Mc Donald’s

Organizational
Effectiveness in
the light of
different
approaches
 TABLE OF CONTENTS

1. Organizational effectiveness & what makes an

organization effective
2. About Mc Donald’s
3. Organizations are social system in context with Mc
Donald’s
4. Structure & Design of Mc Donald’s
5. Goal Attainment Approach
6. The Systems Approach
7. Competing Values Approach
8. Strategic Constituencies Approach
9. Mc Donald’s as a people’s organization
Organizational Effectiveness and what makes an organization effective
It refers to the ability of an organization to achieve its goals and objectives in
an efficient and successful manner. It is the extent to which an organization
can use its resources, capabilities, and strategies to produce desired outcomes
and maintain its competitive advantage. An effective organization can adapt to
changes in its environment, meet customer needs, and deliver value to
stakeholders.
Factors that make an organization effective are:
➢ Strong Leadership: Effective leadership provides direction, motivates
employees and inculcate a positive work culture along with empowering
their team.
➢ Competent Workforce: A talented workforce drives in innovation and
productivity for the organization, trained, skilled and motivated
workforce helps in achieving organizational effectiveness.
➢ Adaptability: Organization that wants to become effective must adopt
the changes to survive in a long term because change is the only
constant.
➢ Defined mission and vision: Clarity in mission and vision helps to take
decisions strategically and this strategy helps to align the employees
towards achieving common goal.
➢ SMART Goals: When the organization is having SMART goals, working in
the direction to achieve the specified goal becomes easy as every
employee believes that it can be achieved.
➢ Effective Communication: Open and transparent communication
channels enable the flow of information, feedback, and ideas across the
organization.
➢ Evaluation of Performance: Measuring performance with the help of
KPIs, helps an organization identify areas for improvement and what else
is needed to be done to achieve the goal.
➢ Effective use of resources: Utilizing resources efficiently and optimizing
cost structures allows an organization to operate effectively and remain
competitive.
➢ Efficient Structure: An effective structure ensures clear communication,
streamlined decision-making, and optimized resource allocation
 Mc Donalds
McDonald's Corporation is an American multinational fast food chain, founded
in 1940 as a restaurant operated by Richard and Maurice McDonald, in San
Bernardino, California, United States. They rechristened their business as
a hamburger stand, and later turned the company into a franchise, with
the Golden Arches logo being introduced in 1953 at a location in Phoenix,
Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise
agent and proceeded to purchase the chain from the McDonald brothers.
McDonald's had its previous headquarters in Oak Brook, Illinois, but moved its
global headquarters to Chicago in June 2018. McDonald's is also a real
estate company through its ownership of all restaurant locations. Mc Donald’s
is the leading hamburger fast food chain with more than 34000 restaurants in
119 countries. More than 80% of Mc Donald’s restaurants are owned and
operated by franchisees, which decreases the risk associated with expansion
and ensures long term tenants for the company. Mc Donald’s serve 70 million
people each day and promises an easy and enjoyable food experience for its
customers. It increases its customer base through global growth and product
expansion. The successful introduction Mc Cafe also helped in competing with
companies like Starbucks, Dunkin’ Donuts, etc. It also treats its employees very
well and some of the practices which it continues are:
• Fair Employment Practices: McDonald's typically adheres to local labour
laws and regulations, providing equal opportunities for all individuals
regardless of race, gender, religion, or any other protected
characteristics.
• Employee Benefits: Full-time and sometimes part-time employees may
be eligible for benefits such as health insurance, retirement plans, and
paid time off. Again, the availability of these benefits may differ based
on local laws and regulations.
• Workplace Safety: McDonald's places a strong emphasis on ensuring a
safe work environment for its employees and customers. They
implement safety protocols and guidelines to prevent workplace
accidents.
• Training and Development: McDonald's often invests in employee
training and development programs to improve skills, customer service,
and overall job performance. They may offer training on food safety,
customer interaction, and other essential aspects of the job.
There are also some criticisms of Mc Donalds:
• Environmental Impact: McDonald's has faced criticism for its
environmental impact, particularly in relation to packaging waste and its
contribution to plastic pollution.
• Animal Welfare: McDonald's has been under scrutiny for its sourcing of
meat and eggs from suppliers that allegedly engage in practices that
raise concerns about animal welfare.
McDonald's has been involved in a number of lawsuits and other legal cases,
most of which involved trademark disputes. The company has threatened
many food businesses with legal action unless it drops the 'Mc' or 'Mac' from
trading names.
McDonald's is a brand, with devoted fans who appreciate its convenience and
familiar offerings, while others voice concerns about its impact on public
health, the environment, and labour practices.
 Organizations are Social System in context with Mc Donald’s
The relationships among individuals and groups in an organization create
expectations for individuals’ behaviour. These expectations result in certain
role that must be performed. Some people must perform leadership role while
others must be the participant of followers. Especially middle level managers
perform both the roles very well. Organizations have systems of authority,
status and power and people in organizations have varying needs from each
system. Some of the roles and activities performed by Mc Donald’s are as
follows:
• McDonald's has a hierarchical structure that outlines roles and
responsibilities. There are different levels of employees, from crew
members to store managers, regional managers, and corporate
executives. Each level has specific functions and authority, and
communication flows up and down the hierarchy.
• It has a set of shared values and principles that define its organizational
culture. These values might include customer focus, quality service,
efficiency, and consistency across its restaurants worldwide.
• Social interactions occur among employees at various levels. Teamwork
is essential in the fast-paced environment of a restaurant, where
employees need to collaborate to deliver orders efficiently.
• It implements feedback mechanisms, such as customer surveys and
employee evaluations, to gather information about customer
satisfaction, employee performance, and areas for improvement.
• It also has a social impact on the communities it operates in. It creates
job opportunities, contributes to local economies, and engages in
various corporate social responsibility initiatives.
• The company uses various communication channels, such as face-to-face
interactions, digital communication, and formal meetings, to facilitate
information exchange. Effective communication is vital within
McDonald's.
 Structure and Design od Mc Donald’s
The structure and design of an organization refer to how various roles,
functions, and processes are arranged to achieve the organization's goals. It
has a well-defined organizational structure and design.
Structure & Design:
• Hierarchical Structure: McDonald’s follows a hierarchical organizational
structure. It is a top-down approach where authority flows from the top
management to lower levels.
• Functional Departments: It organizes its activities into functional
departments, each responsible for specific functions like marketing,
operations, human resources, finance, and supply chain management.
• Division of Labour: Each employee has specific responsibilities and tasks
to perform within the organization.
• Geographical Structure: McDonald's also employs a geographical
structure. It establishes regional divisions based on geographical
locations, each with its management and operational team.
• Customer-Centric Approach: McDonald's organizational design is tailored
to provide quick service and meet customer needs efficiently. The layout
of restaurants, the menu design, and the speed of service are all geared
towards enhancing the customer experience.
• Standardization: standardization ensures consistent quality, customer
experience, and efficient operations.
 Goal Attainment Approach

