Mcdonald Essay

McDonald’s is comprised of more than 30,000 local restaurants and serves 52 million people in more than 100 countries each day[1]. The company is the largest food retailer in the world and is part of the American way of life. In order to remain competitive and an iconic American institution, McDonald’s has developed programs and strategies for motivating employees and teaching leadership. As a result, our group believes that McDonald’s presented an excellent opportunity to observe organizational behavior in action. In this observational study, we sought to discover what leadership techniques and group skills were actually practiced by McDonald’s employees. Our field study entailed visiting four different McDonald’s stores in the greater Rochester area during distinct shifts ranging from early morning to late night. During each visit, a group member made a purchase and sat at a table where one could observe the behavior of managers and employees and customer interactions, without interfering with normal operations. Due to the fact we were restricted to a small sample of McDonald’s restaurants, we could not capture the complete spirit of the corporation. However, we were able to relate our findings to leadership and organizational behavior theories and some of McDonald’s corporate values. Through a series of observations and corporate research we discovered that McDonald’s employees demonstrate quality leadership and that the organization as a whole puts significant effort into motivating and working for its employees. Corporate & Work Culture When analyzing an organization’s leadership and teamwork skills, it is useful to first analyze the organization’s work culture and how this culture is maintained. The work culture of McDonald’s seems highly dependent upon the particular line manager in charge at any given point in time. One would imagine that the manager would almost always use position power and would use a telling style of leadership since the typical employee is young or inexperienced. Indeed, some managers were observed as running the operations in a machine like manner, especially during peak business periods. However, in the majority of cases the managers were relatively relaxed and sometimes were indistinguishable from the other employees. One manager in particular used a selling approach, which indicates a higher readiness level of her team  (Daft, 2008, p. 73). She did not simply give orders, but accepted feedback and alternatives to her decisions. While it was obvious she was the manager, her team was obviously in the later stages of development and was comfortable outside of their predefined roles. ntroduction For our project we have decided to analyze McDonald’s. We propose to look at how McDonald’s has attempted to change their image through marketing strategies over the years. They have done this in a variety of ways, not just with their products. For example, they changed packaging on their products to become more environmentally safe. They have also created new menu items in the past 10 years in order to offer some â€Å"healthy† options to those watching their waistlines. This is an effort to appeal to customers who might have disregarded McDonald’s in the past because of traditional stereotypes. They have done this in a variety of ways using the four P’s and  are attempting to change  society’s perceptions. Many people today are unhappy with McDonald’s and their â€Å"unhealthy† food, and we were interested to see if the current marketing strategy that McDonald’s is using is creating a positive change for the company. History McDonald’s, now known world wide as one of the major powerhouse’s in the fast food industry, began in  San Bernardino  on May 15, 1940. It originated as a barbeque restaurant under the ownership of brothers  Dick and Mac McDonald, and soon evolved into a teen hangout generating 80% of its revenues from hamburgers alone. In 1948, McDonald’s switched gears and increasingly targeted the young family market, developing its operation concepts around speed, lower prices, and higher volume. They ran under the slogan of â€Å"speedy service systems,† selling their hamburgers with fries for an astonishing 25 cents. In 1954 Ray Kroc, a previous restaurant owner, saw potential for growth in the company and capitalized on it convincing the McDonald brothers to franchise the company with his financial support. In 1963 McDonald’s introduced Ronald, a fun loving clown, to promote their restaurant  as a family establishment,  and he became a huge success. In fact, Ronald is now an icon symbolizing the McDonald’s firm. As the restaurant continued on its upward spiral toward success, they decided to go public for the first time in 1965 offering one hundred shares of stock for $2,250 dollars. In today’s market, that is equivalent to 74,360 shares worth over $1. 8 million  (www. mcdonalds. com). In effort to give help to those who are in need, McDonald’s collaborated with the Philadelphia Eagles’ Fred Hill and created the Ronald McDonald House in 1974. At the house, families of critically ill children are given a home away from home while their kids are treated. Today,  McDonald’s is the leading foodservice retailer with more than 30,000 locations in over 119 countries, and  is  a symbol of American culture. Historical  Reputation McDonald’s was the first fast food restaurant on the scene. There have been many imitators over the years, but it has historically been number one. Since its first opening in 1940, the business has boomed into an international craze. Historically, McDonald’s has been viewed as the pinnacle and one of the defining features of the American lifestyle. Burger, fries, and a Coke were the traditional meal. Once it spread globally, it boomed into popularity because other countries wanted to be associated with the successful image of the â€Å"American dream†. It was not until recently, within the last 15 years, that people began to question the health and safety of the fast food industry, and have been focusing on McDonald’s because it is an easy target. When a company is that large, it is a natural target for  inner directed  consumers, and those who wish to upset the conformist lifestyle. Reputation Today Though all this talk about â€Å"poor health† and â€Å"risk† associated with McDonald’s seems bad for the business, we set out to see if it was really hindering their success today. McDonald’s is, after all, still the most prevalent and recognizable fast food establishments in the world. The health aspect  has actually spread out of the  United States  and become a global issue. According to All Headline News, McDonald’s saw a profit loss of 14 percent last quarter. It was the biggest loss the company has had since 2002. This may seem like an indication of their dropping popularity; however it was actually not related to their customers’ atisfaction (or lack thereof). According to the company, their loss reflected a large tax benefit it