The main differences I am going to look at are the management styles related to each of the companies.

Introduction

This report is looking at the key differences between the two companies that I have been independently researching. The main differences I am going to look at are the management styles related to each of the companies. It also looks at the different structures within the company such as the hierarchy of the company and the range of managers. Ethics is also going to be a key difference between the following companies as they have very separate ideas of what are good/bad behaviors for a business. Both companies are worldwide and well-recognized businesses with thousands of employees and multimillion-dollar profits.

Company X

In 1975, two teenage friends formed a company. It sold a form of computer language for a self-assembly kit computer based upon Intel processors. The friends were Bill Gates and Paul Allen, they named the company Microsoft. Revenues and profits rose dramatically in the early years. Windows 95 was what really put Microsoft on the map as they started to make billions of dollars in profit each year. Now Microsoft is one of the most profitable companies in the world and Bill Gates is the wealthiest man in the world! Microsoft is now installed in nearly all computers around the world; personally I have never been on a computer that isn’t being run by Windows. That gives you an idea about how big Microsoft really is. Another big issue that concerns Microsoft is the fact that on your average high street there will not be a Microsoft shop. There are not many Microsoft shops in the whole of the U.K. but it is used in nearly every large companies and shops in the world. The Microsoft headquarters are found in the USA but also have separate smaller headquarters around the world.

Company Y

McDonalds is the world leading food services in the world today; it has 30,000 restaurants in 119 countries and serves 47 million customers each day of the week. It is also one of the most well recognized companies such as Microsoft. It all started in 1955 a good 20 years before the likes of Microsoft. McDonalds is a franchised company meaning a different person owns each restaurant but all have to pay McDonalds main company at one time or another. They’re about 2,800 employees under the McDonalds name. The headquarters for this company is just outside Chicago, in Oak Brook. Each country has its own individual headquarters but all report back to the one in Oak Brook. Even though these two companies seem the same they are very different in how they are run and the ethics they take. People will be more familiar with McDonalds and the management style and employees related to them.

Structure

Both Microsoft and McDonalds use very different approaches to structuring their business.

McDonalds is a fast food chain that has the majority of its employees on minimum to just above minimum wage. These are the people at the bottom of the McDonalds hierarchy they work as the cashiers but are theoretically just as important as the people right at the top of this hierarchy.

Since each restaurant is franchised then there is a miniature hierarchy inside the main McDonalds hierarchy. This is very different to how Microsoft works they have a much larger ...

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Structure

Both Microsoft and McDonalds use very different approaches to structuring their business.

Since each restaurant is franchised then there is a miniature hierarchy inside the main McDonalds hierarchy. This is very different to how Microsoft works they have a much larger but flatter hierarchy. Bill Gates is right at the top of the hierarchy but below him is a large layer of the people working for him and each one of them has a larger amount of people working for them.

The reasons for this is different for each company, McDonalds has a tall hierarchy because of the many different stages there are to achieve in the company. Such as when an employee first starts there they are right at the bottom. Through time they can achieve promotion up the hierarchy. Though for the first four promotions the worker is still on the shop floor either on the tills or cooking in the back. This is the reason the hierarchy grows large. There are still 3 levels of the hierarchy left in one restaurant after the 5 on the shop floor meaning on average 8 in each restaurant.

The advantage of this high structure for McDonalds is that some managers only look after 5 people or less and find it easy to keep them hard working. Also people have a closer eye on each worker and see both their good and bad points.

The disadvantage is the workers can get confused about who they should be taking their orders from. Also communication form the top very rarely gets to the bottom without being change. Much like Chinese whispers. So sometimes the wants of the person at the top take a lot time to be put into action by the people at the bottom. Another problem is that they reduce the opportunities for promotion making staff much less motivated than they could be.

