Background Of The Mcdonalds Restaurant Chain Business Essay


McDonald's is a multi-national restaurant chain. They are specially selling Big Mac and fries all over the world. In 1940 Richard and Maurice McDonald opened their first Bar-B-Que restaurant in San Bernardino, California. In 1948 the brothers decide to change the operation style of restaurant due to pressures of a full menu and hassle of managing staff. They developed the idea and make a decision of selling hamburgers, cheeseburgers, French fries and drink that cheaper and quicker to cook and generate higher turnover of customers (

However, massive success of over the few years McDonald's restaurant bosses decided to give first franchise in 1954 to expand their business wings. And in 1955 Kroc opened first franchise if the McDonald's restaurant in Des Plaines, Illinois. By 1961 Kroc was running the business tremendously well and he wanted to greater expansion of the McDonald's brand restaurant in every state in America. Moreover, he wanted to create a Hamburger University where potential restaurant managers could be taught how to manage McDonald's restaurant to make sure the quality of the food of the entire chain restaurant. Dick and Mac McDonald were happy as they were but Kroc was more ambitious about the continuous success of the business and Kroc offer to buy the restaurant which is cost 2.7 million dollars (

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Furthermore, in early 1960s, Kroc choose strategy to focus on the children to improve sales therefore the company sponsored a kids' TV show called Bozo the Clown. The McDonald's chain continued to grow business. The Big Mac was created in 1968. The franchise expanded overseas, with the first restaurant opening in Australia in 1971. In 1973 McDonald's invented Egg McMuffin as first breakfast product. Total 3000 restaurants of chain McDonald's first opened in Britain (London) in 1974. According to change in product and innovation strategy McDonald's invented Happy Meal for children in 1979 (

Finally McDonald's invented Halal Meal for Muslim community in 2006 in Britain to boost sales. McDonald's continued to expand into more and more countries and innovating new product in market to fulfil and change customer tastes. There is no doubt that barring any major set-backs, the McDonald's Corporation will continue to develop over the remote location all over the world due to there strategic change and creating new innovative product for customer with principles of quality, service, cleanliness and values (

Therefore, to involve with the change management should innovative same time understand the requirement of customer. Customer is everything to run a business. To increase the sales anyone has to attract customer other wise other business competitor will snatch customer then you will loose customer same time it effected the business sales. For that, in some cases bureaucratic organisational system(Weber) is better, some cases Fordism (1863-1947) is better and some cases scientific management system (Taylor, 1911) is better for the organisation totally depends on the organisational structure. As per management system McDonald's follow bureaucratic (Weber) management system.


Bureaucracy considered as a sub-division under the standard heading of management theories. It is a form of structure found in many large-scale organisations. The development of bureaucracy came about through the rising size and difficulty of organisations and the following demand for successful administration of such organisations. However, Weber was a German sociologist whose main interests were on power, authority and organisational structures ( Therefore main characteristics of Bureaucracy are as follows:

Hierarchical authority

Task specialisation

Task allocation

Formal system of rules and regulations

Employment on the basis of technical competence

Administration based on expertise and discipline.


In bureaucratic organisation power is centralised. Therefore main disadvantage of bureaucratic organisation is lack of innovation. In the bureaucratic organisation all the process and task are limited that there are no opportunities to innovation, in fact innovation process is almost eliminated in this organisation. In this management system employees are demotivated due to lesser employee contribution and participation. Apparently HR also can not utilise employee's creativity and innovation which is the major weakness in bureaucratic structure of the organisation (

Moreover, main advantage is the total control and monitoring of upper level management. The success of the organisation depends on the wise decisions of top management. If the top management is good then the outcomes can be positive and if the top management is not good enough then outcomes is disaster for the organisation (

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The strengths of a bureaucratic institution are given below:

More employees control with clear rules and regulations.

The reporting relationship is clear and well defined.

The system is centralized and adjectives the decisions can be monitored.

The weaknesses of a bureaucratic institution are follows:

The decision making and all the other process are very slow.

The job is boring for the employees due to less involvement.

The communications has to go through step by step lots of levels that it gets misshapen.

Huge control discourages innovation and creativity.