received over a year ago, and that sales have actually been going up over the last 35 months due to  a series of successful new products, extended hours, restaurant renovations and allowing customers to pay with credit and debit cards. As stated before,  McDonald’s is the worlds leading fast food restaurant and is globally recognized. With over tens of thousands of stores spread across 119 countries, McDonald’s serves an astounding  50 million  customers daily(www. mcdonalds. com). With such an extremely large consumer base, it is crucial  that they know and understand how their customers feel regarding the overall satisfaction of the McDonald’s experience. The type of experience McDonald’s offers to its loyal consumer is, on the majority, rated high in overall satisfaction. The  reasons McDonald’s consumers are loyal  to McDonald’s  and not to its competitors are many. First, McDonald’s has recognized the importance of diversity and its impact within company strategy. They have  done an excellent job in implementing a multidomestic strategy to ensure the loyalty of its customers and their changing wants and needs. This is shown through their diverse menu options around the globe. For example, McDonalds’ restaurants  inIndia  created a vegetarian sandwich in order to cater to  their  need of not eating beef. By increasing the number of segments they can market to, they are able to reach more people. This is only one example of many on how McDonald’s has met the needs of its customers. McDonald’s provides a positive and caring attitude towards the community of which it serves. McDonalds’vision states that â€Å"We are not a hamburger company serving people; we are a people company serving hamburgers†. With a vision so clearly committed to people, customers have responded  by continuing to keep McDonald’s  number one. Other aspects of the McDonald’s dining experience show why their customers continue to hold their reputationhigh. They use things like the dollar menu, playgrounds, endorsements, and charities all add to create the overall satisfying experience. These things overshadow the health risks that are a large issue in today’s American society. Through the information we have found, McDonald’s is still popular because it is about convenience and fast food. Until people are willing to wait longer to eat and pay more for healthier food, it will still be one of the leading chains. So,  does it seem  that they are repairing the damage done by the â€Å"health nuts†? On the contrary, they may have maintained their customer base through smart advertising and marketing but are still not popular with many people. They are such a large and conspicuous company that many people find it easy  to blame them for problems. Inside theUS, they are the target for various causes such as anti-globalization groups and environmentalists who believe their packaging is creating excess waste. It has also been accused of being heavy-handed in its retaliations to these protests, giving it a somewhat  bully image. Outside of the  US, McDonald’s is still widely pervasive in most countries, all of which have local owners. Yet, it finds itself a symbol of American domination of economic and natural resources. There are also many urban legends about its food and company, and it is a target for unusual lawsuits. Customer Base This is not to say that all people hate McDonald’s. Their website claims to serve over 50 million people per day. Who are McDonalds’ customers? Stereotypically they are overweight, lazy, and unhealthy people (men, women, and children). This could be adding to the social stigma surrounding McDonald’s and adding to their unhealthy image. One crucial group is what they call the â€Å"heavy hitters†. These are men 18 – 34 years old, who eat at the restaurant three to five times a week. These men actually only make up about 20 percent of the customer base, but account for nearly 70 percent of the visits to the chain  (Alexander, 2004)! However, McDonald’s decided to phase out the â€Å"Supersize Option† on its meals in 2004, which could be alienating this group. It is important to keep this group because they bring profits way up by increasing margins on sales. The change was implemented when McDonald’s began to focus more attention on attracting moms and health-conscious adults. Target Market Traditionally, and still today, McDonalds’  focus in advertising, marketing, and design has been children. This is obvious with their PlayPlace, Happy Meals, and character Ronald McDonald. They actually introduced Ronald as a way to draw families into the restaurant. In recent years, McDonald’s has also been increasing their marketing toward mothers. This makes sense because they have to also draw the moms into the restaurant, where the kids want to go. They are almost a  small addition to the child market. They use a variety of marketing strategies to attract children, moms, and families in general. Promotions and Current Marketing McDonald’s is actively working to change their image to a healthier one. Gone are the days where hamburgers are the key advertising attraction. People already know McDonald’s; in fact the golden arches are the single most recognized symbol around the world, even before the cross. They have completely saturated the market to the point where you can now even order a  Big Mac  while shopping at Wal-Mart. Their problem, however, is their battle with health critics and customers filing lawsuits about their unhealthy products. This negative publicity is shaping some stereotypes around the company which they want to change. As we know, perception is reality. The American public sees McDonald’s as a restaurant  that is as unhealthy. Americans don’t go to McDonald’s with visions of healthy food dancing in their heads. Some don’t even go to McDonald’s at all. So how does McDonald’s get them back? This is an immense project that may also never be a successful one. it’s what i eat and what i do†¦i’m lovin’ it The most recent way that McDonald’s has tried to create a healthy image is their new marketing campaign titled â€Å"it’s what i eat and what i do†¦i’m lovin’ it. †Ã‚  The campaign is meant to build upon their global marketing campaign, â€Å"i’m lovin’ it,† which was launched in September 2003. It is designed to â€Å"tie all our balanced, active lifestyles messages together,† said McDonald’s CEO Jim Skinner (Press Release, 3/08/05). The theme highlights the â€Å"important interplay between eating right and staying active. †   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Throughout all of the press releases and media material that we found on McDonald’s corporate website there was one common phrase: â€Å"balanced, active lifestyles. †Ã‚   It is their new platform and it consists of three pillar ideas: increasing menu choice, promoting physical activity, and providing more accessible information. In the next few paragraphs we will illustrate just exactly what McDonald’s is doing in their marketing