يصثب

1. CASE STUDY NO. 1 MCDONALDS
Grilling up An Empire
CONTOMPORARY MANAGEMENT
GROUP 1 C/ 1 H.
Work Team Members
1- Hossam El-Sayed Galal 2-
Yassin Fathy Hassan
3- Ahmed Mousa Mohamed
4- Ahmed Abdel-Moneam Hassan
5- Mostafa Salah El-Deen Hassan

2. Content
What is McDonald’s
organizational structure?
Abstract
What are the functions of
McDonalds management?
Introduction
Fast food industry
References. .
What is external environment
of McDonalds and how they
deal with it ?
Conclusion.

3. Abstract
This paper presents a case study focusing on
responsible management and ethical commitment
of McDonald’s Cooperation international
franchising in fast-food sector. McDonald's
Corporation is the world's largest chain of
fast-food restaurants. Although McDonald's
did not invent the hamburger or the fast-food
restaurant, their name has become nearly
synonymous with both

4. Fast Food industry.
Fast food is a type of mass-produced food
designed for commercial resale and with a
strong priority placed on "speed of service"
versus other relevant factors involved
in culinary science. Fast food was created as
a commercial strategy to accommodate the
larger numbers of busy commuters,
travelers and wage workers who often did
not have the time to sit down at a public
house or diner and wait for their meal. By
making the speed of service the priority, this
ensured that customers with strictly limited
time

5. Introduction.
McDonald’s has worked hard to be more than a restaurant chain. It
has become a marketing icon and is part of the routines of millions
of people. Its success is so far reaching that it has developed its
own culture and identity. It has become a symbol of the success
and desirability of American popular culture.

6. Introduction.
McDonald’s operates more than 32,000 restaurants serving more
than 60 million customers in 117 countries. It has a 21 percent
share of the very competitive US fast food industry. Overseas
restaurants now account for half of the company’s profits.
The history of McDonald’s began in 1940 when brothers Dick and
Mac McDonald opened the first restaurant in San Bernardino,
California. The McDonald's restaurant gained fame after 1948,
when the brothers implemented their innovative "Speedier Service
System", an assembly line hamburger construction and self-serve
operation.

7. Introduction.
. In 1954, entrepreneur and milkshake-mixer salesman Ray Kroc
became interested in the McDonald's restaurant when he learned
of its extraordinary
capacity.
Upon seeing the restaurant in operation, he approached the
McDonald brothers with a proposition to open new McDonald's
restaurants, with himself as the first franchisee. Kroc worked hard
to sell McDonald's. He opened his first restaurant in Des Plaines,
Illinois. It was an immediate success, Kroc's new company was
originally named "McDonald's Systems Inc.", and was founded
March 2, 1955. In 1960, the company was renamed "McDonald's
Corporation".

8. What is McDonald’s organizational structure?
• McDonald’s organizational structure has the following characteristics, arranged according to significance in
affecting food service business operations:
• 1. Global hierarchy
• 2. Performance-based divisions
• 3. Function-based groups

9. Global Hierarchy:
• McDonald’s CEO directs the activities of all business areas through this structural
characteristic. Mandates and directives are passed from the CEO down to middle
managers, and to the restaurant managers and personnel in company-owned
operations and among franchisees. This feature of McDonald’s corporate
structure is typical of most global business organizations.

10. Performance-Based Divisions:
• Performance-based divisions are the most distinct feature of McDonald’s
corporate structure.
Prior to its reorganization on July 1, 2015, McDonald’s had the following
geographic divisions in its organizational structure: (a) U.S., (b) Europe, (c)
Asia/Pacific, (d) Middle East and Africa, and (e) Other Countries & Corporate
(OCC) including Canada, Latin America and Corporate.
After the reorganization, the company used performance as basis for the new
divisions in its organizational structure: (a) U.S., (b) International Lead Markets,
(c) High Growth Markets, and (d) Foundational Markets and Corporate

11. Function-Based Groups:
• : McDonald’s maintains function-based groups in its corporate structure. For
example, in corporate operations, the company has a People group for human
resource management, and a Supply Chain and Sustainability group for supply
chain management and sustainability endeavors. Each group is under the
leadership of a corporate executive or senior manager.
This organizational structure characteristic enables McDonald’s Corporation to
address the basic functions in its business.
Groups may be added or changed as the company grows and its target markets
change.

