Organization Profile Of The Mcdonalds Chain Business Essay

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One of the world's largest chains of fast food restaurants is McDonald's Corporation. In 2007 it served nearly 47 million customers daily. A franchisee, an affiliate, or the corporation itself run a McDonald's restaurant. Macdonald's corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2007, McDonald's revenues grew 27% over the last three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

Hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts are the primary items of food sell by Macdonald's. in the face of criticism over the healthiness of its products and in response to obesity trends in Western nations the company has modified its menu to include healthier alternatives such as salads, wraps and fruit.

history of the organization:

Two gentlemen named Richard and Maurice McDonald open the restaurant business inSan Bernardino, California in 1940. An innovative concept "Speedee Service System" established the principles of the modern fast-food restaurant. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having a puffed out costume legs.

Fact of the organization:

McDonald's restaurants are found in 119 countries[11] and territories around the world and serve nearly 47 million customers each day. More than 1.5 million people employed at McDonald's which operates over 31,000 restaurants worldwide.

Business model

As an investor in properties, a franchiser of restaurants, and an operator of restaurants, McDonald's Corporation earns revenue . McDonald's Corporation directly owned and operate approximately 15% of restaurants. The rest are operated by others through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.

Macdonald's UK business form is different, in that less than 30% of restaurants are franchised, with the majority under the possession of the company. McDonald's provide training to its franchisees and others at Illinois, Hamburger University in Oak Brook.

Apart from UK, McDonald's restaurants are run by joint ventures of McDonald's Corporation and other, local firm or governments.

McDonald's policy, does not allow to make direct sales of food or materials to franchisees, as an alternative organizing the supply of food and resources to restaurants through accepted third party logistics operators.

Eric Schlosser (2001) in his Fast Food Nation said that nearly one in eight workforce in the U.S. have at some time been employed by McDonald's. (on the basis of a news piece on Fox News this number is one in ten.) Eric Schlosser also said that McDonald's is the major private operator of playgrounds in the U.S., as well as the solitary largest buyer of beef, pork, potatoes, and apples. The range of meats McDonald's uses varies with the society of the host country.

Recruitment Requirements and Challenge

The status of any industry ultimately depends on the quality of its products. High quality products require high quality individuals to produce, design, create and deliver them. So if a business is to maintain its status it requires to do well at recruiting high quality workforce. For every business offering a big piece of personal service, a capability to recruit, train and keep high quality staff is predominantly very important.

Here we illustrate McDonald's, the world's largest and fastest growing worldwide restaurant chain; uses recruitment and training policies with practices that are planned to a centre of attention, recognize, build up and keep the high ability of staff its procession of business demands.

In October 1974, UK permit to McDonald's to opened its first restaurant in UK. In December 2004, there were approximately 1330 McDonald's restaurants functioning in the UK. Almost 60% of these are owned and run by the company itself. The rest are run by franchisees.

Each McDonald's restaurant unit is planned to act as an autonomous business, where restaurant management accountable for accounting, operations, inventory control, public relations, training and human resources. The rest of the company employees are paid office staff, working in either the Corporate or provincial Departments.


In McDonald's, people are its most important advantage. This is as customer satisfaction begins with the attitudes and abilities of workers and committed, effective workforce are the best way to success. For these reasons, McDonald's strives to draw and hire the best, and to offer the best position to work. All businesses practice staff turnover for various reasons e.g. career change, leaving the area, returning to education, a new opportunity elsewhere. Recruiting and training staff is awfully expensive and businesses will look to keep staff turnover to a minimum. To do this Macdonald's applied a policy which is 'choose wisely, and treat well'. McDonald's require people who want to excel in delivering exceptional service. To make sure the company recruits the correct people, it has recognized essential skills and behaviours that applicants should be able to show. For each vacancies there is a job description outlining typical duties and responsibilities and a person specification defining personal skills and competences.

McDonald's recruitment policy state that, each individual restaurant is accountable for recruiting hourly-paid positions. The Management Recruitment department in East Finchley co-ordinates the recruitment of managers.