campaign to address these three pillars. The most recent example of the first pillar,  increasing menu choice, is the introduction of the new Asian Chicken Salad. McDonald’s is both expanding their menu and increasing the availability of â€Å"healthy† foods. Advertisements for this new salad are everywhere. Signage is present outside the restaurants,  on street banners, and even  on the windows and near the registers. One food bag also featured the new Asian Chicken Salad as part of a GoActive! Happy Meal. We even saw a couple different versions of advertisements on  television  for this salad as well as an ad in â€Å"InStyle† magazine. It  is their newest healthy item. Other recent menu additions were also â€Å"healthier† choices such as Premium Chicken sandwiches and other premium salads. The second pillar of this campaign,  promoting physical activity, is also evident on bags, cups and signage in each store. The bags that hold food orders no longer have hamburger ads on the outside. They  now feature images of people leading â€Å"balanced, active† lives. On one bag, a woman is doing yoga with a caption saying â€Å"being good to myself has never been easier†¦i’m lovin’ it.    This lady is sending a message that she  thinks it is easy to maintain her healthy lifestyle by eating at McDonald’s. Physical activity is also promoted through the introduction of four different 15 minute workout DVDs that you can get when you buy the GoActive! Happy Meal that includes a salad and a Dasani bottled water. During the Winter Olympics in  Torino, many Olympic athletes were also featured on McDonald’s bags with motivational messages about their active lives. McDonald’s is doing everything they can to broadcast images of healthy active people and associating them with McDonald’s. The third and final pillar,  more accessible information, is evident in McDonald’s new packaging concept that will provide nutritional information on individual food boxes. McDonald’s has a â€Å"30 year history of providing nutrition information to customers,† but as recent lawsuits against McDonald’s and scenes from the movie â€Å"Super Size Me† suggest, they have room for improvement (Press Release, 2/0706). The lawsuits against McDonald’s claimed that the plaintiffs were obese because they were unaware of the nutritional content of the McDonald’s food that they were eating. Whether that is believable or not, McDonald’s was forced to make a move. They were lucky that these lawsuits were thrown out due to the fact that the plaintiffs could not prove that McDonald’s was at fault, but what if the next plaintiff had a better case? McDonald’s has to be on the defensive. Therefore, McDonald’s is moving nutrition facts straight to the box. Not only does each box  have the nutrition facts table,  but McDonald’s also chose to highlight the five most relevant indicators that customers can understand: calories, protein, fat, carbohydrates, and salt. These five indicators are presented in a different color, while the nutrition table is presented in plain text. The only packages that will not feature nutritional information will be those used in short-term promotions and wrappers and containers that are used for multiple products. In those cases, customers will be referred to McDonald’s websites and in-restaurant brochures. Marketing for Children Another part of McDonald’s push toward â€Å"balanced, active lifestyles† also includes their interaction with children. Kids are a huge market that McDonald’s caters to and has done so for many years. Parents often take their kids to McDonald’s because it is often the only indoor play area around, and also provides a quick, convenient, and fairly cheap meal. In a country where everyone is busy with work and shuttling kids back and forth to soccer practice, a quick meal is invaluable. The kids are fed and are able to run around and play at the same time. McDonald’s is finally aware of their hold on kids and how this hold is affecting the health of American kids. Because of this, McDonald’s is now using Ronald McDonald as an advocate for balanced, active lifestyles. The goal is to have him inform both kids and families around the world about the importance of eating healthy and staying active. In the fall McDonald’s plans to release the first two in a series of DVDs featuring Ronald McDonald, these DVDs are meant to show kids â€Å"how much fun they can have when they activate their bodies, their minds, and their imaginations†(Press Release, 2/07/06). New â€Å"Healthy† Products Over the years, McDonald’s has also introduced a variety of new products to combat the image of unhealthiness. These have worked to diversify their menu, but have not made much of a difference in the perception of the restaurant. Some of the new items include the Premium Salads, Premium Chicken Selects and Chicken Sandwiches, bottled water as a substitute for soda, Low-Carb options for normal menu items, the Apple Dippers and fruit bags, and the Fruit and Yogurt Parfait. Beside  reminder ads,  McDonald’s is currently spending the majority of its advertising budget on these new products, and still sell more double cheeseburgers than all of them combined  (Warner, 2006)! In fact, though they are marketed as healthy but a Chicken Caesar Salad with dressing at McDonald’s actually has more calories from fat (270) and percentage of daily sodium (64%) than a  Big Mac (270 calories from fat, 42% daily sodium) (Nutrition, 2006). The Olympics Partnership The Olympics have a long lasting reputation for their presence and involvement with sports and collaborations with corporations for sponsorship and advertising opportunities. Because the Olympics have such a profound impact worldwide on individuals, it is not surprising that the marketing element in the Olympic  Games  is so prevalent. With the Olympics being a globally viewed event (over 2 billion) in over 200 countries, marketing throughout the duration of the games can generate mass publicity leading to greater profits  for the sponsors. Sports  also  play a role in millions ofpeople’s  lives around the world. It is one arena of life that the mass media also finds  significant;  implicating the obvious reason that marketing through the Olympics is a golden opportunity. Other than being a company who markets their product via commercial or some other media outlet, sponsors of the official Olympic  Games  contribute a great deal in understanding the entirety of how corporations are involved with the Olympics. Sponsors show their support to the Olympic  Games  by providing financial and other resources to give their image a positive boost. McDonald’s has latched onto this sponsorship idea, and began sponsoring the Olympics in 1976. It is important to understand how the Olympics affect their sponsors and vise versa, which explains the in depth explanation of the Olympics. McDonald’s was in  its  rapid growth stage  as  America  was embracing the experience that McDonalds offered; inexpensive food and