12. Advantages & Disadvantages of McDonald’s Corporate Structure
• Advantage
the hierarchy in McDonald’s corporate structure is its
support for monitoring and control of global
operations.
Also, the performance-based divisions have the
advantage of enabling the company in implementing
strategies based on market performance similarities
and related indicators. For example, the firm applies
similar strategies for all lead markets
• Disadvantage.
McDonald’s organizational structure is that it tends
to generalize strategies for the performance-based
divisions.
This issue limits business flexibility. Thus, McDonald’s
could improve its corporate structure by changing or
adjusting how these performance-based divisions are
used in strategic implementation

13. What are the functions of McDonald’s management?
McDonald’s Management Process:
• Planning
• McDonald’s has increased its market share through its acquisitions of smaller restaurant chains such as
Donato’s Pizza, Chipotle Mexican Grill, and Boston Market.
• In addition to its acquisition’s strategy, the corporation also has taken advantage of expanding into new
markets globally by opening restaurant franchises around the world.
• McDonald’s key executives understand that markets other than the United States have significant profit and
growth potential for the corporation. This includes understanding that different countries and cultures have
different tastes and preferences; therefore.
• McDonald’s offers different menu items in other countries that cater to local tastes and preferences, which
sometimes include menus based on cultural beliefs.

14. What are the functions of McDonald’s management?
McDonald’s Management Process:
• Organizing
• McDonald’s Corporation is a producer of materials, procedures, and processes for its worldwide restaurants.
It is responsible for ensuring every restaurant’s understanding of how to operate and offer its services to
customer.
• All McDonald’s restaurants serve the same menu items such as the Big Mac with cheese sandwich, although
some menu items may differ according to the restaurant’s country of origin.
• one of the corporation’s requirements of its franchisees is servicing customers as quickly as possible.
Interestingly, McDonald’s often tests new menu items during normal business activity .

15. What are the functions of McDonald’s management?
McDonald’s Management Process:
• Leading
• The corporation’s leaders are charged with leadership challenges that include cultivating high performance
teams and restaurants within the corporation.
• McDonald’s executive leadership also considers those outside the company, as a means of broadening their
scopes of thinking. This allows for creative thinking because it involves considering the external environment,
which facilitates the implementation of new strategies that ensure business success.
• McDonald’s has maintained a strong executive team structure for many years and the corporation’s
prosperity and successful growth is attributed to its strong internal CEO successions throughout the years.

16. What are the functions of McDonald’s management?
McDonald’s Management Process:
• Controlling.
• To ensure that the corporation’s franchises are run with a spirit of competition and uniformity, the corporate
policy includes franchisees offering standardized McDonald’s menu items, design layouts, branding, and
administration systems.
• McDonald’s franchisees are responsible for operating their restaurants in line with McDonald’s standards of
service, which include cleanliness and quality standards.
• The corporation’s management frequently audits and inspects its franchisees and failure to comply with
required standards can result in a franchisee losing its license (Patton, 2011).
McDonald’s has established a code of conduct for their Board of Directors to insure they act in the best
interests of the company.
• The code of conduct has also been established to apply to all employees of McDonald’s in order to insure
they act in a manner acceptable to the organization and that employees are committed to acting ethically in all
of the business deal.

17. What is the external environment of McDonald’s and how they deal with it ?
• PEST ANALYSIS
• analyze the current status of McDonald’s corporation, we chose to use the PEST method to evaluate the
following categories :
o P: Political
o E: Economic
o S: Social
o T: Technological

18. Political Challenges
• •Health and Safety Guidelines - The director of the obesity program for the Children's Hospital Boston, David
Ludwig, claims that "fast food consumption has been shown to increase calorie intake, promote weight gain,
and elevate risk for diabetes" Center for Science in the Public Interest, a long-time fast food critic over issues
such as caloric content, trans fats and portion sizes.
• •McDonalds changed its image vastly by evaluating the current menu and making changes to it from using
organic products to revising the whole menu entirely by offering salads and vegetarian burgers
• • Ecological/environmental issue – Fast food industry giants such as Wendy's, Pizza Hut, and McDonalds are
some of the largest consumers of paper products in the US. "Every year millions of pounds of food packaging
waste litter our roadways, clog our landfills and spoil our quality of life.
• Wars and conflicts war between countries where the company operates.