• Clear and specific objectives: McDonald’s sets clear and specific objectives
that are in line with the company’s mission and strategic goals. These
objectives include:
Increasing sales
Increasing market share
Increasing customer satisfaction
Enhancing employee training
Launching new menu items
• Performance measurement: McDonald's continually tracks and evaluates its
performance against its set goals. KPIs (Key Performance Indicators) relating
to sales growth, consumer feedback, operational efficiency and employee
productivity are tracked on a regular basis to measure progress.
• Strategic resource allocation: McDonald’s strategically allocates its financial,
human and technological resources to support its goals. The correct
allocation of resources ensures that resources and investments are focused
on initiatives that contribute to the achievement of the goals.
• Optimizing processes and operations: The Goal Attainment Approach
focuses on improving efficiency and productivity within McDonald’s. This
includes streamlining processes and operations, adopting technology
solutions and improving service delivery.
• Employee Engagement & Motivation: McDonald’s puts a lot of emphasis on
engaging and motivating its employees. Employees who are engaged and
motivated are more likely to make a positive contribution to achieving
goals. McDonald’s has training and development programs in place,
recognizes and rewards excellent performance, and has a positive work
culture that encourages employees to be engaged and engaged.
• Customer Focus: Customer needs and expectations are at the heart of
McDonald’s goals. It is essential to understand customer preferences and
feedback, and to align products and services accordingly.
• Adaptability & Flexibility: Goal Attainment Approach invites McDonald’s to
be flexible and adaptable. It is important for the organization to be able to
adjust strategies and approaches when needed to stay on track with its
goals.
• Strategic Planning: McDonald’s develops detailed strategic plans that
outline the specific actions and initiatives that will help the organization
achieve its goals. The plans include timetables, responsibilities,
performance measures, and alignment across the organization
 The Systems Approach