quick, friendly service. As McDonald’s was becoming a familiar household name throughout the country, so were  the Olympics. When  they became an official sponsor, it was most definitely the merging of two huge forces, and became a long lasting relationship. McDonald’s today continues to show the Olympic  Gamestheir committed support, and uses their relationship to promote its new â€Å"healthy† image. McDonald’s  CEO  had this thought on their involvement with the Olympics, â€Å"Our McDonald’s restaurant teams have always shared many of the same ideals as the Olympic team. They include excellence, teamwork, and being your best. For more than 30 years, we have been a proud sponsor of the Olympic movement, a partnership that directly aligns with our ongoing commitment to help people live more balanced, active lives†. Not only is McDonald’s a devoted and veteran sponsor, they hold the position of being the top sponsor of the entire â€Å"Olympic movement†. Although McDonald’s has had a long run as being the top sponsor to the games, it will come to an end when the 2012 London games take place, for  their sponsorship will cease. We haven’t found the reason behind the decision which is surprising because it is a significant one. McDonalds’sponsorship with the Olympics has provided many positive outcomes for both parties. Having a close affiliation with the Olympics altered the way that the public perceives McDonald’s, which was what they were  hoping for, especially in the last decade. The question is, has their sponsorship changed the company or how the public perceives it? The essence of the Olympics is about fitness and bringing together the best of the best, two very important values. As McDonald’s became more and more aware of their customers increasing interests in a more healthy diet, they began to change their strategy fast. McDonald’s also realized that the affiliation with the Olympics alone could help make their transition to a more health conscious restaurant more visible. So,  McDonald’s began promoting the sponsorship by adding it to their packaging, voicing it in their commercials, and  in  other media outlets. By doing so, people started to view McDonald’s in a healthier way, through a small  halo effect. The affiliation between the two also intertwined the  values  of health  between both the Olympics and McDonald’s. In other words, some people started to think of McDonald’s as being the best in the fast food industry,  and also purchasing the â€Å"healthy† items. Although this was only the first step McDonald’s took toward changing their image, it was one that had a lasting impact. Recently, McDonald’s has become aware of the increasing health conscious public and has tried to adapt accordingly. They have incorporated many different campaigns to capture and promote the essence of healthy living. As stated before, among these include the sponsorship with the Olympics, offering a line of products which are marketed to the health conscious customers, endorsements with super-fit celebrities,  collaboration  with other health-oriented products such as bottled  water, and also the introduction and promotion of the GoActive! Campaign. This campaign is headed by a famous celebrity fitness trainer, Bob Greene, and has been named â€Å"The GoActive! American Challenge†. GoActive! Campaign The GoActive! Campaign  is McDonalds’ most recent attempt  to diversify their options on the menu, and convince its customers to become more active. This is aimed more toward  the adult  rather than the child market, which is a turn from traditional marketing strategies. McDonald’s wants parents to be able to order healthful food while still giving the kids what they really want: The Happy Meal. This change is successful because the options are given to customers, rather than automatically getting fries and a soda with the meal. Instead, customers are given the option of things like fruit salad, apple slices with caramel sauce, cut veggies, juice, and bottled water. By doing this, McDonald’s is taking a proactive,  hands-on approach which shows customers they care  about  and realize  the  significance of a healthy lifestyle. To promote this program, McDonald’s and celebrity fitness trainer Bob Greene decided to challengeAmerica. Their challenge was called â€Å"McDonald’s GoActive! American Challenge† and it encouraged others to live a more balanced life by taking steps to reach a goal. To promote the new campaign,  Bob Greene walked and biked across  America  for a total of 36 days. To include people in this journey, McDonald’s distributed 10,000  to 15,000step-o-meters along with brochures containing information about fitness and ways to start living a more active life. It is McDonalds’ hope that customers will see, from this challenge, that McDonald’s is a place where they have a choice to consume either healthy or unhealthy food. Also, the presence of Bob Greene adds advantage to McDonald’s marketing techniques because of his status in the fitness world. If he is associated with the company, then it must not be that unhealthy. It is critical to analyze what perception is and how it plays a part in McDonald’s and their marketing strategy. Interview with Bob Comisky We also wanted to get the  opinion  and viewpoint of a person inside the McDonald’s Corporation on this topic of healthy marketing. We talked to a franchise owner, Bob Comisky, to see whether or not he thought the current actions and advertisements were really working. According to Bob, customers are not coming to McDonald’s to eat healthy. He said, â€Å"Overall we have increased a little in healthy product sales but we have found that although there is a health craze right now people come to McDonald’s for the burgers, not to eat healthy. †Ã‚   This mimics our research, finding that the dollar menu sells much more than the healthy items. The marketing has had little effect on the buying patterns on the restaurant patrons. He also said that McDonald’s is hoping to increase their market share globally:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  McDonald’s as a company has vision to dominate the world-wide foodservice  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  industry. In order to do this they will set the performance standard high for customer  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  satisfaction in addition to increasing the market share and profitability by fulfilling  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  McDonald’s  mission of value execution strategies and convenience. What is the Point? The basic issue  for McDonald’s regarding perception is that the entire establishment is based upon how they are perceived by the public. Are they perceived as a family restaurant by families? If so, the family segment will more likely visit the restaurant for family dinners. Is McDonald’s perceived as a fun, inexpensive place for the high school and college segments to eat at? If so, they are also more