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.

Authors Avatar
.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.
Join now!


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, ...

This is a preview of the whole essay