McDonalds Organizational Change - Essay Example

? MacDonald’s organizational change Major economic changes in the world required organization changes and procedures to be able to keep up with the changing world. As a result, this paper will discuss the implications of these changes to the organization and all stakeholders. It will also discuss the impact of globalization that has led to organizational change. The world has become so dynamic with various changes being experienced in all sectors of organization. This has mainly been spearheaded by globalization. Globalization has seen a tremendous reduction of trade barriers by various countries e.g. tariffs, export fees and even import quotas. There has been a reduced restriction on the movements of capital from one country to another together with investment. These changes has increased comparative advantages of various companies that are currently rushing to open up various branches in the world as it has become easy to manage them due to increased information flow and improved technology. One of the companies that have recorded tremendous changes over the past decade is MacDonald’s company. The company deals with fast foods a sector that faces a lot of competition as result of mushrooming of food vendors both small and huge companies. As a result there was a need to change the old management system in order to install new skills that have adequate knowledge concerning the current global market. There have been an increase in the number of multinational companies that deal with fast food e.g. KFC. This has necessitated a reshuffle in the top management in order to be able to diversify and increase skills required in retaining the company competitiveness. The company has looked for leaders who have the latest skills and experience concerning the latest market trends (Roch & Boivin, 2010). Initially, the company agitated for individual work so that one can have an individual performance appraisal. This was meant to ensure that the employees work harder for their work to be recognized during awarding of the most hardworking person. Due to the latest organizational changes, the management has instead preferred to change this working strategy to instill teamwork. This has worked in helping the organization deal with different challenges that may face the organization. This is because team members are able to come together and bring about different ideas that can solve the current challenge. Team groups in an organization have also made it easy for the management to manage the organization easily. This is because the management is able to appoint team leaders who report to them. The major implication of this move is that it has enabled the company to diversify its operations as the management has the opportunity to monitor the performance of other branches that are spread in different parts of the world (Huber & Glick, 1995). Macdonald has seen a tremendous change in organization culture. A culture of an organization plays a great role in setting the performance of the organization in the market. One of the major changes has been on power distance. This is the extent to which less powerful employees of the organization are treated unequally by their leaders. Initially leaders in the organization kept a distance and never related with other employees. Instead they used an intermediary or when they meet they addressed the whole group as they had no time for a single person enquiry. This created a rift between the employees and leaders an aspect that reduced the morale of the workers in the organization. This also put a barrier to employees who wanted to report any issue that may have been affecting the organization performance or the relation of the employees with each other. The change that has been implementation is open office policy. This is a policy which encourages any members of staff to meet the management and leadership of the company in case there is an issue or enquiry that the management can solve. This change has been received with a lot of positive attitude from the employees who now feel motivated as their issues are solved by top management. This has also encouraged a culture of innovation where member of staff who has an idea that might help improve the performance of the company or improve its competitive is free to present it to the management (MacDonald’s corporation, 2009). Another culture that the company has worked to eliminate is individualism. Initially leaders in the organization never considered the interests of some stakeholders such as employees, society suppliers and customers. With the saturation of the market by the competitors, a change was required in order to create stakeholders trust on the overall management. As a result, excessive powers that were embedded on a single individual were distributed to board of governors that are currently mandated to make crucial decisions in the organization. From then henceforth any decision that was to be make by the organization was to incorporate the interests of all stakeholders. As a result, the company improved a relationship between the company and its stakeholders. In addition more stockholders were attracted to invest in the company an aspect that increased company’s capital which is a competitive tool. Since then, the company has recorded immense growth while at the same time balancing the interests of all stakeholders (MacDonald’s corporation, 2009). Companies have been in the past decade been practicing racial discrimination. In the present day diversity is an important tool that is used to attract customers that are from diverse cultures, race, tribe and religion to purchasing the company’s products. This ensures that the company is able to penetrate different markets in the world. In reaction to this, MacDonald’s reviewed their policies to incorporate diverse people in the company. Diversified skills in the company have enabled the company to face different challenges in the market (Aderohunmu, 2004). In the past decade, male personal dominated many positions in the company. As a result, changing sensitization on gender disparities affected the consumption behavior of the organization. This has led MacDonald’s to remove all gender disparity in the company’s policies and activities in order to give room to all genders to apply for any position in the company. This change has encouraged the minority group to have positive attitude and trust towards MacDonald’s company. Major impact of this move is that it has increased the market size of the company. The company has also created a good reputation in the market (Roch & Boivin, 2010). Performance of the company largely depends on the risks and uncertainties may face the company or its employees. As a result the company has changed on ways to avoid risks and uncertainties by the employees through giving the employees health insurance, retirement benefits and housing benefits. These benefits have enabled the workers to be dedicated