likely to eat there. Therefore, the perception that consumers have about McDonald’s is the basis of their decision to eat at the restaurant. Now that McDonald’s has tried to saturate the market with the healthy, balanced lifestyles campaigns, they are trying to change the  public’s  perception of them in terms of the health factor. While McDonald’s is trying so hard to be the new and improved healthy dining experience, the perception of McDonalds in many  people’s  minds is already set in stone. Trying to change this will cost huge  amounts of money and there is not any guarantee that McDonald’s will achieve their goal. Overall, we believe that McDonald’s is using these â€Å"healthy† products and active lifestyle campaigns as a defense mechanism. They are trying to dispel the image they have right now, and also prevent future lawsuits. All the lawsuits that have been brought against them in regards to obesity have been thrown out, but it is still negative publicity. The company had to do some major damage control after movies like  Super Size  Me! and other negative movements. They are less concerned with changing people’s perceptions of the chain, and more with the fact they need to be seen astrying  to help the situation. They have already saturated the market in the  United States, and want to stay at the topand expand globally. It is not so much about initially changing the company’s image, though over time it may change in response to this extensive marketing strategy. Though it may not change their image, we also think that this is a good direction for McDonald’s to focus toward. They are a mature company, and the only way to bend the arrow backward on their product life cycle is to innovate and create new products. This is their attempt to return to the rapid growth stage. As stated before, McDonald’s  is widely known for its hamburgers and fries, but it has potential to grow into a new market with healthy options. It also has enough money to fund this type of project, and there is no reason they should not continue on this road. The worst that could happen is that they revert back to the same market and style they have always had, but thepositive  side could be expansion into an entirely new market and much more revenue for the company. In general, the managers did not try to put any strong vertical barriers between themselves and their employees. Managers usually seemed to display real concern and interest in the emotions and well being of their employees, which was not expected in this environment. For example, one manager was observed asking an employee cleaning the floors about her weekend and her kids. There seems to be legitimate efforts in order to motivate employees even at the line worker level. Herzberg’s two-factor theory explains that good working conditions only go so far, and that employees require higher level fulfillment such as motivation and recognition in order to be satisfied with their position  (Daft, 2008, p. 231). Even in a low- skill position, low turnover is desired. In addition, happy employees lead to happy customers. McDonald’s corporate management believes in training and leadership at all levels through Hamburger University. On Hamburger University’s website[2], they quote McDonald’s founder Ray Kroc’s training focused ideology: â€Å"If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent†. This ideology demonstrates that McDonald’s does not believe its restaurants’ crew members are just gears in a machine that can be easily replaced. Because training is not just offered to executives or managers, McDonald’s is able to spread and reinforce its culture and values in all directions, not just downward. McDonald’s corporate values also have â€Å"people† as one of its pillars  (McDonald’s Corporation, 2008). Corporate policy says that employees should be paid at or above the local market rate, and should also value both their pay and their benefits. By addressing employees higher needs by providing training they make employees feel important and valuable. Training also serves to reinforce the culture at all levels through education and fostering a positive image of the employees’ importance to the company. McDonald’s Motivating Factors Of the McDonald’s restaurants we observed, the culture was generally inviting for new employees. In addition, other factors make McDonald’s an ideal employer for many individuals. A primary motivation for working in a McDonald’s restaurant is that it presents a laid back environment and the job itself is not very stressful. Even during the observed lunch and dinner rushes, the employees never appeared particularly stressed or anxious. When there was a lull in the restaurant the employees would clean their stations, chat with other employees, or get a drink from the soda fountain. They were very relaxed and for the most part did not seem to fear their managers or other bosses. As Daft explains, fear can weaken trust and communication, and is usually impedes employees rather than motivates them  (Daft, 2008, p. 52). For a high school student who is busy with school work and other extra-curricular activities, it may be ideal to work in a laid back environment like McDonald’s. A student’s life may be highly stressful, and a low-skill, low-stress job offered by McDonald’s may provide a break from an otherwise stressful life. Also, for the elderly employees, the low stress environment may also be desirable because they would not be overwhelmed with responsibilities that might be new to them. Another possible motivator is the social opportunity presented by such a job. As noted above, employees tended to have a very casual environment where they could talk and socialize while they worked. For example, many of the employees who work during the evening shifts are high school students. These employees are often the same age and often share common cultural interests. They are also presented with the opportunity to meet new people and develop friendships that can continue to develop outside of work. They will also have a bond with these employees because they share a common experience, and are likely from a similar background. Employment at McDonald’s also offers social opportunities for those employees who are young but do not attend college and for the elderly. Many of these employees do not have the opportunity to participate in clubs or other organizations, and interact with people of their own age or anyone in general. It may even be possible to develop a romantic relationship with another employee, as McDonald’s is not a work environment where this could be seen as a problem by management. A third reason for working at McDonald’s is the flexible schedule. McDonald’s offers many different shift schedules so they accommodate everyone. This can help employees find a healthy work-life balance. Some individuals require fulltime work, which is available through the standard day shift, while part time workers can pick up their hours after