• A holistic view of the organization: McDonald’s takes a holistic approach

to all aspects of its operations. The organization is a system with many
interdependent parts. This holistic view allows McDonald’s to see how
changes or choices in one part of the organization affect other parts of
the organization, such as other parts of the company’s supply chain,
labour force, technology, finance, and more.
• Input-process-Output analysis: In order to gain a better understanding of
how resources, labour, and finance are transformed through McDonald’s
processes to deliver goods and services to customers.
• Feedback mechanisms: As part of its continuous improvement process,
McDonald’s uses feedback mechanisms to continually monitor and
evaluate performance. Feedback could be from customers, employees,
sales, and other operational metrics. Feedback helps identify areas of
improvement and allows corrective action to be taken.
• Interdepartmental collaboration: McDonald’s encourages collaboration
and coordination between departments and functions throughout the
organization. This allows each part of the system to work together
toward shared goals and objectives.
• Adaptability and resilience: McDonald's places a high emphasis on
adaptability and resilience. By understanding the environment and
market trends, McDonald’s can adjust strategies and approaches to stay
ahead of changes and challenges.
• Optimizing subsystems: Analyzing and optimizing various subsystems
within McDonald’s, including supply chain management (SCM),
customer service (CMS), and marketing (MTV), helps to improve overall
organizational effectiveness.
• Continuous improvement: Recognizing bottlenecks and inefficiencies, as
well as areas for improvement, allows McDonald’s to continually refine
processes and performance.
 Completing Values Approach
• Clan Culture: McDonald's has a strong emphasis on hand training,
cooperation, and a proactive working environment. The company
invests in hand development and engagement programs, promoting a
sense of belonging and fidelity among its pool. This helps produce a
positive organizational culture and enhances hand provocation and
commitment.
• Adhocracy Culture: McDonald's show rudiments of adhocracy culture
through its focus on invention and rigidity. The company continually
introduces new menu particulars and responds to changing consumer
preferences and trends. The capability to experiment and checking
original requests reflects an adhocracy exposure.
• Market Culture: McDonald's is known for its request- driven approach.
The company places significant emphasis on achieving results, client
satisfaction, and brand recognition. Its marketing sweats, elevations, and
competitive pricing strategies reflect the significance of request-
acquainted values in the association.
• Hierarchy Culture: McDonald's operates a well- structured hierarchical
association with clear places and liabilities. The company's standardized
processes and functional effectiveness are a testament to the influence
of scale culture. The thickness and uniformity in its operations across
global locales demonstrate a strong focus on control and stability.
 Strategic constituencies Approach
• Customers: McDonald's places a strong focus on customer satisfaction
and experience. The company constantly innovates its menu, adapts to
changing consumer preferences, and invests in customer service training
for employees. This customer-centric approach has contributed to
McDonald's ability to attract and retain a large customer base
worldwide.