Every organisation's aim is to achieve higher productivity and efficiency therefore they always try to increase output with the help of latest technology. The US automobile pioneer Henry Ford (1863-1947) established a theory which is called Fordism. Fordism is focuses on the minimisation of costs with proper utilisation of asset instead of maximisation of profit. The main principles of Fordism are given below:

Analysis of jobs using time and motion techniques: How many customers can serve in a minute in McDonald's restaurants?

Standardised parts: Make sure the quality of service and goods for their customer.

Task specialisation: Distribute work based on work experience.

Assembly line working: Production process is working smoothly to fulfil customer demand on time.

Mass produced goods: Ensure enough supply of goods in store.

High level of control: High level of management control in McDonalds employees.


According to Golder (2005) stakeholder can be defined as any individual, group or institution and all primary and secondary stakeholders who has a vested interest in the natural resources of the project area who potentially will be affected by project performance and have something to achieve or lose if conditions change or stay the same. However, Daft (1991) defines stakeholders that any group contained by the organisation or outside the organisation that has stake money in the interest of organisational performance or development.

Moreover, Stakeholder's analysis is all those who required to be considered in attaining project objectives and whose contribution and support are crucial to its achievement. The objective of stakeholder analysis is to develop a planned view of the human and institutional scenery, and the co-relation between the various stakeholders and the issues they care about most. The following groups are the main categories of project Stakeholders:


Local Authorities

Vulnerable groups





Eventually, all projects rely on selecting stakeholders with whom they can mutually work towards aims that will decrease or overturn the threats to your main conservation targets. A stakeholder analysis can assist a project or programmes identify like:

The welfare of all stakeholders who may influence or be affected by the programme/project;

Possible differences or threats that could put at risk the programme;

Chances and relationships that can be made on throughout execution;

Groups that should be positive to contribute in different stages of the project;

Suitable approaches and strategies for stakeholder commitment; and

The full involvement of stakeholders in both project design and performance of is a key to - but not an assurance of - victory. Stakeholder participation helps following activities:

Gives people a little idea over how projects or policies may change their lives;

Is necessary for sustainability;

Generates a logic of ownership if started early in the advance procedure;

Gives opportunities for learning for both the project team and stakeholders themselves; and

Builds ability and improves responsibility.

Stakeholder analysis is also a proper time to discover whether or not gender will be an issue in the amplification and carrying out of future efforts. It is well standard that discrimination by gender is possible to reduce the impact and usefulness of projects and policies. Furthermore, the addition of women as stakeholders has the potential to get both better management of the resource base and enhanced community welfare. Gender analysis involves the assessment of the following:

The distribution of tasks, activities, and rewards associated with the division of labour at a particular locality or across a region;

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The relative positions of women and men in terms of representation and influence; and

The benefits and disincentives associated with the allocation of tasks to women and men.


Given the possible impact of stakeholder approaches and pressure on the success of a project, it is almost best to make sure a broad possibility of the stakeholder analysis throughout the Classify and Plan stages to make sure that legitimate stakeholder happiness and concerns are effectively addressed during the Implement and Analyze/Adapt phases (Golden, 2005).

There are a various ways of undertaking a stakeholder analysis. Workshops, target groups and interviews are three familiar approaches. During the course of the project cycle you may use all three, matching the technique to the evolving needs of the project. Whatever approach is used, there are three necessary steps in stakeholder analysis:

Identifying the key stakeholders and their interests (positive or negative) in the project;

Assessing the influence of, importance of, and level of impact upon each stakeholder; and

Identifying how best to engage stakeholders.

It explains key questions to ask at every step and give an example of a tool (Golden, 2005).


To analyse stakeholder groups, anyone can thus either start with situation analysis and think about the main stakeholders associated with each, or start with an analysis of the stakeholders and then connect them to specific threat and opportunity factors (Golden, 2005).

Some of the key questions anyone should ask at this stage. They are as follows:

How are the threatened scheme targets being used? By whom? Who is threatening the preservation target?

Who is most rely on the resources at stake? Is this a matter of livelihood or economic benefit? Are these assets replaceable by other assets?

Who possesses claims - as well as legal authority and usual use - over the resources at stake? Are several government sectors and ministry departments involved?

Who are the people or groups most educated, and able to deal, the resources at stake? Who is supervision these resources? With what results?