school ends, on weekends or around other social obligations. Since the company requires in some levels a low skill job, another employee can easily take one’s shift over, allowing the later to take on other obligations and not be completely tied to the workplace. Part time employees can rotate their hours according to who has requested to have a certain day off. This gives employees a sense of empowerment because they have same say in their schedule and are less likely to call in sick to avoid work, which would lower team morale and the respect between the managers and the employee  (Daft, 2008, p. 242). Even though the average employee is unskilled or does not require skills, empowering an employee helps him feel important and makes him feel better about his job. In addition to the flexibility offered by a position at McDonald’s, the convenient location might serve as another motivator. There is a McDonald’s store in most every town, and it may be relatively close to an employee and the only available job which does not require a skill or advanced training. As a result, employees who do not have cars can walk to work or take public transportation. In light of the recent economic downturn and the high price of gas, having a job in your own neighborhood is a huge benefit, especially for a young person or a person trying to earn their first paycheck. Finally, an additional motivator is the numerous growth opportunities available. McDonald’s offers training to employees at various levels. In addition, if any employee stays at McDonald’s for a long period he could advance into an assistant manager or manager position. While typically a McDonald’s job is seen as temporary for young people, it may be the only job available for an impoverished person, recent immigrant, or someone with no learned skill. Since there is a high rate of turnover, employees have the chance to advance within a few years of working at a restaurant. This opportunity could be very appealing for those who cannot attend college for some reason. If during his high school years an employee was a hard worker, he or she could easily move into a manager position and continue his career with the company or gain experience to move into another job without a formal education. Through our observations we were unable to determine the exact theories of motivation mangers used, but it was clear that the theories were of a needs-based nature. In general, the average employee does not commit to McDonald’s for a long term, and high turnover is expected. Thus, for the majority of the employees the goal is to satisfy their lower needs. Using Maslow’s hierarchy, the main goal is to provide the basic needs such as a safe environment where they can earn the money they needed to provide for their physiological needs  (Daft, 2008, p. 228). However, there are typically no real fringe benefits (besides free food) associated with the job, and there is no contract or other guarantee of continued employment. In some cases though, there was observed belongingness through friendships and team unity. In addition, the two-factor theory of motivation seems to be employed  (Daft, 2008, p. 231). McDonald’s seeks to reduce dissatisfaction by having good hygiene factors – adequate pay and organizational policies. In many cases, there does not appear to be a high focus on implementing motivators; employees did not seem unhappy, but there seem to be very few opportunities for recognition and growth except for those who plan to be long term employees. The Best Employee In continuation to what was observed in the visited McDonald’s stores, one cannot neglect to address the leadership style displayed by the line managers in these restaurants. Conforming to the informal and relaxed atmosphere emphasized by the manager’s calm attitude and the McDonald’s â€Å"100% customer satisfaction† goal; one could expect a â€Å"middle-of-the-road† type of management in which the leaders behave as compromisers  (Northouse, 2007, p. 75), exhibiting both people and task oriented behavior. Indeed, during this field study the line managers seemed to be very expedient, approaching a station whenever there was a problem and giving directions to the subordinates. The managers appeared to be moderately concerned with the people who did the tasks, yet they were focused on production and ultimately product quality. There were no noticeable conflicts between leaders and followers and an equilibrium state was achieved between them. The line managers’ leadership behavior reflects a task-oriented style for the crew members. The commitment and positive attitude towards a given task are derived from the employees’ motivations and leader behavior. According to the Path-Goal Theory, for tasks which are characterized as repetitive, unchallenging, mundane and mechanical, the group members tend to be unsatisfied and in need of affiliation and human touch  (Northouse, 2007, p. 34). Therefore, the most suitable leader behavior for this type of environment is the supportive leadership that provides nurturance and makes the work pleasant for subordinates. McDonald’s Corporate believes its success is attributed in part to the talented restaurant crew. Also, Corporate claims to be engaged in talent management: attracting, developing and retaining talented people from all levels[3]. The le ader behavior observed in the McDonald’s stores corresponds to the employment experience values promoted on their website. From the field study experience, one can surmise the McDonald’s leader-follower relationship as the following:†The task is simple. We provide all necessary tools for you to accomplish your job. Show commitment and perform your duties properly. I am here to help if necessary. I will not trouble you†. For the McDonald’s case, a comfortable and friendly environment reinforced by the line manager is paramount for the employee’s satisfaction. Good customer service is one the most important aspects in the fast food industry. It is crucial for the employees in this sector to display courtesy, genuine concern and diligent service towards the clients. Unsurprisingly, this trend was commonly found in the visited McDonald’s stores. Most of the cashiers there would greet the customer with a smile and a â€Å"how are you today, sir†, followed by a â€Å"thank you† once the transaction was done. Behind the scenes, the workers cooking fries and flipping burgers made sure their products were been delivered in a steady pace and in accordance to the company’s quality standards. Finally, the line manager’s role was to make sure things were running smoothly, fill gaps whenever necessary, assist crew members and perform other managerial duties such as inventory control, managing budget and human resources. As in any assembly line, the employee’s performance is heavily measured by his or her efficiency level. It amounts to how many items the worker delivered in a given period, following a certain quality standard. Of course, there are