Mcdonald's Structure

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HBH222 Organization and Organizing
Case Study 1
The organization I have chosen to observe is McDonald’s. McDonald’s Corporation is a popular fast-food chain under the retail sector. It has lived to create history since the 50s and is now a global fast-food chain with more than 30,000 locations in 119 countries including Germany, Brazil, Japan and recently India (James 2009). McDonald’s have around 40 million customers visiting the store each day. In the early 80s McDonald’s was famous for its fast food but now the restaurant is mainly famous for its burgers, ice cream and French fries especially. McDonald’s corporate symbol is very recognizable and has been successful with advertising their brand image and logo in the minds of millions of people. Furthermore, another strength of McDonald’s is the customer’s perceived product value. Customers know what to expect when they walk in a McDonald’s restaurant. The biggest area of operation happens in the kitchen place where McDonalds employees stock, prepare and organize food to be sold to customers right after their order is taken, hence explains the term fast food. McDonald’s has two structures at two different levels; the first is at the corporate level and the second, restaurant level. The corporate’s current design type is functional while the restaurant’s current design type is divisional.

Image 1: McDonald’s Corporate Structure
The image above illustrates a hierarchy in McDonald’s corporate structure. It consists of the Chief Executive Officer (CEO) on top followed by the chairman of the board to the board of directors. Legal and secretary comes after, followed by human resources to President of APAC and MEA which refers to Asia Pacific, Middle East and Africa where McDonald’s franchises first opened during the 80s and 90s. Standing 8th place in the hierarchy is Chief Operating Officer (COO) followed by Chief Financial Officer (CFO) to sales and finance managers (Leadership 2012). Henceforth, McDonald’s design type in the corporate structure is functional. Functional structures are normally used in rather big companies like McDonald’s. Employees within the company are differentiated to carry out a specialized set of tasks (Gailbraith 2010). For example, the Human Resources department’s specialized task is recruiting and training as well as making sure the right people with the right talent are able to work within the company. A functional structure is described by a large degree of formalization, creating standardized ways of operation. Decision-making in a functional structure is centralized at the top of the hierarchy, which in McDonald’s case, done by recent Chief Executive Officer (CEO) Don Thompson (Desmond 2012).

Image 2: McDonald’s Restaurant Structure
The image above shows the operational level in a standard McDonald’s restaurant. It consists with the general manager on top followed by the restaurant manager branching out the first assistant to second assistant manager while another branch comprises a shift running manager who deals with the floor manager, followed by the staff training crew and lastly the crew members. This structure proves that McDonald’s in restaurant level is divisional. A divisional structure normally consists of numerous corresponding teams focusing on a single product, which in McDonald’s case, the General Manager is the one who is in control of the other assistants and the employees focus on providing service and selling the products. McDonald’s utilizes the divisional structure in restaurant level for the reason that a team is able to focus upon product and service with a leadership structure that supports its major strategic objectives (Gillikin 2012).

Since McDonald’s corporate and restaurant structure are functional and divisional respectively, I can safely assume that McDonald’s Organization structure as a whole is a matrix. A matrix structure is basically a hybrid of divisional and functional structure. McDonald’s make use...
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