19. Economic Challenges
• • McDonald’s must consider economic challenges when expanding
internationally. Low set up costs = rapid expansion One of the challenges for fast
food industry is to keep the prices low for the customer. Franchising facilitates set
ups » McDonald’s corporation provides financing assistance and training for new
franchise owners to manage cash flow and keep businesses profitable

20. Social Considerations:
• • To ease customers concern about health issues, McDonald’s has made changes to the following;
• •McDonalds serve a range of high-quality foods that can fit into a balanced diet. The accurate and accessible
nutrition information help guests make informed menu choices
• • Emphasis on food safety:
• McDonald’s suppliers have food safety management systems in place, including Good Manufacturing
Practices (GMP), a verified Hazard Analysis Critical Control Point (HACCP) plan and crisis management, food
security and other applicable programs

21. Technological Challenges
• • McDonald’s has taken advantage of technology to streamline their processes and improve efficiency.
Through technology enhancements such as FPI's Help Desk Service, network and application consolidation, and
other technology implementations, operations of the company are greatly improved.
• • Touch Order Allows You To Place Order At McDonald’s Via Handset
• • The customers can place their order directly from their tables, dubbed as “Touch Order”. It’s the first self-
ordering system in the world to use RFID*
• • McDonald’s has also implemented technology to improve supply chain management, and allows
customers to access this information to make more informed decisions about what they eat

22. Conclusion.
• The changes undergone by McDonald’s Corporation’s operations since it was founded have been both good
and bad.
In addition, the corporation will continue to expand franchises into new markets throughout the world. Four
key management principles should continue to be addressed,
which include organizing, planning, leadership and controlling.
• McDonald's has to make changes and decisions that do not affect ethical standards of products or services
because of the external factors.
• McDonald's is an ongoing corporation that is the dominating fast food provider of the world, and continues
to evolve and stay number one in competition of the fast-food world.
They show the four functions of management at a top level as they evolve with both internal and external
factors on a daily basis.
• McDonald’s emphasis on proper conduct starts at the top of the McDonald’s organization and flows all the
way through to every employee. McDonald’s has established a code of conduct for their Board of Directors
to insure they act in the best interests of the company. The code of conduct has also been established to
apply to all employees of McDonald’s in order to insure they act in a manner acceptable to the organization
and that employees are committed to acting ethically in all of the business dealings impacting McDonald’s.

23. Refrances.
• References
o McDonalds Website https://www.mcdonalds.com
o Afonin, A. M., Afonina, V. E., & Itsakov, E. D. (2015). The Key Points of Building a Corporate Structure. Oxford Journal of Scientific Research, 1(9), 440-
447.
o Child, J. (1972). Organizational structure, environment and performance: The role of strategic choice. Sociology, 6(1), 1-22.
o Markides, C. C., & Williamson, P. J. (1996). Corporate diversification and organizational structure: A resource-based view. Academy of Management
Journal, 39(2), 340-367.
o Martin, R., Muuls, M., de Preux, L. B., & Wagner, U. J. (2012). Anatomy of a paradox: Management practices, organizational structure and energy
efficiency. Journal of Environmental Economics and Management, 63(2), 208-223.
o Sakhartov, A. V. (2016). Selecting Corporate Structure for Diversified Firms. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 11521).
Briarcliff Manor, NY 10510: Academy of Management.
o Michael, A. (2007). By focusing on the hours between traditional mealtimes, the fast-food giant is sizzling. New York: Business Week.
o Patton, L. (2011). Ronald McDonald Sidelined as Chain Toutes Lattes. New York: Bloomberg
• Kerry, C. (2010). A Golden Recipe for McDonald’s Europe. New York: Business Week
• Wikipidia.