others important points to be considered in order to determine who the best employees are. Initiative could be a means of distinguishing the workers in this sort of environment. This could be exhibited by a cashier who cleans the counter if idle, a cook who starts cleaning the kitchen earlier, or even a manager who presents to the company a new product or service concept. Also, cooperation plays a big role, because McDonald’s relies on groups and teams. Each employee relies on another line worker in the assembling process. In the end, any worker who demonstrates these qualities could have his/her picture hung on the wall as the â€Å"employee of the month† – this is a classic example of how McDonald’s stores motivate and reward their employees. The best McDonald’s manager/leader is the one that promotes a pleasant atmosphere for his/her subordinates to counter the limited job’s motivating factors. However, the manager should also focus on maximizing production and delivering a good service to the customers. The ideal McDonald’s leader must apply a coaching leadership style, showing both high directive and supportive behaviors. From what was observed in some stores, the managers of the restaurants seemed to be in control of every aspect of the entire food service process. At some instances when things went completely out of control; the same managers exhibited a coaching style of leadership, directing the subordinate on how to achieve a specific goal. Whenever they overheard or saw someone  doing something wrong or partially correct, they would step in  giving directions to their subordinates and would never disrespect them. Team Work at McDonald’s While not all employees can be superstars, McDonald’s owes is success to its team functionality rather than the efforts of one individual. McDonald’s does not have very highly integrated teamwork, but they would be unable to deliver their products and service without sufficient team unity and cooperation. The team on the floor of a McDonald’s restaurant is best described as a functional team(Daft, 2008, p. 297). Team members have one area that they focus on during their shift. If they leave their post or are not productive, other line members will not be able to accomplish their jobs and the production line will suffer. For example, when a customer enters the restaurant places an order with the cashier, the later inputs the order into the computer and the information is displayed in the kitchen at the sandwich and grill stations. The grill worker prepares the meat and then places the burger on a bun. The sandwich maker then assembles the sandwich according to the type of sandwich and any additional requests the customer has. If the sandwich maker leaves his post, another worker has to cover for him or the entire product delivery process shuts down. As a result, a McDonald’s restaurant team is sequentially interdependent  (Daft, 2008, p. 301). Without everyone working together and having sufficient motivation to provide good and quick quality service, all members of the team fail. As a result of one person losing motivation or failing to adequately perform his duties, customers may complain and business can be lost. Even though most employees are trained to perform multiple tasks at various stations, they are not usually able to perform all of these tasks simultaneously. The typical team was not self-reliant and required constant, direct input from the manager. We observed that often times when morale began to wane, the manager was able to reinvigorate the team and increase efficiency. However, we also noticed that if the manager grew tired and lost motivation the rest of the team quickly followed suit. Managers were also instrumental in helping out struggling team members by motivating them. This attitude kept the production line moving adequately. The team effectiveness is directly related to the manager’s leadership efforts  (Daft, 2008, p. 303). In order to ensure both efficiency and quality in the team’s work, the managers had to make some efforts to satisfying employees’ needs. This manifested as direct help, words of encouragement, not punishing undesired behavior every time, or awarding a break and taking over a worker’s responsibilities temporarily. Nevertheless, employee seemed well trained and autonomous as long as morale was at a sufficient level. The team operated mostly without speaking. Sometimes team members would yell an order to another member, but generally everyone knew what they had to do without much discussion. Because the team did not need constant retraining or correction, it is a sign that the employees are well trained and have been iven the tools to adequately perform their roles. The Overall Leader ; Corporate Values Reflected While McDonald’s is a large multinational organization, the CEO is often seen as a leader and symbolic driver of the corporate initiatives and ideals. McDonald’s current Chief Executive Office is Jim Skinner. Mr. Skinner has been with McDonald’s for over thirty-five years, and has hel d many positions from â€Å"restaurant manager trainee† to many corporate positions throughout his tenure, before being elected as CEO  (McDonald’s Corporation, 2008). Truly a charismatic and transformational leader, many attribute McDonald’s turn-around in the past few years to the efforts of Skinner; not only did he revitalize the organization, but he â€Å"reinvented the fast food business† with a new vision and direction(Hume, 2007). Early in the turn-around, he was one of the architects of the â€Å"Plan to Win† initiative which renewed McDonald’s core focus of store operations. His election to the CEO post provided some stability and faith for the organization. Hume notes that one of the key elements to his success was his vast experience with overseas markets that gave him great diversity exposure which was crucial for the global corporation. This diversity has definitely helped giving McDonald’s a competitive advantage, and was paramount in the global communication between employees and customers  (Daft, 2008, p. 334). One of his noted achievements during his tenure in regards to leadership was fighting the â€Å"McJob† stigma; he made employees feel important and began to promote the various positions in a brighter light through advertising campaigns  (Hume, 2007). In terms of Mr. Skinner’s philosophy, he is primarily focused on customer satisfaction. He believes that is necessary to first meet customer expectations and then focus on the restaurants themselves. The philosophy also includes keeping things simple and manageable for each store while making sure that â€Å"everyone is aligned around that one idea†. The idea is directed towards making a good appearance, caring about how the restaurant looks and how you present yourself. Another important aspect of his philosophy is the fear of complacency. Therefore, he encourages creativity, but also wants to make sure that people do not lose track of the chain’s primary