For filling hourly-paid employees positing McDonald's use quite a lot of avenues. Positions are generally advertised in the restaurant website. The company's recruitment history shows this is the best method of hiring quality staff e.g. people living locally and/or friends of existing employees. McDonald's also uses local job centres, career fairs and other local services. It is very important to use useful hiring material with a clear message targeted at the right audience.

A recruitment advertise often draw more applications than there are positions available. The applicants to be interviewed are selected by manager and will perform the interviews.

End of the final interview the manager will rate the applicant's responses. A successful applicant will have demonstrated skills and behaviours that have been identified as being key to the position. S/he will also have provide papers to demonstrate s/he is eligible to

work in the UK in line with the Asylum and Immigration Act 1996.

The first stage is to notify all candidates as to whether or not their application has been successful pending acceptable references. The company notifies all unsuccessful applicants in writing. McDonald's inducts all new employees into the business through a

Welcome Meeting, which they must attend. The Welcome Meeting gives an overview of the Company, including:

• job role

• food, hygiene and safety training

• policies and procedures

• administration

• benefits

• training and development.

Approximately 60% of restaurant crew are aged 20 or under and; for the majority of applicants, a job with McDonald's would be their first experience of service. For a lot of juvenile people, McDonald's also offers a career opening. A well-run interview will recognize an applicant's prospective to be a winning McDonald's employee. To discover people who will be dedicated to stand out in delivering outstanding service, McDonald's scripts an interview conduct that helps the company predict how an applicant's earlier period behaviour is likely to influence future performance. It uses a fact-based decision-making procedure. The questions look for real life events or situations rather than allowing applicants to give a general or theoretical response. Interviewers look for behavioural evidence in

the applicant's life history that fits with the requirements of the job. The interviewer rates candidates on their responses and offers jobs to those who get the highest ratings.

McDonald's prospective managers come through two main sources. More than half of all salaried management positions are taken up by hourly-paid employees who receive promotion. The rest are predominately graduates.

Wherever possible, McDonald's directs applicants towards applying on line at website. People who cannot access the web can call the Recruitment Hotline, or pick up a prepaid Business Reply Card from a McDonald's restaurant.

The selection procedure provide an initial online psychometric test through its website. This test produces an early score. The applicant then attends a first stage interview and is offered "On Job Evolution" (OJE).

This is a day appraisal in a restaurant. Successful completion at OJE will lead to a final interview, after which the manager decides whether or not to hire the applicant.

New recruit will also meet their trainer, and explore the restaurant. The company run a 3-week probationary period, after which employees are rated on their performance and are either engaged or have their employment terminated.

Professional Development & Training Programmes & Their Success or failure

McDonald's success is built on the highest standards of quality, service and cleanliness delivered to customers in each of its restaurants. Well-trained crew and managers are the first step to achieving these standards. It is company policy to provide career opportunities that allow employees to develop their full potential. This includes a comprehensive training programme for crew and operations management and career progression that enables a 'first job' employee to progress through to a senior management position through merit-based promotions. The first stage of training is at the Welcome Meetings. These set out the company's standards and expectations. This is followed by a structured development programme that provides training in all areas of business. Crew trainers work shoulder-to-shoulder with trainees while they learn the operations skills necessary for running each of the 11 workstations in each restaurant, from the front counter to the grill area. All employees learn to operate stateof- the-art foodservice equipment, gaining knowledge of McDonald's operational procedures. The majority of training is floor based, or "on-the-job" training because people learn more

and are more likely to retain information if they are able to practise as they learn. All new employees have an initial training period. Here they are shown the basics and allowed to develop their skills to a level where they are competent in each area within the restaurant. The time scale for this depends on their status i.e. full or part-time. They will also attend classroom-based training sessions where they will complete workbooks for quality, service and cleanliness.

After the initial training period all employees receive ongoing training. This is done using "Observation Checklists" for the station they are working at. The rating will go towards their appraisal grading.

The restaurants do promote crew members to hourly-paid management positions that carry accountability for areas within the restaurant, or responsibility for a shift. Training and development is given in the restaurant and in addition the participants will attend regular development days. On successful completion of a management entrance exam, employees will attend a training course held by the training department at the regional office before returning to the restaurant in a management position.

