Management and Organizational Behaviour - McDonalds Experience - Case Study Example

Management and Organizational Behaviour Introduction Management and organizational behavior can be identified as the act of getting people together to achieve common goals and objectives and it is the study and application of knowledge about how people, individuals, and groups act in organizations (Buller, 2003). Thus it is a five-function based approach to managing the work environment in a business organization. Management consists of those functions that a manager has to perform in this environment including planning, organizing, staffing, leading/directing and controlling. Business organizations are those legal entities that engage themselves in the production of a good or service with the intention of selling it for a profit and are much more focused on the long run survival in achieving organizational goals such as profitability, shareholder satisfaction, market share and share price growth, corporate governance, sustainability, market leadership and so on. However the modern conceptualization of the business organization as a paradigm that sets trends to be followed by societies in which they operate thus influencing the very behavioral dynamics of the members of those societies, is far more revolutionary and thought provoking. It's common practice to construct contingency theoretical and conceptual management frameworks in controlled situations. Thus this framework would encompass a series of endogenous and exogenous variables such as management related conceptual paradigms - management process planning, Human Resource Management (HRM) function, leadership roles, work schedule preparation, quality management function, marketing planning and other related functions. The subsequent framework would engender a theoretically determined structure of aims thus bringing up and addressing related issues. McDonald's has adopted an admixture of employee motivation, organizational leadership and team effort building approaches at its culturally varied network of restaurants in North America and the rest of the world. 2. Analysis George Ritzer (2007) used the term "McDonaldization" in his book "The McDonaldization of Society" for the first time in 1993. According to him social transformation processes can assume such extreme characteristics like that of a fast food restaurant. The contemporaneous paradigm of thought attributed to McDonald's by Ritzer is of theoretical and conceptual significance in the context of the evolving organizational culture. In the first instance the organization's ability to leave an imprint on the societal transformation process by enticing its members to adopt the former's characteristics would inevitably have an impact on the long term organizational outcomes that concern both the society and the organization. McDonald's has become a way of life for some Americans. The same is true for many others in other continents. For instance Asians are highly influenced by McDonald's in their food habits. This subtle and yet highly controversial acculturation process has been at the heart of the McDonaldization of society. Business organizations operate in their respective environments as determined by organizational structure, culture, leadership, strategic competitive environment and a host of other internal and external influences such as the regulatory framework, PESTEL and SWOT environments. Given the degree of influence under these circumstances, each organization adopts its own leadership style with a view to achieving these organizational goals such as profits, market share growth, higher share prices, quality improvements, brand loyalty, sustainability, benchmarks and so on. These organizational goals can be divided into short term goals and long term goals. Organizational leadership and team building skills play a very significant role here. 2.1. Leadership styles There are many different leadership styles in the modern business world and almost every one of them has a particular reason or reasons for its existence. It must be noted at the beginning that in a comparative analysis like the present one, a rigorously norm-predicated comparison/contrast study would be more feasible than a prescriptive analysis. Burns (1978) invariably identifies a set of norms for each leadership style, i.e. transformational and transactional. His theoretical conceptual framework of analysis has a universal tone of agreement among scholars though the learning outcomes of research efforts have greatly focused on the contingency model building capacity rather than independent overarching framework creation. However this paper does not focus on trait and behavioral leadership theories 2.1.1. Transformational leadership style Transformational leadership style defined as concerned with employee welfare and subsequent productivity goes with contingency theories. Practically modern organizations like McDonalds have been performing well by using efficient performance related barometers thus successfully matching the skills requirements of the company with the skills of new recruits and paying a higher salary plus a monetary incentive based on performance of employees to perform better (Facella, & Adina, 2008). And also employees might need non-monetary incentives to perform much better. Transformational leadership has a set of category constructs such as values, morals, farsightedness, long term goals, principles, acute awareness about the dividing line between causes and symptoms, mission statements, strategic perspectives and human resources. McDonald's current policies have been partially or wholly influenced by these norms. The transformational leader has the ability to integrate his functions into the internal structures, processes and systems of the organization. Thus the integration process becomes a success because in the process even values are incorporated into the outcomes. On the other hand the transactional leader diverges too much from the accepted normative tendencies (Bass & Bernard 1997). Norms and beliefs are part and parcel of the organizational culture and therefore they need to be treated with equanimity. The success of the transformational leader depends on this seamless integration of human values into the organizational structures. It's obvious that he articulates a systemic approach to long term organizational goals. On the other hand the transactional leader believes in the incontrovertible power structures within the organization. Transformational leader seeks with fervent hope to inculcate a sense of responsibility and pride in achievements among the subordinates. A critical theoretical perspective that has been developed on this particular aspect looks at the transformational leader's attitude towards hisher subordinates as power-sharing partners whose contribution to the productive process is rewarded with acknowledgment. Transformational leadership has a set of category constructs such as values, morals, farsightedness, long term goals, principles, acute awareness about the dividing line between causes and symptoms, mission statements, strategic perspectives and human resources. McDonald's current management policies have been partially or wholly influenced by these norms. 