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Management Functions at McDonald’s

Introduction

Management is a vital component required by organizations to achieve their goals and objectives. When functions of management are properly implemented in an organization, the organization can achieve its goals and remain competitive progressively. McDonald’s is a fast-food chain that has remained ahead of its competitors due to an excellent management process. Despite the challenges that have resulted from bad economic conditions, as well as changing tastes and preferences, fast food has remained profitable and competitive. The success of the corporation is hinged on its management’s efficiency. McDonald’s uses the following management functions to outperform its competitors and increase its revenues and profits: planning, organizing, leading, and controlling.

Planning involves decision-making about an organization’s present and prospects. Planning lays the foundation upon which the objectives of an organization are to be set and achieved. The strategies through which progress is achieved are defined during the planning process. At McDonald’s, the planning function has been evident throughout its history. Initially, the company decided to penetrate its potential market through growth. This involved setting up new restaurants in different geographic regions of the world. The growth strategy is evident in the 119 countries that host McDonald’s Restaurants. This strategy has contributed to the company’s leadership in the fast-food industry. While many of its competitors operate mainly within the United States, 57% of McDonald’s restaurants are outside the United States (Steveman, 2010). The economic meltdown that negatively affected the American economy affected McDonald’s to a lesser extent as compared to its competitors. This was due to the extra revenues Mcdonald’s earned from its foreign operations as compared to its competitors. Although Compay’s initial market penetration strategy was through setting up new restaurants, it could not remain feasible throughout due to changes in the demographics and market saturation. After implementing the strategy for several years, new restaurants started snatching business from the existing ones. The management at McDonald’s had to change its plan so that it could fit within the saturated market. The second plan that the company is currently using is refurbishing its restaurants to give them a new and attractive look. Moreover, menu options are constantly being adjusted to reflect new tastes and preferences. Initially, Fast Food operated during lunch and supper times. Progressively, decisions were made to include breakfast in its operating hours. Currently, more than 40% of its restaurants in the United States operate for 24 hours. Such changes emerge from the planning process.

Organizing entails setting the internal structures of an organization, responsibilities, and allocation of resources. Organizing is required in the implementation of plans and strategies. Organization involves allocating human and material resources to tasks that must be completed to realize an organization’s objectives. At McDonald’s, some of the restaurants are operated by its management while others are operated through franchising. The franchise system enables the company to minimize its costs and maximize the franchisee’s market knowledge in local markets. For instance, the refurbishment will cost the company less due to the sharing of costs through the franchise system. Macdonald has given different Vice Presidents the responsibility of making decisions within their divisions. For Instance, the European Vice president has the responsibility of making decisions relating to the design, décor, and menu components of restaurants operating in Europe. This responsibility has enabled the European division to become organized and compete aggressively with the American division in terms of revenue generation.

Consequently, differentiation based on the tastes and preferences of different cultural groups has been achieved. Such differentiation has created customization of products and services that fit the specific customers’ needs. The overall result has been increased customer loyalty to McDonald’s products, which has translated to increased market presence, profits, and revenues.

The leading function involves directing the daily activities of an organization towards achieving the organization’s objectives. This function requires good leadership and interpersonal skills that help in making decisions and motivating employees. McDonald’s has been able to maintain consistency in the quality of its products despite the high employee turnover. A high employee turnover can cause a difference in the quality of products. However, due to the good leadership at McDonald’s, the products’ quality has remained fairly constant. The leadership of the company has chosen experts to develop new products. The leaders have directed the product development team to develop products that are least affected by the high employee turnover. Such leadership has ensured McDonald’s dominance in the fast-food industry.

Controlling ensures that the whole organization is efficient in the utilization of resources and conforms to the laid down policies and procedures, which lead to objectives’ achievement. Controlling identifies discrepancies between the plan and the actual status of affairs and devises corrective measures. At McDonald’s, there is a unique culture that should be adhered to by all restaurants irrespective of their geographical location. The Company is famous for burgers and fries, which identify it everywhere. In cases where a change is required to conform to cultural needs, the leadership of the company gives the direction of the way forward. For instance, McDonald’s had to continue making burgers in India even though part of the Indian population does not consume either pork or beef. The company leadership decided to offer burgers made using vegetables. The company has been able to devise corrective measures in making healthy foods that are currently in demand. This has enabled it to control the bad publicity associated with the claim that its food is unhealthy.

Conclusion

In conclusion, McDonald’s has been able to keep competitors at bay due to its functional leadership and management team. The company has used planning, organizing, leading, and controlling functions of management. As a result, it has continuously overcome challenges and gained a competitive advantage over its competitors.

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