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Mcdonalds and Organisational Culture

In: Business and Management

Submitted By brenwatto
Words 2065
Pages 9
Question 1(word count 897)

From its humble beginnings the McDonalds organisation has continuously looked to engage everyone within the business to help identify and solve problems and has made the elements of leadership, participation, team-based structures, strong adoptive cultures, employee empowerment and the open sharing of information key pillars in which it has built itself from the ground up. Sustainable development has also been at the forefront of the McDonalds organisation and is an integral part of the continued success of the organisation and its ability to weather the storm from critics regarding the quality of its “fast food” in recent years and stay ahead of its competitors.

McDonalds has a rich heritage of leadership and investing in its leaders. In 1961 Hamburger University was established in Elk Grove, Ill to train restaurant staff and management in the consistent procedures of the restaurants operations and create a culture that has continued. The 2008 CEO Jim Skinner worked his way up from Trainee Manager. Skinner is also a man of values and ethics: When McDonald’s was blamed for the obesity problem, he helped direct the company to take responsibility and help create a solution rather than pass the blame. Thus, Skinner can be seen as a moral leader. McDonalds prides itself on leading from the top down but also encouraging ideas and innovation from the bottom up.

Ray Kroc has encouraged a participative strategy at McDonalds from the beginning with some of its main menu items such as the Big Mac, Fillet o Fish and Egg McMuffin being created by owner/operators and added to national and international menus. The Big Mac was invented by owner/operator Jim Delligatti of Pittsburgh in 1968 and soon added to the national menu after immediate success. The Egg McMuffin was invented by owner/operator Herb Petersen of Santa Barbara, California in 1975 after he identified the need for a breakfast option to be added to the menu, as with the Big Mac the Egg McMuffin was soon added to the national and international menu.

McDonalds owes its success to a team based structure rather than the efforts of individuals. For example the restaurant production lines are set up to perform as functional teams with an individual member working a station within the process on any shift. If one worker isn’t filling their position within the line then the process stops and the customer doesn’t get their product in an efficient manner. This also starts with the management as well, if team members are lacking motivation it’s up to the manager to get the team moving and keep things on track. Some observational studies have even observed the manager helping out their staff on stations when the restaurant is under pressure situations therefore increasing the staff awareness of a team based culture.

McDonalds has created and sustained much of its business through a strong culture. Whilst it encourages innovation from its employees McDonalds has always insisted on all restaurants maintaining the core operating principles of quality, service, cleanliness and value, this statement forms part of the company statement and is the backbone of the organisations success, as the companies top management put it “It doesn’t matter what country you are in a Big Mac is made the same way so each customers experience should be the same regardless of geography”. The consistency over the number of years the business has operated has created a strong culture that all existing and new employees need to understand and accept before they can become a part of the organisation.

McDonalds as an organisation has clearand open information sharing with all company related information available on their website. Many policies and reports are displayed on the website with access to anyone wishing to look. Some of the varied information and reports include: Work Place Health and Safety Policy, Corporate responsibility and sustainability reports, Pollution monitoring data and Energy Efficiency reports. Of particular merit the website displays the companies Environmental and Sustainability framework which includes extensive information about restaurant operations, corporate operations, supply sustainability, advocacy and partnerships information and culture and communications reports.

McDonalds has created a number of programs to directly work on sustainable development including environmental scorecards, supply chains and sustainable packaging. They have also diversified the menu to fall in line with global developments surrounding fast food and obesity. The change to the menu and even changing how some of the menu items are made has been one of the biggest steps made by the organisation in sustainable development as they came under very close and harsh criticism following the making of a documentary called “Supersize Me” in 2004. The organisation responded with a number of measures including reducing the sugar content of all their buns to just 5%, creating a smaller portion size for some of their menu options and changing the options in the happy meals to include seared chicken snack wraps at just 8g of fat per serve, fruit bags instead of fries and either water or low fat milk.

From the examples presented it is not hard to see that McDonalds is a learning organisation and is probably one of the global leaders in this area. By showing good leadership and investing time and money into its people it will continue to be a successful organisation and through the good work it does within the community will continue to be amongst the world’s most successful organisations.

Question 2(word count 826)

In today’s seemingly borderless world organisations whether they like it or not carry a certain amount of power and responsibility. To add to this with the accessibility of social media and society’s awareness of environmental and ethical behaviours so too does the average person hold a certain amount of power, therefore organisations need to be aware of and practice ethics, social responsibility and sustainability to stay operational and survive in the long run.

