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Mcdonalds Organizational Structure Essay

4250 words - 17 pages

MG209: Individual Assignment

McDonalds Business Portfolio

Submission Deadline: 12/12/14

Word count: 3, 163
Contents Page

Introduction Page 3&4
Theme 1 Page 5
* Remaining Market Leader while doing business overseas
* (i) Position and Structure as a Transnational corporation Page 5
* (ii) Focus on the Brand and Strategic Targets Page 6
Theme 2 Page 7
McDonalds External Dependencies and Influences on ...view middle of the document...

The company has its headquarters in America with approximately 1,200 restaurants in the UK, of which 600 are franchises employing 85,000 people, (McDonalds, (2011)). Indeed, McDonalds have made its mark in the fast- food industry with its brand ranked 6th in the world’s most valuable brands. Furthermore, its overall brand value has been estimated at $39.4 Billion, (Forbes, (2014)). Moreover, this year marks their 40th Anniversary, and it was ranked 7th in the Sunday Times 25 best big companies (The Sunday Times, (2014)).

The Sunday Times has also ranked McDonalds Restaurants 22nd of the 25 best big companies to work for and 59th in the top 100 graduate employers, (The times, (2014)). In detail, they were ranked 13th for wellbeing, 15th for a fair deal and 16th for leadership, (The Sunday Times, (2011)). And, given the current economic climate and lack of job security employees were 77% positive about the organization’s future. Evidently, they have built up a very reputable brand image by providing value for money and quality service enhanced by a strong corporate culture (See document 1). Indeed, their company mission is to be the best and chief fast food provider on a global scale and the best for employees in every community worldwide, (McDonalds (2014)).

Ray A. Kroc founded McDonalds in 1955 and set it up on a decentralized franchising model, which allowed each franchise restaurant a wide compartment of liberty to experiment (Love, J (1986)). However, today McDonalds is a large multinational organization organized into a geographical structure with five key segments; USA, Europe, AMEA, Latin America and McDonalds International. The structural design at the organizational level is practical meaning activities are grouped together from top to bottom, (Daft, (2013)). Finally, the structure at restaurant level is divisional, with various teams who focus on individual products or services, (Daft, (2013)). Therefore since McDonalds operates using three structures; functional for the corporation itself, divisional for the restaurants and geographic for its global market this means it has a model structure overall, (see document 2). The matrix structure allows them to be multi-focused so that either product and function or product and geography are being emphasized at the same time (Daft, R (2013)).

Today, McDonalds UK holds 16% of the fast-food market and sales have increased since last year because they were ready to capitalize on the horsemeat sandal that punished their chief competitor Burger King, (Woollacott, E. (2014)). However, since the recession they have had to change how they structure their business as disposable incomes decrease and many restaurant closures have taken place in rural areas, (Woollacott, E. (2014)). Recently, the company has undergone some restructuring after a significant decline in sales (see document 3) though implementing changes at restaurant level, but its current success can be attributed to an improved...

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