logos or enhancing presentations.
0.0 (E6) Quality Systems
All organisations that sell products directly to the customer need to ensure that their products are of the highest quality; there are many reasons for this such as: -
Businesses have to be certain that the products they are offering are at a better quality then those offered by competitors.
So that customers get to recognise that the product being of a high calibre, so they come back again and again.
If the product is faulty, they will lose money on reducing the item and offering another product or compensation as an apology.
For many businesses, they place quality control points along various stages of production. McDonalds have to be certain that their meat is not contaminated before selling them.
One of the first checks they most do is that the meat has not reached its expiry date or that it is not rotten. This needs to be done in both the factory and in the restaurant. Staff within the restaurant most be certain that the food is ok to be cooked. Meat left out is not allowed out must be chucked out if it is.
Before McDonalds buy the meat from the suppliers, they check records taken from blood samples of the animals being sold to them to see if they are not contaminated.
In the factory and restaurant, checks must be made to see that there are no foreign bodies in the product.
By following all of these procedures and anymore that may exist, McDonalds can safeguard their profits and reputation. Because it is actually illegal to sell stale meat, McDonalds could lose a substantial amount of money after paying compensation.
0.1 Quality Control
Quality control is the process of checking the products at various stages of production to ensure that nothing has gone wrong. Traditionally, this was carried out by a sole quality controller, now more and more businesses are installing key points along key points of the production and asking staff members to check the products at these points.
1.0 Bibliography
. www.mcdonalds.com
2. www.mcdonalds.co.uk
3. www.185red.com/docs/video_passe.pdf
4. http://nimbus.ocis.temple.edu/~ychoi/mcdonald.html
5. www.bized.ac.uk
6. McDonalds Education Service- Fact File 1998 and 2000
7. Hodder Vocational A-Level- Business
8. The Times 100- Edition 6
2.0 Appendices
. McDonalds Organisational structure information
2. Internet access in America Survey
3. Changes to McDonalds management team
4. McDonalds Objectives
5. Franchise Information
6. Franchise Information
7. Franchise Information
8. Franchise Information
9. UK Financial Profile
0. Is McDonalds part of a group of companies?