Organisational functions.

• Sole trader (1 owner)
• Partnership (2-20 owners)
• Private limited company (2 – unlimited number of shareholders)
• Public limited company (2 – unlimited number of shareholders
• Co-operative (owned by 2 or more co-operators)
• Not – for – profit or a Charity
• Franchise (owned by one or more franchises)

Business objectives

The main reasons for businesses to exist are to provide ‘ goods and services ‘.

All businesses whether they aim to make a profit or not, have to make products and/or provide services that satisfy customers’ wants or needs. Objectives are set to govern the way of functioning. A few objectives are;

• Making a profit (or surplus)
• Increasing sales or market share
• Surviving
• Providing services to the community
• Offering charitable or non-profit services, such as caring for the environment
• Developing staff – skills
• Producing high quality products or offering high quality services

Organisational structures

It is defined as the pattern of work roles and ways of administering the organisation that are relatively stable and change only slowly. It’s like a protocol, a pattern that is set for the organisation to follow and function.

Businesses are structured in different ways according to the ways they operate and function and according to their culture. Different types of organisational structures are;

• Tall
• Flat
• Matrix
• Hierarchical
• Centralised
• Decentralised

Cultures

It is a set of Shared Beliefs or Norms, which influence behaviour. The term ‘ Cultures’ is used to describe the typical approach within an organisation. It refers to the personality of an organisation, the shared beliefs and policies and procedures that determines the ways in which the organisation and its people behave and solve business problems. Every type of organisation has it s own culture.

A culture distinguishes one thing from another. Cultures are concerned with the way in which people in the organisation interact with each other. Basically they are the characteristics that characterise an organisation. E.g. patterns of behaviour in an organisation. There are different types of cultures.

Types of Organisational Cultures

Power Culture

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

The power in the centre is the key feature of the power culture.  A culture like this is mostly found in small firms where a single person or a tiny group of individuals have control.  In organisations like this quick decisions are made to different circumstances thus enabling it to react quickly to threat or danger.

Power culture also exists in large organisations as well.  

Role Culture

This culture mainly exists in a large organisation where every member has it s own particular role to carry out.                                                                                                                                                                                                                                                                                                                                                                           The Role Culture

Power is hierarchical and derived from the employee’s position in the organisation.

The strength of the firm lies in the pillars or functions. Within the function the employees have different ‘ job descriptions’ and defined communication procedures.

Position in this culture is the main source of power and ‘rules and procedures’ are the main source of influence.

Task Culture

Task cultures have become very important in a business. Many people work in teams together, combining to complete projects or task together. Hence the word task is derived to describe this culture.

In this culture team spirit is important. Every one in a team has to share their views and ideas. They will also need to be valued by the organisation they work for.

Person culture

Here individuals are central. They are most likely to be found in co-operatives and not-for-profit organisations such as charity and voluntary organisations. In this culture hierarchies are impossible except by mutual consent.

An individual may walk out of the group but the organisation does not have the right to evict the person.

                                                                                                                                                                                        

Management styles

Management style is the method of management role carried out by a person over a certain period of time. The most common management styles are;

Autocratic management style is one where the manager is used to giving instructions                                                                           – telling people what to do rather then listening to their opinions. It’s like orders that have been told to follow by the General in an army.

Consultative managers are the ones who consult other people before coming in to a decision. Alternatively, they will seek to consult people before implementing a decision.

Democratic management style is one where there is empowerment. Individuals and teams are given the responsibility to make decisions within the given framework. The team is then held accountable for the decisions they make.  A manager who would follow this style would find it comfortable allowing others to make decisions.

Report on McDonalds

MISSION STATEMENT

‘To be the UK’s best quick service restaurant experience’.

In October 1974 McDonalds opened its first restaurant in the UK. Nowadays it can be found on high streets, alongside major roads, in leisure and retail parkas and even at airports.

AIMS

McDonalds aims to;

• Become synonymous with helping young people in need.
• Contribute 1% of the pre-tax profits to the community.
• Give emphasis to initiatives, which operate in the community at grass root levels.
• Provide premises, products and people to support the community and charitable fundraising. Examples of fundraising activities which took place last year are, leg waxing, football matches and a walk from the McDonalds at the High Street in Ipswich to the one in Felixstowe. All this was done for charity.
• Encourage its employees to volunteer in these kinds of activities while using company time and facilities where appropriate.
• Be active members of the business organisation.
• Regularly monitor and review community involvement activities.
• Tell stakeholders about the Company’s community activities.

SO WHAT TYPE OF BUSINESS IS McDonalds THEN?

In Ipswich, McDonalds is owned by a franchisee, Mr.Mark Davis. He has actually brought the company from the original organisation in the USA. He can actually do anything with the company if he wants. He decides what time the stores should remain open until in the night. Or whenever there is not much business in McDonalds and if the money got in from the few customers is lesser than the costs of running the store, like the electricity, for the day then he would come to a decision of when to close the shop.

But one thing he can’t do is to sell his own items in the store. Because the restaurant has the McDonalds trademark on it and so it is whatever the McDonalds head office decides to sell can be sold.

Management Style

McDonalds follows the Autocratic management style. The Floor Managers tell the employees what to do and how they should do.

RECRUITMENT AND EMPLOYMENT

There are about 1,200 McDonalds restaurants operating in the UK, representing a total investment in property and equipment of over £1.7 billion. The company employed 48,000 people and over 25,000 more were employed by McDonalds franchisees. 66% of the employees are students aged between 16 and 21 years of age.