to their work as their security is guaranteed by the company. employees have also improved a positive attitude towards their companies making them to perform to their best. There has been a change on rewarding system. Currently, the company has become transparent in its operational system an aspect that has encouraged many workers to work harder in order for them to be rewarded. This has impacted in the overall performance of the company and the revenue collected by the company (Roch & Boivin, 2010). Another major change that the organization has undertaken is the diversification of its operations in various parts of the world. In the past decade, the company has opened various branches in different parts of the world as a measure to increase its revenues. This has been accompanied by employing various managers who are answerable to the main headquarters. Decentralization of its operation has increased efficiency and accountability of the management. This change has increased company competitiveness in the market due to its massive financial capabilities over its competitors. This has enabled the company to position itself in the market. It has also been able to segment the market and create customer loyalty towards its products (Roch & Boivin, 2010). The image of the company plays an important role in creating a positive reputation. As a result MacDonald branded its products to differentiate itself from its competitors. As a result the company has been able to gain more customers and revenues as customers can be able to differentiate its products from those of the competitors therefore preventing confusion in the market (Aderohunmu, 2004). MacDonald’s company has seen a dramatic change in the channel of communication. When a company lacks efficient communication strategies it is likely to suffer from misunderstandings that may arise. The companies have therefore set aside an efficient human resource department that is mandated to ensure that grievances of the employees are looked at efficiently. Major impact of this move is that there has been increased morale by the employees as they are psychologically motivated. Currently the leaders engage the employees frequently in order to listen to their grievances some which might have adverse effects on the overall performance of the company (Mills, Dye & Mills 2008). The company has changed its relationship with the society. The company has done this through increasing its funding to various groups as its mission in improving its contribution towards social corporate responsibility. Some of the beneficiaries of these programs have been learning institutions, health centers and even sports clubs. As a result, the company has been able to create a good relationship with the society. It has also made the customers to have trust on the company as the image of the company is improved. On the other hand the lives of the citizens have improved due to provision of different services by the company (Aderohunmu, 2004). MacDonald’s company has changed its focus on the local markets and in turn targeted the global markets. This has been through standardization of its operations. This has enabled it to build its brand equity and attain global recognition an aspect that has improved its competitiveness in the global market. It has gone further to train its employees in order to reach the international standards. One of the major impacts of this training is the improved performance by the employees and improved service delivery by the company. This has also enabled the company to penetrate the markets and attract its own target customers (Huber & Glick, 1995). The company has changed its operation. The company has therefore, mechanized its operations. In the past decade, the economies of the countries have fluctuated tremendously. This situation led to collapse of some companies as they are unable to support their operations. In reaction to these risks, the companies has reduced the number of employees in one organization and instead distribute them in different branches across the globe. Mechanization of its operations has seen reduced costs of production. This has led to increased revenues and production. The risks and uncertainties that could have faced the employees e.g. injuries have been reduced as the number of employees have been reduced (Mills, Dye & Mills 2008). The latest technological advancement has been characterized by mushrooming of advertisement channels. One of the widely method that companies are currently using is social network. Many companies have invested much on marketing department in order to diversify their advertisement strategies as this area has been referred to be an important channel of attracting new customers to purchase the products. MacDonald’s have not been left behind in this race to attract almost a constant number of customers. They have changed the organizational structure to incorporate a marketing department that is involved in the advertisement of the company to potential markets. The department has made a recommendable progress especially in advertising through social media, company’s website and using both audio and visual media. Social media has also given the company an opportunity to communicate with the customers directly. This has helped the company in understanding different requirements by the customers. In addition it has helped the company in identifying the changes in customer behavior. They also identify any gap that might be in the market. This gives an opportunity for the company to make more profits before the competitors can venture in and invest in the same opportunity. This has made the company one of the leading organizations in the fast food industry (Aderohunmu, 2004). In the last decade, companies specialized primarily in one product. Due to increase in competition companies have opted to diversify their operations. This move was aimed at reducing risks and uncertainties. Since fast food was prone to competition which reduced total revenues, MacDonald’s company opted to diversify its diets. In china MacDonald’s have gone ahead to start offering traditional menu as Chinese people like traditional foods. Diversification improved the market size and attracted more customers to purchase the products (Huber & Glick, 1995). References Aderohunmu, R. (2004) McDonald’s Restaurant, 2, 1-36. Huber, G. P., Glick W. H. (1995). Organizational Change and Redesign: Ideas and Insights for Improving Performance, Issue 1995. Mills, J H., Dye K., Mills, A J. (2008). Understanding Organizational Change. Taylor & Francis MacDonald’s corporation (2009) worldwide corporate social responsibility online report: The values we bring to the table. Retrieved from http://www.mcdonalds.at/presse/maps/McDCSR.pdf Roch, J., Boivin (2010). Corporate identity and strategic change: the case of MacDonald’s. retrieved from http://www.usherbrooke.ca/ceot/fileadmin/sites/ceot/documents/Publications/Actes_de_congres/Floride_2006.pdf Read More