Mcdonald's Organizational Behavior

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McDonald’s and Its Crisis

What should a company do when its core product is considered “unhealthy” or even “harmful” by the public? Is it even possible for such a company survive and thrive; or will it have to shut down its business? McDonald’s fast food has for a long time been considered unhealthy by the public. In recent years, the health conscious trends have become increasingly popular. Moreover, many scientific studies and findings have surfaced and successfully confirmed that children’s increasing intake of fast food, which often contains high sodium content, sugars, saturated fats, and calories, for a long period of time would lead to childhood obesity. Moreover, obese children have a much higher risk of many health problems such as coronary heart disease, high blood pressure, diabetes, and certain cancers--all of which are fatal if left untreated.

In 2010, a mother from California sued McDonald’s over the company’s marketing practice of Happy Meal. The mother claimed that McDonald’s used alluring toys to lure kids into Happy Meal. This lawsuit, which might be viewed by many as senseless and absurd, was one of McDonald’s biggest cases. In order to come out of the lawsuit ahead, this largest fast food chain had to undergo some major organizational changes. In this paper, we would like to use the knowledge learned in the class to analyze the event (the lawsuit) and its effects on McDonald’s.

The paper will have four main parts. In the first part, we provide a brief introduction of the company, McDonald’s, and the lawsuit. In the second part, we will use the concepts learned in class to analyze Happy Meal’s influencing strategies and the organizational changes during and after the suit. We believe that Happy Meal’s influencing strategies deserve our attention as they were the main causes of the crisis. Since its Happy Meal’s influencing tactics were so effectively and successfully executed, McDonald’s became the obvious target of the mentioned legal dispute. In the third part, we will offer our evaluations, pros and cons, of McDonald’s strategies and tactics in handling the crisis. Finally, in the fourth part, depending on our evaluation of how McDonald’s control of the situation, we want to offer our recommendation to parts of the company’s strategies which in our opinions could have been improved. Also, since we overall felt that McDonald’s managed the crisis extremely well, we recommend its strategies to be implemented to Jack in the Box, which faced a similar situation to McDonald’s. However, unlike McDonald’s which vigorously fight for the continuation of its using toys to push Happy Meal sales, Jack in the Box decided to drop toys in its Happy Meal when it was faced with the pressure from the public. We believe McDonald’s implementation of strategic changes could have helped Jack in the Box to put toys back to its Happy Meal.

<I> Introduction

McDonald’s Corporation is the world's leading food service organization. The corporation started out as a small drive-through in 1948 by two brothers, Dick and Mac McDonald. In 1961, Raymond Albert Kroc, a salesman, saw a great opportunity in the market at the time and bought the business from the McDonald brothers. By 1967, McDonald’s began its first business expansion to countries outside of the United States. This unyielding expansion resulted in the opening of 23,000 McDonald's restaurants in 110 countries in 1994. Today, McDonald's, the leading fast food chain, had twice the market share of its closest U.S. competitor, Burger King. In fact, McDonald’s market share represented 7 percent of total U.S. eating-out sales (Cohen, 2009, p8-2, p8-3).

There are several major influences and factors--such as government, customers, social trends, and so forth--which play an important role in shaping organizational behavior.In the recent years, McDonald’s corporate image has been negatively affected by adverse publicity. For example,...
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