• Employees: McDonald's acknowledges the importance of its employees

as a crucial strategic constituency. The company offers training and
development opportunities, competitive benefits, and career
advancement prospects

• Suppliers: McDonald's works closely with its suppliers to ensure

consistent quality, safety, and reliability of ingredients. Maintaining
strong supplier relationships is vital for the company to maintain its
brand reputation and meet customer expectations.

• Investors and Shareholders: The company focuses on delivering strong

financial performance, dividends, and share value growth. Effective
financial management and transparent communication with
stakeholders contribute to maintaining investor confidence.

• Communities and Society: McDonald's acknowledges its role as a

corporate citizen and engages with the communities it serves. The
company supports local initiatives, implements sustainable practices,
and invests in corporate social responsibility programs. Positive
contributions to society enhance McDonald's reputation and brand
image.

• Competitors: McDonald's continuously monitors its competitors and

industry trends to maintain its competitive edge. The company's
strategic decisions, marketing campaigns, and menu innovations are
often influenced by the competitive landscape
 Planning and Organizing Effective Performance in context with Mc
Donald’s
Planning and organizing effective performance involves setting clear goals,
developing strategies, and implementing structured processes to ensure
efficient operations and achieve desired outcomes.
Planning and Organizing Activities:
➢ Identification of Objectives: Mc Donald’s objective is mostly related to
its menu as its customers are only attracted by the menu.
➢ Budget: Deciding the budget for the newly introduced items, how much
to spend on marketing and other operational activities for the new
items.
➢ Time: It is also important to assess the time required for development,
testing and launching of the new item so that accordingly decision can
be taken.
➢ Risk Analysis: Identifying the potential risks that may arise due to the
introduction of new item and developing a strategic plan to cope up with
it smoothly.
➢ Supplier Coordination: Before adding a new item in the menu, Mc
Donald’s needs to be assured that it is going to get all the ingredients
required for preparing the new item in order to complete customer’s
requirement hassle-free.
➢ Launching and monitoring: After launching of the new item, it must be
assessed that the new item is giving expected outcome or not like sales,
review from customers, etc.
➢ Marketing and Promotion: The marketing team plans and executes a
marketing campaign to create awareness and generate excitement
around the new menu item. This includes designing promotional
materials and digital campaigns.
➢ Training: Restaurant staff is trained to prepare and serve the new item,
ensuring consistent quality and customer experience across all outlets.
 Mc Donald’s as a people’s Organization
• Inclusive Environment: McDonald's operates in various countries and
cultures, making diversity and inclusivity essential. The company strives
to create an inclusive workplace that values different backgrounds,
perspectives, and experiences. This inclusivity is reflected in both its
employee base and its menu offerings to cater to various dietary
preferences.
• Community Engagement: McDonald's often engages with the
communities it serves through initiatives like local hiring, charity work,
and supporting educational programs. This involvement helps build a
positive relationship between the company and its customers while also
contributing to the well-being of the community.

• Social Responsibility: The company has undertaken efforts to address

social and environmental issues. For instance, it has worked on reducing
its carbon footprint, using sustainable packaging, and promoting
responsible sourcing of ingredients. These actions reflect a commitment
to making a positive impact on society and the environment.

• Career Progression: McDonald's is known for promoting from within the

organization. Many senior executives and franchise owners began their
careers at entry-level positions within the company. This emphasis on
internal promotion showcases their dedication to recognizing and
rewarding employee loyalty and potential.

• Employee Benefits: McDonald's offers various employee benefits,

including health insurance, retirement plans, and employee discounts.
These benefits demonstrate the company's care for the well-being of its
employees beyond their work responsibilities.

• Customer-Centric Approach: McDonald's focuses on providing consistent

customer experiences across its locations. This customer-centric
approach aims to ensure that customers feel valued and satisfied,
promoting a positive image of the company.