A helpful instrument for this first step - identifying the key stakeholders and their interests (see table 1). Start with brainstorming all possible stakeholders using the above questions as direction. Therefore, list of stakeholders may grow or shrink as analysis advancements, and understanding extended. In the next steps try to learn about every stakeholder group to go further depth as possible (Golden, 2005).

To develop the first column in the matrix (see table 1), list the stakeholders in the basis of above list of questions. List stakeholders used for simple indication. Then explain the stake or mandate of every stakeholder in the second column. The mandate refers to the nature and limits of every stakeholder's stake in the resource for example livelihoods, turnover, lifestyles, cultural values, spiritual values, etc. and the foundation of that stake for example customary privileges, rights, managerial or lawful tasks, logical privileges, social responsibility, etc. For every stakeholder, explain their potential role in the project in column 3 (see table 1) (Golden, 2005).

Then make a note in column 4 if the stakeholder is marginalized, for example women, local peoples, ethnic minorities, adolescence, or other indigent or disenfranchised groups. Marginalized stakeholders are short of the acknowledgment or ability to contribute in teamwork efforts on a different basis, and particular attempt must be made to make sure and allow their contribution. Their participation is significant in the project (Golden, 2005).

Table 1: Stakeholder Analysis Matrix


Stake / Mandate

Potential Role in





Key questions for this second stage in a stakeholder analysis are given below:

Who is directly liable for resolutions on issues vital to the project?

Who grasps positions of responsibility in concerned organizations?

Who is important in the project area (both thematic and geographic areas)?

Who will be pretentious by the project?

Who will encourage/maintain the project, offered that they are concerned with it?

Who will block/hold back the project if they are not concerned?

To continue with the second stage (see Appendix: I) of the stakeholder analysis - assessing the influence, significance, and stage of impact upon every stakeholder, the stakeholder analysis grid (see Appendix: I) can be helpful for philosophy how different types of stakeholders might be involved. It standardizes stakeholders along with their usual demands over decisions to be taken and the probable impact of project decisions leading them (Golden, 2005).

This analysis can be done using pieces of paper or wall with the matrix written up on flipchart are given below:

Identify stakeholders.

Organize them on the matrix.

Consider relations (e.g. responsibilities, privileges, levels of conflict) within and among stakeholders in every part of the matrix.

Consider possible plans for connecting different stakeholders in every part.

The following questions are helpful when bearing in mind where stakeholders sit on the Influence/Impact analysis stages:

Are they likely to influence the success or failure of the project?

What is their relationship with the particular organisation?

What is their relationship with the project?

Where are they now versus where you think they should be on the Influence/Impact stage?


In the end, the third stage (see appendix: I) engages determining how to engage the different stakeholders. Different types of stakeholders will be involved in different ways in the different stages of the project, from gathering and providing information, to discussion, conversation, working jointly, and joint venture (Golden, 2005).

This third step in the stakeholder analysis (see Appendix: I) is focuses on partnerships. Identifying who requires or needs to be engaged, and when and how that engagement can be gained on the basis for developing teamwork. Once stakeholder views are similar and understood able, a decision can be made on whether to follow cooperation (Golden, 2005).

The importance of the process in planning and performing successful relationships cannot be overstated. Good-faith, hard works are regularly disturbed because the parties are not experienced in the group effort system, and because insufficient concentration is given to designing and managing it. With a comprehensive, visible method throughout project development and functioning will help to make ownership and dedication. If it is impossible to have all key stakeholders involved from the start, then a process for stable contribution is required for organisation success (Golden, 2005).


There are many methods to keep the change going in the organisation. Kotler (1995) introduced eight-step change process which helps to do change in McDonalds. The eight-step change model is discussed as follows:


Develop a sense of importance around the necessity for change as because change is happen if the company wanted to change. This is simple but the impact of it is significant in the initial motivation. But company need to be positive and honest about the system of creating sense of employee minds such as competitive market it will assist employee to adopt change in organisation. In that way urgency can make and adopt on itself (Kotler, 1995). For creating urgency of change organisation can take following activities:

Identify possible threats and think what could happen in future.

Analyse opportunities which could be demoralized.

Start off honest conversations, and provide lively and influential cause to get people talking and thinking.