The McDonald's Management Development Curriculum takes new recruits from trainee manager to Restaurant Manager. This consists of on-the-job training and open learning development modules, supported by courses and seminars at the Company's National and Regional Training Centres. The Management Development Curriculum is aimed at persons aged 21 or over, either graduates or individuals with some previous management

experience. It offers a direct route into restaurant management, through an intensive structured training programme. The Management Development Curriculum is divided into four key programmes:

• Shift Management - developing trainee managers in the skills and techniques required to become effective in all aspects of running a shift.

• Systems Management - targeting second assistant and newly promoted first assistant managers. This programme covers all areas of McDonald's systems, increasing the manager's business knowledge. It also develops individual techniques.

• Restaurant Leadership - introducing managers to the key skills needed to become effective restaurant leaders e.g. team-building, communication, decision-making.

• Business Leadership - focusing restaurant/general managers on the need to develop a business strategy that encompasses both internal and external factors.

Most departments in the regional offices offer restaurant managers opportunities to be seconded to work in the regional office. This gives an experienced manager the opportunity to develop and learn new skills, to see a different side of the business and to experience how each department's strategies have a role in achieving the company's goals.

Motivational Factors & The Development of a Programme of motivational factors

Writers such as FW Taylor (1856 - 1915) believed workers would be motivated by obtaining the highest possible wages through working in the most efficient / productive way. In short, the more money you offer the worker, the more motivated they will be to work. Taylor, identified as the Father of Scientific Management, was obsessed with

optimising efficiency and productivity in all areas of life. (Whilst out walking he would attempt to ascertain the optimum length of stride required to cover a distance!). His most well known research focused on scientifically analysing the tasks performed by workers, and it is through these studies that we can understand Taylor's approach to motivation of the worker.

McDonald trains almost 55,000 employees each year. Each year, it also

dedicates over £10 million to ongoing employee training, providing

people with valuable skills.

Work experience at McDonald's is a foundation for future

employability, particularly as the UK labour market continues to

evolve. With the increased demand for skilled workers, a job which

offers ongoing training with a leading organisation - is a solid

career investment. People from all walks of life credit a first job at

McDonald's with having equipped them with the ingredients for success.

For the first time employed, McDonald's is an important "mentor',

teaching the interpersonal and organisational skills necessary for

functioning effectively on any job. McDonald's business demands

teamwork, discipline and responsibility; McDonald's experience results

in enhanced communications skills as well as greater self-confidence;

and McDonald's stresses "customer care", and attitude which industry

experts recognise as an essential ingredient for business success.

McDonald's Internal Seminars

Seminars are designed to establish a common foundation of leadership

and management knowledge and skills for McDonald's officers. These

seminars will focus on key business issues identified by senior

management and create a platform for effective implementation of

strategic business initiatives. A team of McDonald's senior management

and external providers lead the seminars sessions. The external

providers are recognized leaders in their area and have extensive

experience consulting with and teaching executives.



From time to time, organizations find it useful to summarize employee

performance. This can be helpful for looking at and comparing

performance over time or among various employees. Organizations need

to know who their best performers are.

Within the context of formal performance appraisal requirements,

rating means evaluating employee or group performance against the

elements and standards in an employee's performance plan and assigning

a summary rating of record. The rating of record is assigned according

to procedures included in the organization's appraisal program. It is

based on work performed during an entire appraisal period. The rating

of record has a bearing on various other personnel actions, such as

granting within-grade pay increases and determining additional

retention service credit in a reduction in force, although group

performance may have an impact on an employee's summary rating, a

rating of record is assigned only to an individual, not to a group.



In an effective organization, rewards are used well. Rewarding means

recognizing employees, individually and as members of groups, for

their performance and acknowledging their contributions to the

agency's mission. A basic principle of effective management is that

all behaviour is controlled by its consequences. Those consequences

can and should be both formal and informal and both positive and


Good performance is recognized without waiting for nominations for

formal awards to be solicited. Recognition is an ongoing, natural part

of day-to-day experience. A lot of the actions that reward good

performance - like saying "Thank you" - don't require a specific

regulatory authority. Nonetheless, awards regulations provide a broad

range of forms that more formal rewards can take, such as cash, time

off, and many no monetary items. The regulations also cover a variety

of contributions that can be rewarded, from suggestions to group