Ethical decision makinginvolves conflicts between the needs of the part and the needs of the whole. James Hardie is a now international organisation that started out as a privately owned Australian company and has been involved in a long standing legal issue over its asbestos mining and products. Legal findings have proven that James Hardie managers knew about the dangerous effects of asbestos but still allowed operations to take place and continue even after medical cases in which the affects of asbestos exposure had been found to be potentially fatal mounted against them. Once legal cases began the company tried to distance itself from the asbestos litigations by moving its operations offshore and setting up a fund that had been found in court that James Hardie managers knew would not have enough money to cover the mounting compensation claims but lied anyway. James Hardies numerous executives acted unethically first in their use of asbestos in mining and products and then in the distancing tactics in an attempt to avoid or minimise liability. Particular focus can fall on the area of utilitarian approach for making ethical decisions and not making their decisions in considering the effects the asbestos could have on all parties involved and more seemed to be focused on James Hardie as a company instead. Also a moral rights approach to making ethical decisions in particular “the right to life and safety” in which individuals have a right to live without endangerment or violations of their health and safety. (Samson and Daft 2012)

Socially responsible organisations consider the effects of their actions upon all stakeholders which include investors, shareholders, employees, supplier’s customers, governments and the community. (Samson and Daft 2012) The example of the James Hardie organisation not being socially responsible to all its stakeholders in particular its employees and customers is evident in the example of its attempt to shift its operations offshore and prevent payouts to those suffering affects from its asbestos products. Tyco International can be seen as an example of shareholders suffering from poor social responsibility when in 2002 chief executive Dennis Koslowski and former chief financial officer Mark Swartz where found to have stolen more than USD $150 million which shareholders latter recovered in class action against Tyco International.

As more people have become aware of environmental impacts there is increasing importance for organisations to show a social responsibility to best practices towards environmental impact. One particular case of an organisation losing power can be seen in the 2010 Deep Water Horizon oil rig explosion for BP in which it was found guilty of among other things lying to the US congress. This hit BP hard as they were labelled as being an organisation that operated with a lack of integrity.

Sustainable development is achieved when organisations practices create growth within the economic, environmental and social areas of the business without affecting the ability of future generations to do so. One organisation that achieves this is McDonalds through the practices of modernising the menu to keep financial performance, setting up supply chains to use local products and help the environment, the sponsoring of many sporting teams and the set up of Ronald McDonald House charity to support the social aspect. McDonalds menu came under worldwide criticism after the making of the 2004 documentary “supersize me” for a lack of healthy options in the menu. The organisation simply could have ignored this criticism and kept the menu as it had been for a long time, but being an organisation that actively practices sustainable development it made the decision to add some new healthier options to its menu as well as reduce sugar levels in some of its products. It also set up supply chains to use local products where possible and in doing so regained the approval of its customers while keeping the satisfaction and cooperation of its shareholders, staff and suppliers. Many of McDonald’s competitors have since followed suit as they realise how health conscious the majority of society has become when even selecting a fast food option.

As society today is becoming more aware of the issues surrounding ethical behaviour, social responsibility and sustainability organisations are spending more time developing and displaying policies surrounding ethical behaviour and decision making towards all stakeholders and the environment. Organisations are realising that to ignore these issues can be very costly for future business as class acts imposed by communities and governments seek to stop such organisations or at the very minimum bring about changes in how they operate.

Question 3

Managers of today’s global borderless corporations have an increasing need to develop cultural intelligence in order to conduct business effectively. With Australia’s growing multiculturalism managers in local or national organisations or businesses also may need to have developed cultural intelligence skills to effectively communicate with or motivate their employees. Cultural Intelligence is defined as a “multifaceted competency consisting of cultural knowledge, the practice of mindfulness, and the repertoire of behavioural skills” (Thomas and Inkson, 2004). In basic terms it is the ability to know that acceptable behaviour and gestures in other cultures may be the cause of conflict or insult in another’s and the need to be able to learn and apply this thinking to different cultural situations and make adjustment in how you act. It can be broken up into three separate categories: Cognitive, Motivation and Behaviour.

Cognitive or the head refers to a person’s knowledge about their own and other cultures. Cognitive cultural intelligence is the what, who, why and how of intercultural interactions. It can be obtained through experiences such as travel or working in other cultures or by education at home. An example of poor cognitive cultural intelligence as a manager of a marketing firm could be dealing with companies in the same industry but in two different countries. Perhaps in one country they place importance on being punctual with deadlines and placing emphasis on the technical abilities of a company and in the other country importance on being punctual with deadlines is not so important and an emphasis on being family friendly is a priority. As the manager if you where to deal with one company first and then assume that because they are in the same industry that they would want the same thing you could lose business and damage your reputation.

Motivationthe emotions (gaining rewards and strength from acceptance and success)

Behaviourthe body (using your senses and adapting your movements and body language to blend in)

Training for Cultural Intelligence

Conclusion

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