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McDonald'sThe purpose of this paper to analyze the organization through its goals, origins, stakeholders, structure, culture, technology, processes, outputs and environmental forces

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McDonald's The purpose of this paper to analyze the organization through its goals, origins, stakeholders, structure, culture, technology, processes, outputs and environmental forces. All these factors are important for each organization as for an open system and its success depends on them. At the same time each company uses different management strategies when developing, growing and coming to different life cycles. Drawing on McDonald's management strategies we'll be able to understand and make some conclusions about McDonald's as a mature organization. We'll point out the strategies which are the most important for the company's growth and development, the ones which are the most emphasized in the company's policy. "The basis for our entire business is that we are ethical, truthful and dependable. It takes time to build a reputation. We are not promoters. We are business people with a solid, permanent, constructive ethical program that will be in style...years from now even more than it is today." - Ray Kroc, 1957. Origins McDonald's roots go back to the early 1940s when two brothers opened a burger restaurant that relied on standardized preparation to maintain quality-the Speedee Service System. So impressed was Ray Kroc with the brothers' approach that he became their national franchise agent, relying on the company's proven operating system to maintain quality and consistency. Over the next few decades, McDonald's used controlled experimentation to maintain the McDonald's experience, all the while expanding the menu to appeal to a broader range of consumers. ...read more.


The supplier's work closely with McDonald's to develop and improve products and production techniques. This close interdependency is described as a three-legged stool principle, and involves McDonald's, the franchisees and the suppliers. Suppliers that are able to meet the quality standards set down by McDonald's have been able to share in the growth and success of McDonald's. McDonald's is the largest food service company in the world. In 1993, annual sales stood at 23 billion dollars. It is also one of biggest employers in the United States, with over half a million workers. Only fifteen to twenty per cent of the restaurants are actually company-owned. The rest are franchises, run by 2,659 independent owners who pay a fee of between $400,000 and $700,000 for a franchise. McDonald's licensing department handles the fee structure on a case by case basis, and there are a wide variety of license fees determined by property and equipment costs. A skilled franchisee can earn a sex-figure income from a single restaurant; most own 2 or more restaurants. McDonald's are structured along functional lines. Their Chief Executive oversees five major areas of activity: * Operations (equipment and franchising) * Development (property and construction) * Finance (supply chain and new product development) * Marketing (sales marketing) * Human Resources (customer services, personnel, hygiene and safety) Culture McDonald's Corporation is an organizations which have been described as possessing strong cultures (Mintzberg, 1979; Roberts & Hunt, 1991). ...read more.


The market is well saturated, and it would difficult to achieve double-digit growth. Other concerns are a newfound emphasis on healthier eating. Most of McDonald's most popular fare probably in some small way contributes to the increasing incidence of cancer, heart disease, and diabetes among the population. But I feel the key threat to McDonald's continued success is its very ubiquity. Because McDonald's are everywhere, the dining experience is never special. And as Baby Boomers age and become more affluent, it is likely that they will leave behind their fast-food ways, if only to step up to moderately priced restaurants like Olive Garden, Bennigans, and Pizzeria Uno. These chains have the added advantage of serving higher-margin alcoholic drinks. McDonald's, meanwhile, has to continually battle Burger King and Wendy's, which leads to an erosion of margins for everyone. Even alliances with toy manufacturers, while popular with consumers, do little for the bottom line because the cost to run these promotions can be quite expensive. Conclusion McDonald's places emphasis on the training and development of its employees. They aim to provide career opportunities for people to achieve their potential. The firm offers both full and part-time career opportunities, which helps staff to combine work with family or educational commitments. Job progression is used to encourage employees who got their first job in the company to progress to management positions. These promotions are based on the performance of the staff member. Over 40% of McDonald's managers started as hourly-paid staff members in the restaurants. Over half of the company's middle and senior managers have moved up from restaurant-based positions. ...read more.

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