2.1.2. Transactional leadership style On the other hand transactional leader seeks to inculcate a sense of reciprocity among his subordinates based on realizing mutually beneficial goals such as productivity, performance and target outputs. In return the transactional leader rewards the subordinate with pay, recognition and praise. The transactional leader just reciprocates in kind with identical benefits being showered on the subordinate. Thus in the latter relationship the leader defines the objectives to be achieved and convey them to the subordinate with the same clarity that is expected of subordinates in identifying the significance of organizational goals. In other words the transactional leader seeks the support of subordinates to achieve wider goals of the organization through direct control over them. Staff requirements are reflected in increasing efficiency and work standards. Organization's performance metrics have been positively influenced by these strategic changes. According to the researchers knowledge workers placed themselves at the helm of affairs by controlling the information flow about the workplace requirements (Kincheloe, 2002). Given the theoretical perspectives of these modern theories the psychological bias is obvious. In fact the average employee has a series of expectations including ability to adjust to the work environment, capabilities to identify and respond efficiently to day-to-day problems in the workplace. Thus these theories focus on the individual's performance and the corresponding reward. The transformational leader has a long term vision and therefore he adopts the appeal principle, the bonding principle and the confidence principle to achieve these organizational goals. On the other hand the transactional leader is influenced by position, power politics and monetary benefits that allow him little freedom to think of long term organizational goals. He depends on hard and fast statistics in making important decisions. This is in stark contrast to the former's human touch. 2.2. Team skills building efforts at McDonald's HRM philosophy should center on a hybrid model of the time, i.e. a good admixture of performance-based incentives, people orientation and share ownership in the company that would motivate the average employee to perform better. In the first instance modern organizations like McDonalds has done better by creating proper channels of communication for continuous feedback of information, especially from the lower layers. Secondly employees could have been encouraged to take part in service 'quality improvement circles'. These team-based skills development have helped McDonald's to create a culture of good organizational behavior. Organizational culture succinctly defined as a system of beliefs, values, norms and concepts commonly shared by the members of an organization, is typically the basis of many management styles. McDonald's has a very positive organizational culture based on an equally positive system of customer-centric values. People orientation is basically a concept associated with democratic organizational structure and management style. Team work thus presents the best alternative against possible antipathy to change by individual employees (Michael, &Noreen, 1995). Total Quality Management (TQM) and Kaizen approaches have enabled the modern business organization to create teams or circles among employees to effectively perform such tasks as quality improvement and productivity targeting. The system is intended to measure such variables as quality, service and people by using standard metrics. This system has enabled the company to identify and benchmark areas of improvement though such metrics depend exclusively on available data which could be influenced by bias and prejudice. Excessive reliance on financial metrics can be highly misleading because the process of modern innovation is invariably targeted at customer value creation, external supply chain management, internal value chain, international HRM practices, better employee relations, quality improvement and process and technology improvement. Organizational goals are rarely obvious to average employees when they are isolated into teams. Indeed employees can be considered as an important resource in any organization. Employee relations or labor relations have to be executed by the manager in such a manner that his management gals are compatible with organizational goals. The manager ought to have the kind of negotiating skills to deal with employees' representatives such trade union leaders. In the performance of the HRM function the manager is not only a leader but also an executioner of strategy, i.e. the proper management of the HRM function depends on his personal skills (Narasimhan, 2005). The ability to develop the hidden skills of his subordinates and to train them in the latest techniques matters as much as the ability to sustain the workforce at its peak level in competition against rivals matters. McDonalds indeed adopted some far reaching HRM practices to achieve organizational goals. The most powerful motivator of the workforce was the requirement to become shareholder of the company in addition to being an employee. Next the company encouraged team work in which 3 to 4 employees were teamed together so that time waste in coordinating work effort could be reduced and employees would be motivated by team spirit. In addition to these employee friendly work practices and motivators a number of others were also adopted. Conclusion Organizational management has been described in a variety of terms by analysts and the related learning outcomes such as productivity, employee satisfaction, customer satisfaction, customers' impact on organizational goals, internal value chain and supply chain management, HRM practices and policies, quality management, VRIO applications and domain maintenance are part of this overall strategic orientation. Management function as a multifaceted task is invariably connected with the corporate goals of the organization. Thus motivation, team work and leadership style have one particular aim, viz. meeting the challenges of the strategic competitive and operational environments of the organization. Particularly the functional parameters associated with leadership and teamwork skills have undergone a rapid transition. Such parameters have increasingly been redefined by modern theorists to improve a variety of work environment based practices. However McDonalds existing strategic management initiatives and policies have substance but they lack direction because employee motivation and welfare, proper leadership style and teamwork enhancement programs do not produced results in the short run. In other words McDonalds must adopt a very long term strategy based on targeting not only employees but also re-orienting them to meet overall management challenges both in policy design and implementation. REFERENCES 01. Bass & Bernard M 1997, 'Does the transactional-transformational leadership paradigm transcend organizational and national boundaries', American Psychologist, vol. 52, no.2, pp. 130-139. 02. Burns, JM 1978, Leadership, Harper & Row, New York. 03. Buller, PF 2003, Managing Organizations and People: Cases in Management, Organizational Behavior and Human Resource Management, 7th edn, South-Western College, Winfield. 04. Facella, P & Adina, G 2008, Everything I Know About Business I Learned at McDonald's: The 7 Leadership Principles that Drive Break Out Success, McGraw-Hill, New York. 05. Kincheloe, JL 2002, The sign of the burger: McDonald's and the culture of power, Temple University Press, Philadelphia, 2002. 06. Michael, M &Noreen, H 1995, 'The high-performance organization developing teamwork where it counts, 'Management Decision, vol.33, no.2, pp.56-63. 07. Narasimhan, K 2005, 'International Handbook of Organizational Teamwork and Cooperative Working', The TQM Magazine, vol.17, no.4, pp.375-376. 08. Ritzer, G 1993, The McDonaldization of Society, Pine Forge Press, Thousand Oaks. Read More