FOOD AND CONSUMPTION

• In the UK food and beverage is provided to around 3 million people everyday.
• McDonalds menu concentrates on 5 main ingredients: beef, chicken, bread, potato and milk, which account for £225 million of food expenditure.

OPERATIONS

• McDonalds is the leading global foodservice retailer, with more than 30,000 restaurants serving more than 46 million people each day in 121 countries and territories.
• Approximately 80% of McDonalds worldwide restaurants are owned and operated by independent. In Ipswich McDonalds is owned by one franchisee – Mr.Mark Davis.

INTERNAL COMMUNICATION

INTRANET

Launched in the year 2000,McDonald’s UK Intranet provides a fast and up-to-the-minute source of information for McDonalds restaurant management and office staff. It is a single point of reference for administrative requirements, news and marketing materials.

McNEWS AND MDUK 

McNEWS was the award winning magazine published bi-monthly for all restaurant staff. In 2002, McNEWS was relaunched as MDUK  - a people-focused magazine, activities and events from restaurants around the country.

Other types of communication

• An email system operates in all offices and company - owned restaurants.
• Regular staff communication sessions are held in the offices.
• For every employee a PR, i.e. a personal review is held to see how the employee is performing in the organisation. This takes place once every two months.
• If the management staffs have something to inform to the crewmembers then they would put the information on the bulletin board so that every employee who passes by could surely read it. This is one important way of communication. An example of this is a Crew Meeting, held every month.
• If employees need a different or a holiday on the coming week then they could just write it down in the Request book.

FOOD STANDARDS

McDonalds is committed to maintaining and developing the best food products in the quick service restaurant market. In order to deliver on this, the Company has made a number of other commitments to: food safety, food quality and nutritional values.

FOOD SAFETY POLICY

McDonalds first priority is always the health and safety of its customers. They have also developed their own Food Safety Policy. These are;

• All raw materials delivered to McDonalds restaurants must be consistently produced to the highest standards of hygiene and safety.
• Company systems and procedures must be continuously updated to ensure the highest standards of food hygiene for all customers at all times.
• All staff receive proper supervision and training in food safety.
• The equipment used must be the most appropriate for the need of each restaurant, and must be carefully maintained and calibrated.

In McDonalds all employees must use gloves while touching red meat otherwise they are taking their own risks of being sacked. That’s why newcomers are trained as much as possible on healthier and cleaner handling of food. They are also trained to add salt to the meat whilst cooking.

FOOD QUALITY

McDonalds is committed to serving hot, fresh, great tasting, great value food to all its customers, every time they visit their restaurant. In McDonalds if the customer feels that their food is a bit cold then all they have to do is come to the counter and exchange it for a fresh hot one. This shows that McDonalds has great care while handling food to customers. If a food gets cold, it has always been McDonalds to discard it in the bin and this is followed every time. So they look towards satisfying the customer.

They believe that food quality begins at the very first link in the supply chain, whether this is dairy herds, lettuce seedlings or the flour used to make the buns. This strong commitment stretched across to every store in the UK.

McDonalds has a highly trained team of Quality Assurance Professionals, whose job includes verifying the Company’s supply chain through audits and site visits.

NUTRITION POLICY

McDonalds recognises the important relationships between a balanced diet and a healthy lifestyle.

In 1984 McDonalds was the first company to publish detailed nutritional information on all its core menu items. This has continued even today. Nutrition values for the varieties of food provided from McDonalds can be found either in the restaurant or excessive information is found in the website, www.mcdonalds.co.uk.

McDonalds had made a number of changes to the menu in recent years for nutritional reasons:

• Lard has been replaced in buns with a smaller quantity of vegetable oil.
• Mineral water, pure orange juice, diet Coke and cartons of semi-skimmed milk

     are available in all restaurants.

• A low calorie sweetener is available as an alternate to sugar.
• The formulation of sandwich sauces has changed to reduce oil levels.
• The cooking oil has been changed to reduce the saturated and trans-fatty acid content.

Recently to help customers have a balanced diet, McDonalds have introduced a new item to their menu – Pasta Salad.

A copy of the Investors Press Release as of February 2003

        Investor Release

FOR IMMEDIATE RELEASE        

03/12/03        

        

McDONALD'S REPORTS FEBRUARY 2003 SALES

OAK BROOK, IL – McDonald's Corporation announced today total Systemwide sales for February 2003 increased 4% to $3.1 billion over February 2002 (in constant currencies sales declined 1%).  Total Brand McDonald’s sales for restaurants in operation at least 13 months (comparable sales) declined 4.7% in constant currencies, compared with a 0.4% increase in February 2002.

        Chairman and Chief Executive Officer Jim Cantalupo said: “I remain confident that we have the right team in place to aggressively confront our challenges and revitalize our business, despite current sales performance.  U.S. February sales were impacted by the sluggish U.S. economy and severe winter weather.  In Europe, we continued to face economic weakness in certain markets along with unfavorable weather conditions and strong prior year comparisons.  We will discuss the factors behind these results in greater detail in conjunction with our first quarter earnings release.”

        *        Information in constant currencies excludes the effect of foreign currency translation on reported results, except for hyperinflationary economies, whose functional currency is the U.S. Dollar.  Constant currency results are calculated by translating the current year results at prior year average exchange rates.

  **   Comparable sales represent the change in sales from the same period in the prior year for restaurants in operation at least thirteen months.

        ***        Asia/Pacific/Middle East and Africa

        n/a        Not applicable

        

BIBLOGRAPHY

Heinemann AVCE Text Book

McDonalds Student Information Pack

www.mcdonals.co.uk