The reason a flat hierarchy for Microsoft is due to the fact that they keep everything on the small side. This works well because although they have a very large headquarters with a large flat hierarchy, outside of this there is not really anything that contains a need for a the hierarchy

So because it is flatter this means there is greater communication, which is a lot more efficient. The disadvantage of the flat structure is sometimes one worker could be in command of over 20 workers. This is hard to keep discipline and hard work amongst the workers. Regular meetings will have to be called to make sure all the workers know precisely what they are doing and achieve it at a respectful rate.

Management Styles

There are two main management styles these are what McGregor believes, theory x and theory y management. But aside from these there are four management styles that fit into those 2 and are adopted by people and companies around the world. These are autocratic, democratic, paternalistic and laissez-faire management. Microsoft and McDonalds both show different types or management styles.

At McDonalds there is only really one type on management and that’s a theory x. So the managers are generally autocratic, this means people get told what they have to do rather than asked or have a choice. E.g. the manager would ask a cashier to work on the till for 5 hours and the cashier doesn’t really have a choice. This is because the work that has to done is unskilled so no qualifications are needed meaning people don’t work where they are best in the company they work were they get told to work.

This type of management is very bad for morale in the workforce which is what explains McDonalds high staff turnover rate. People tend to work less efficiently at jobs they don’t like and this is true of McDonalds staff because they work for pay, not job satisfaction. Managers being demanding on people that don’t really want work there means it doesn’t take long for people to have had enough then leave.

This is a totally different type of management to what is used at Microsoft. At Microsoft the managers are more theory y mangers. They adopt a democratic style of management, meaning they let the workers become a lot more involved in where they should work and decisions in the company has to make. At the end off all this the highest in the hierarchy will make the final decision based on what was discussed. The managers let people do what they want to do as long as it’s in the right direction. Another reason the managers are democratic is because people like to work at Microsoft as they really enjoy it and have trained and worked to be there, unlike McDonalds. This means an autocratic style is not needed to make people work hard. Also as the jobs are a lot more technical there only certain people for each job meaning they work at what they are best at and then all group together to finish a certain product. E.g. Windows 2000 had hundreds off people working on it every day but certain people had certain things to do. Such as one department would just work on the starting up and closing down of Windows for home use. Where as another department would work on Microsoft Office.

Business Ethics

Ethics refers to a code of morally correct behavior, which a lot of businesses like to think they follow closely. This can be many different things; some companies such as Body shop stock everything they believe to be morally right. E.g. against animal testing. Whereas other companies think its more about ethics in the business environment such as employee rights and ethics towards other companies. Microsoft and McDonalds both have the same goal at heart and that’s to make a big profit. How they go about it could be very different for some companies.

McDonalds boasts a lot of charity work on their website and it boasts in its adverts a lot about less salt and the more healthy options. And true charity work is ethical by a TNC (Trans National Corporation). But the question asked is does McDonalds do this because they are thinking about people’s welfares or because they want to make money.

Microsoft also does a lot of charity work for the less fortunate them themselves. But you also have to ask the question weather bugs are purposely put into their programs so you buy add on packs making them more money.

Both McDonalds and Microsoft have to cover the ethics that are in the law such as the human rights act (2000) because they have to. An ethical business would go further than they have to.

Microsoft from research has proved to be an ethical business it not only looks after its employee’s really well but thinks about the needs for people when they make their products. They do everything by the book from looking at there website.

McDonalds also looks like a ethical business although it doesn’t look after its employees as well as Microsoft does, it doesn’t seem to exploit them like other companies do. A lot of people in the USA have complained that eating McDonalds makes them fat but they can’t really use this as an excuse. Because they have control of there own bodies and McDonalds isn’t acting in an unethical manor to make them eat their food.

Conclusion

This report has looked at three aspects of Microsoft and McDonalds and compared them against each other. From this it has shown differences and similarities in its results. There seem to be more differences between the companies than similarities although from what can be seen there will not be many companies that act similar to Microsoft. Its seems to me that Microsoft stands alone as a mega company.

McDonalds is worldwide but Microsoft will be used in nearly every computer system in the world and have even brought out their own console that is doing very well.