objectives  (Hume, 2007). Thus, there is a strong focus on coming up with good, creative strategies, and then putting the full effort into successful execution. For Mr. Skinner, a companywide initiative is always a must, and never a maybe. Skinner is also a man of values and ethics: When McDonald’s was blamed for the obesity problem, he helped direct the company to take responsibility and help create a solution rather than pass the blame. Thus, Skinner can be seen as a moral leader and symbol of doing the right thing for McDonald’s  (Daft, 2008, p. 169). Finally, one of Skinner’s continuing main goals is â€Å"talent management and leadership development†Ã‚  (Hume, 2007). This involves critical tasks such as reorganizing individuals into different roles and identifying potential leaders to be awarded additional responsibility. While many of the Mr. Skinners values are not easily discernable on surface, his leadership was seen at the restaurants observed. The care regarding customer satisfaction was most obvious, employees were always polite and the restaurant was very clean. During some observations, employees were seen talking with regular customers beyond the normal service interactions, demonstrating some level of intimacy between them. In addition, almost all employees seemed well mannered and presented themselves well. There seemed to be a high level of morale, even with the more menial and custodial positions, which was unexpected in a fast food restaurant. In many of the locations visited, there were employee recruitment signs on the door that listed benefits; however, the application process was online. While more efficient, perhaps a stronger focus on in-person recruitment would help improving morale and result in more applications. Improving Employee Effectiveness One may initially believe that there is not really much that can or even needs to be done in order to improve efficiency in McDonald’s restaurants; however, good leadership involves constantly reinforcing a brighter vision of the future and increasing value for both customers and employees. An employee should not think that just because they cook fries or flip burgers, that they cannot make a difference. Rather, by encouraging creativity and eadership even at this lowest level, the next great executive may emerge. It is important to turn each restaurant’s employee into a productive team member. In order to increase productivity and employee commitment, we propose several measures. The first measure would be to create a program to encourage creativity among restaurant managers, owners, and operators. In fact , the iconic Ronald McDonald was not developed by Ray Kroc or anyone at corporate, but by the owner of a local franchise  (Walker & Scott). Rewards should be available for coming up with new ideas at the restaurant level. As owners and managers are the ones who are actively involved with the day-to-day operations, they have a greater vantage point for implementing successful changes. In order for such a program to be successful, there must first be some educational programs like workshops. At the regional level, managers and owners can be brought together and taught about creative ideas. This will encourage thinking â€Å"outside of the box†, and furthermore can introduce individuals to the practice of â€Å"creative swiping†, which is a process of copying the best ideas whether they be from within your industry or from completely unrelated fields  (Peters, 1987). After properly motivating the owners and managers, there should be a trickledown effect to the restaurant’s employees. In addition to the trickledown effect of targeting the managers, we would take steps to directly motivate individual employees as well. On this front, one of the first steps is to truly understand each and every employee. Some employees may only be working at McDonald’s temporarily, but for others this may be the only available job opportunity. For such individuals, they want to maximize their job satisfaction. We would implement a program similar to those in large corporations where employees are able to set specific goals and explain their rationale for working at McDonald’s and what they expect from their employment. This process would show employees that they can do more than flip burgers, for example develop leadership and management skills which can be invaluable regardless of future career plans. Managers and/or owners would apply Vroom’s Expectancy Theory in this case; the attention and treatment of each employee should be personalized  (Daft, 2008, p. 35). Managers would therefore develop a plan with each employee to increase his intrinsic satisfaction, while at the same time increasing that employee’s productivity. Building on our focus on individuals, we would also implement a scholarship and education program. We want our employees to represent us well within our restaurants and throughout the world. We would offer high school and college aged employees a greater number of college scholarship opportunities in return for quality work and demonstration of leadership potential. Younger workers are often harder to motivate directly, but the opportunity to have someone else paying for your education is always a great motivator. The program would reward quality work such as customer service and punctuality, as well as creativity and the ability to dream like a leader. Employees must be sponsored by a manager or owner and would have to write an essay answering a question that instigates them to think creatively about how we as a corporation could improve. This would motivate even the youngest and most inexperienced ones. In fact, this could create an upstream effect on the whole restaurant or corporation, increase team cohesiveness and help encouraging those who are older or in higher positions to also think about making the entire organization better  (Daft, 2008, p. 239). The winners would make a positive impact on the organization and earn the extrinsic reward of a scholarship. In subsequent years, this would encourage other young employees to also pursue this opportunity, be a first-class worker and think creatively about the organization. Conclusion McDonald’s is a multinational corporation, which is perceived as many different things to different people. Some people see McDonald’s as a decent, fast and inexpensive meal. Others may view the company chain as a low quality restaurant that employs uneducated and unskilled people. Nevertheless, McDonald’s has a cheery corporate image that prides itself on quality and cleanliness, as well as good food and good service. The company employs state-of-art technology to help its workers in their tasks and makes the production process faster, attending to the customers in a prompt manner. In terms of leadership, McDonald’s makes a strong corporate effort to develop leaders. There are growth opportunities within the corporation or those who are willing to work hard and develop their leadership skills.