Executive Summary

McDonald’s is among the major fast food corporations 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 amends its mission and vision statements regularly in relation to the changes in local and global fast food market environments. Developing and implementing a compelling mission and vision statement is an integral aspect of the corporation’s strategic policy management to facilitate corporate growth. The mission statement sets goals and procedures for the business thus establishing the company as a market leader in fast food production and service(McDonald’s, 2019). Conversely, the vision outlines the firm’slong-termobjectives pushing the organization towards progression, expansion, 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 dubbed “Plan to Win,” which is centered on providing customers with an exceptional experience through promotion, product placement, favorable pricing, and proper treatment of people. McDonald’s is committed to continuously evaluating and improving its operations to enhance the client experiences globally.

McDonald’s vision statement focuses on the company’s growth plan initiated in 2017, which states, “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” (McDonald’s, 2019).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 in Figure 1 below.In 2015, McDonald’s implemented a reformed organizational structure aimed at streamlining the multinational’s operations in various countries. At McDonald’s, the organizational structure is focused on managing the performance levels of multiple markets. As a result, McDonald’s must continually evolve 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 company. The main features of the organizational structure applied at McDonald’s are based on the fact that each division has specific tasks. Thus, the leadershipmodel supports regulatory flexibility and autonomy as well as universal hierarchy, functional groups, and performance centered divisions.

Figure 1: McDonald’s Company Hierarchy

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

Aside from the hierarchical model applied at the corporate level of McDonald’s, the franchise restaurants apply an organizational structure of their own as illustrated below. The chart shows various titles and management levels employed by the franchise. It is critical to note that McDonald’s corporate culture is defined as divisional becauseit contains four classifications based on the geographical locationsin the United States, Europe, APMEA (Asia, Pacific, Middle East, and Africa), and other continents.

Quality Management

Quality management is critical in ensuring food safety in the fast food industry. In that respect, McDonald’s has developed and implemented safety standards, which focus on science and apply risk-based principlescovering all processes from production to delivery. McDonald’s has performed various principles involved in food handling and implemented the same in multiple aspects of the supply chain up until the counter where the end users receive the products. The leadership of the corporation advances food safety from the lowest level 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(McDonald’s, 2019). Transparency is critical at McDonald’s since 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 their employees, suppliers, and franchises on food safety practices.Moreover, the multinational has established various quality centers in different continents including Europe, North America, and Asia. The quality centers are tasked with assessing the excellence of products as well as training suppliers(McDonald’s, 2019). Furthermore, various practices have been implemented at McDonald’s including agriculturalmethods, 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. The corporation integrates the food quality and safety management procedures 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 educated on food safety management, the supervisors and managers receive advanced training on the same to empower them to apply various risk management strategies(McDonald’s, 2019). McDonald’s restaurants undertake food safety checks on multiple procedures and standards at all restaurants globally on a daily basis.

One dominant strategy that McDonald’s has applied over the decades to ensure quality management is that each employee is required to first wok at the restaurant level before being stationed at the corporate level. The business strategy is because it ensures that each employee is well versed with the organizational functions and requires no additional training. Moreover, the executive department of McDonald’s often undertakes 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(McDonald’s, 2019). The surprise visits are carried out, and the corporate entity also outsources an independent firm to evaluate its quality. The importance of outsourcing consultancy services is to ensure that the evaluation performed is objective.

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 low as -2 percent and -4.5 percent in Asia, and the Middle Eastern region. The above statistics 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’semployed an aggressive marketing strategy, which has failed to address the firm’s plight. One of the significant issues affecting the organization is the loss of reputation resulting in the decline in popularity among customers(Trefis Team, 2015). 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 significant issues facing McDonald’s stem from quality and food safety issues. For instance, in Japan, McDonald’s was involved in a scandal with a meat supplier in 2014, and despite resolving the problem, the past event still affects the image and revenue of McDonald’s restaurants in Asia. In the first quarter of 2014, McDonald’s started to gain popularity in Asia leading to an increase in customers. However, after the scandal involving a meat supplier hit the headlines, the company experienced a rapid decline in the sales(Trefis Team, 2015). It was assumed that after a couple of months, the impact of the incident would not be felt by the company.Unfortunately, since the incident occurred, McDonald’s was unable to regain its previous position in the Asian market(Trefis Team, 2015). The meat supplier incident leads to the customers developing a negative image of McDonald’s, and in Asia, the corporation is associated with poor food quality.

A report by the Reputation Institute reveals that in the United States, McDonald’s had a reputation scale of 55.3 on a range of 0-100 in 2015. The results mean that the fast food organization ranks averagely compared to other businesses. Furthermore, the reputation score for McDonald’s in 2014 was at 64, which shows that a decline was experienced in 2015(Trefis Team, 2015). On the other hand, McDonald’s competitor Chipotle experienced an increase in reputation score from 69.4 in 2014to 74.2 in 2015(Trefis Team, 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 meat 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 thatrespect, it is critical that McDonald’s develops and implements stringent measures to improve quality. On the other hand, as the dynamics of the food industry shift towards healthy options, fast food companies need to change their focus. In the last year, McDonald’s announced their decision to use chicken raised in a healthier environment free from antibiotics in their meal packages. The move is expected to boost the image of the corporation in the long term.

References

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

McDonald’s. (2019). Food Safety and Quality. Retrieved from https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food/foodsafety.html

Trefis Team.(2015). Why Is It Important For McDonald’s To Focus On Quality? Retrieved from https://www.forbes.com/sites/greatspeculations/2015/10/08/why-is-it-important-for-mcdonalds-to-focus-on-quality/#6105d9992488

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