Executive summary

McDonald’s is one of the largest fast food franchise company in the world. Established in the United States in the 1940s, the company has over 37,000 outlets operating in over 100 countries. Due to the dynamics of the fast food industry, McDonald’s adjusts its corporate vision and mission statements regularly as a response to the changes in local and global fast food market environments. At McDonald’s developing and implementing a compelling mission and vision statement is an integral aspect of the corporations strategic and policy management to facilitate improvement and growth. The mission statement sets goals and procedures for the business establishing the company as a market leader in fast food production and service.  Conversely, the vision outlines the corporation’s long term goals pushing the organization towards improvement, growth, and sustainability.

According to McDonald’s 2018, the firm’s mission is to ensure that they are the preferred destination to eat and drink worldwide. Hence the organization has implemented a global strategy called” Plan to Win” centered on providing customers with an exceptional experience through promotion, product, place, price, and people. McDonald’s is committed to continuously evaluating and improving its operations to enhance customer experiences globally.

McDonald’s vision statement focuses on the company’s growth plan initiated in 2017, “to move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.” Therefore the vision focuses on the improvement of the corporation as well as rapid and profitable growth. The corporation’s business strategy focuses on various areas that are critical to achieving its vision including local integration, progressiveness, inclusiveness and responsible leadership.

Organizational structure

As previously stated, McDonald’s is a franchise corporation operating in various geographical locations. To ensure that all franchisees share and adhere to the corporation’s vision and mission’s statement, the company has numerous departments in the organizational structure as illustrated below.

Link:https://www.hierarchystructure.com//wp-content/uploads/2015/06/McDonald%e2%80%99s-company-hierarchy.png

In 2015, McDonald implemented a reformedorganizational structure aimed at streamlining multinationalsoperations in various countries.  At McDonald’s the organizational structure is forced on managing performance levels of multiple markets. As a result of McDonald’s continually evolves to address numerous issues of emerging and diverse markets. In response to the dynamic changes in customer needs, tastes and preferences McDonald’s rolls out new and innovative products.  Therefore the organizational structure is developed to facilitate interactions between various business components of the organization. The main features of the organizational structure applied at McDonald’s are based on the fact that each division has specific tasks. Thus the organizational structure supports regulatory flexibility and autonomy. Thus the following characteristics global hierarchy, function-based groups, and performance-based divisions.

Aside from the organizational structure applied at the corporate level of McDonald’s, the franchiseerestaurants apply an organizational structure of there own as illustrated below in the organizational chart. The chart shows various levels employed by the franchise. It is critical to note that McDonald’s corporate culture is defined as divisional as there are four classifications based on geographical location United States, Europe, APMEA(Asia, Pacific, middle east and Africa) and others.

Quality management

Quality management is critical in ensuring food safety in the fast food industry and this respect McDonald has developed and implemented food safety standards which focus on science and apply risk-based standards from production to delivery. McDonald’s has performed various principles involved in food handling implemented in multiple aspects of the supply chain up until the counter where the customers receive the products.  The principles applied include; Leadership was by the corporation advances food safety at the lowest to the topmost level of the supply chain. Secondly, the organization employs a global approach whereby intelligence and science are implemented in global markets to manage the risks involved. The third principle is personal responsibility which includes all employees at various levels ensuring that they are empowered to make the decision and take actions to develop innovative approached to manage food safety. Accountability focuses on suppliers and Franchisees who are required to adhere to the corporation’s food safety standards ensuring consistency in global markets. Transparency is critical at McDonald’s as the firm has developed systems that facilitate the sharing of food safety practices with stakeholders both internally and externally.

Quality management at McDonald’s is not limited to the quality control department but rather the organization as a whole through the development and fostering of a food safety culture.  From the executive management to the subordinate staff all are involved in ensuring quality levels are achieved.  To support the stakeholders, McDonald’s have numerous programs that educate employees, suppliers, and franchisees on food safety practices.

Also, McDonald’s has established various quality centers in different parts of the world including Asia, Europe, and North America. The quality centers are tasked with assessing the quality of products as well as training suppliers.Furthermore, various practices have been implemented at McDonald’s including good agriculture practices, quality management systems, distribution center quality management programs, and supplier food safety systems. Suppliers of raw and processed materials, as well as logistics providers, are required to implement McDonald’s food safety management systems.