Ask for support from stakeholders and industry people to make stronger the logic.

Kotter (1995) proposed that for change to be successful, 75% of a company's management requires to "buy into" the change.


Company needs to find efficient change leaders. They don't essentially go behind the conventional company hierarchy. To guide change organisation required to set a coalition or team or influential people who can control the power from various source. As soon as set a 'change coalition' then everybody needs to works as team to continuously drive the process of urgency for change. In this stage company can follow following activities for the shake of change:

Identify the proper leaders in your organization.

Request an emotional promise from the coalition team.

Work on team to build within change coalition.

Monitor the team weaknesses and ensure to have a good mix of people from various departments and various levels in the organisation.


There will possibly be many vast ideas and solutions floating around to do change. Connect these ideas to an in general vision that people can simply grasp and remember. An understandable vision can helps to understand the motto of change and that makes more sense to drive through change. Organisation can take below listed actions to create a vision for change:

Determine the principles that are middle to the change.

Develop a short summary of the objectives of the changes.

Ensure that change coalition team can explain the vision briefly.

Exercise "vision dialogue" frequently.


Vision message will almost certainly have strong competition from other day-to-day communications within the company therefore company need to communicate it regularly and strongly, and push in it within everyday activity. Utilise the vision regularly to make decisions and solve problems. It is necessary to keep it fresh on everyone's minds then they'll remember it and respond to it quickly. Organisation can take following steps to communicate the vision:

Talk frequently regarding change vision.

Honestly and sincerely address peoples' anxieties and nervousness.

Apply the vision to all parts of operations such as training to performance reviews.

Lead by example.


If you follow these steps and reach this point in the change process, you've been talking about your vision and building buy-in from all levels of the organization.

Hopefully, all employees want to get eventful and get the benefits of promoting activities. But there are might have something to create obstacles the change process. Therefore continuously monitor the barriers of change process, and remove obstacles and if necessary empower the people to perform vision, and it helps to continuous change. For remove obstacles following procedures are important:

Identify, or hire, change leaders to execute the change.

Look at organizational construction, job descriptions, and performance and compensation systems to ensure supportive with vision.

Appreciate and reward people for making change happen.

Identify people who are refusing to accept the change and take necessary steps.

Remove obstacles quickly.


Success motivates company easily. Therefore early victory in change process influences the company. Beside the long-term goal create short-term achievable targets. Short-term win motivate employees to do hard work for further change in organisation. To create short-term wins organisation need to take short-term targets such as:

Look for reliable projects that can employ without assist from any powerful opponent of the change.

Don't select costly early targets.

Carefully examine the possible threats and scams of your targets otherwise it will affect entire change plan.

Reward the people who meet the targets.


Kotter (1995) argues that many change projects fail because win is stated too early. Actual change runs bottomless. Rapid wins are only the start of what requires to be done to complete long-term change. However, every success gives a chance to build on what was right and identify what need to improve. Therefore organisation needs to assess following things carefully:

After each win examines what was right and what wants recovering.

Set objective to carry on building on the momentum achieved.

Learn the thought of non stop development.

Keep information clean by carrying new change team and leaders for change coalition.


Finally, any fix change should become part of the core of organization Make constant efforts to ensure that the change is seen in every aspect of organization. It's also important that company's leaders and employees require to carry on to support the change. If lose the support of these people it causes the failure of the organisational change. Organisation should careful about following activities to anchor the changes in corporate culture:

Inform success stories about the change procedure, and repeat relevant stories.

Include the change principles and ethics when hiring and training new employees.

Openly identify key members of original change coalition, and make sure the contributions of all employees.

Make plans to restore key leaders of change as they move on.


Every organisations aim to get benefit from the competitive global market. Therefore, organisation needs to adopt with the current business trends. For that reason organisation required to develops their business activities based on the circumstances such as technological, market trends, increase employment opportunity etc. McDonald's also developing their business activity. Finally, to get the potential benefit organisation needs to continuous development means keep changing their process according to current business trends.

To take the challenge of today economy everyone has to change according to the surrounding environment to get potential benefit and to survive in the challenging marketplace. For that reason every organisation should be innovative to create something new to market to change the taste of customer positively and McDonald's management also committed to accept changes to meet the requirements of customer.