At the restaurant level, food safety standards are applied universally at McDonald’s. McDonald’s integrates the food quality and safety managementprocedures in training and operations programs. McDonald’s also involves a hazard analysis of various control points in food preparation. Aside from all the employees being trained on food safety management, the supervisors and managers receive advanced training on the same to empower them to apply various risk management strategies. Daily, McDonald’srestaurants undertake food safety checks on multiple procedures and standards at all restaurants globally to ensure food safety.

According to a 2012 report on CNN money an estimated 64 million people globally eat at McDonald’s daily. This figure has continued to grow in the last five years as the company opens new outlets globally. One dominant strategy that McDonald’s has applied over the decades to ensure quality management is that each employee that work’s at the corporate level at the Corporation is required to first wok at the restaurant level. The business strategy is useful in that it ensures each employee is well versed with the organizationalfunctions and requires no additional training.

Also, the executive department of McDonald’s often carries out surprise checks at various outlets with the aim of evaluating and determining the quality standards applied in each restaurant. Consistency in quality is critical to McDonald’s like the image of one restaurant affects the perception of the brand globally. The surprise visits are carried out, and also, the company outsources an independent company to evaluate its quality. The third party is outsourced ensuring that the company receives an objective evaluation.

Recommendations

In the second quarter of 2015, McDonald’s food chain experienced a global sales decline of 0.7 percent. In the United States alone the figure was as slow as -2perecenta and -4.5 percent in Asia, Pacific, and Middle Eastern region. The above figures area clear indication that McDonald’s is gradually losing its existing customers to a list of competitors including Starbucks, Dominos, Subway, Burger King and KFC among others. In response to the apparent threat of competitors, McDonald responded with an aggressive marketing strategy which has failed to address the firms plight. One of the significant issues affecting the firm is the loss of reputation resulting in the decline in popularity among customers. To ensure that McDonald’s regains its customers and attracts new business, the firm needs to evaluate and develop business strategies focused on the quality of products and services.

It is apparent that the major issues being experienced by McDonald stem from quality and food safety. For instance in Japan, McDonald’s was involved in a scandal with a meat supplier in 2014, and despite resolving the issue, the past event still affects the image and indeed revenue of McDonald restaurants in Asia. In the first quarter of 2014, McDonald’s had started to gain popularity in Asia, increasing to customers. Immediately after the scandal involving the meat supplier hit the headlines, the company experienced a rapid decline in the sales. It was assumed that after a couple of months the impact of the incident would no longer affect the company and the deals would shut again but unfortunatelysince the incident occurred McDonald’s has not regained its previous position in the Asian market. The meat supplier incident leads to the customers developing a negative image of McDonald’s, and in Asia, the company is associated with poor food quality. As a result, the company has lost its market base in the APMEA region.

Also, a report by the Reputation Institute reveals that in the United States McDonald’s has a reputation scale of 55.3 on a range of 0-100 in 2015 meaning that it is an average company. Furthermore, the reputation score for McDonald’s in 2014 was at 64 thus a decline was experienced in 2015. On the other hand, McDonald’s competitor Chipotle experienced an increase in reputation score from 69.4 in 2014to 74.2 in 2015. Chipotle’s rise in reputation score is attributed to the organization’s strategy of applying the “Food with Integrity” approach. Chipotle has recently implemented an action that hinders the serving of pork dishes at its restaurants until the pork suppliers meet a set of strict quality measures outlined by the organization. It is apparent that customers in various parts of the world are much concerned about the quality of food they receive and in this respect, it is critical that McDonald’s develops and implements more stringent measures to improve quality. On the other hand as the dynamics of the food industry shift towards healthy food options, companies need to shift their focus. In the last year, McDonald’s announced their decision to use chicken raised in a healthier environment free from antibiotics, is expected to boost the image of the company in the long term.

References

McDonald’s Company Hierarchy retrieved athttps://www.hierarchystructure.com//wp-content/uploads/2015/06/McDonald%e2%80%99s-company-hierarchy.png

Food Safety and Quality retrieved at https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food/foodsafety.html

Trefisteam(2015)Why Is It Important For McDonald’s To Focus On Quality?retrieved at https://www.forbes.com/sites/greatspeculations/2015/10/08/why-is-it-important-for-mcdonalds-to-focus-on-quality/

 
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