LOOKING AT MCDONALDS FROM THE PERSPECTIVES

OF ORGANIZATIONAL THEORIES

McDonalds is one of the biggest multinational companies in the food sector and also
the biggest hamburger fast food restaurants chain in the world. It operates in 120 countries
and it almost serves 70 million customers every day across the world.
McDonalds was mainly marketing on different kinds of burgers,
breakfast menu, fries, drinks, and dessert kinds and it has also added
new tastes like fish, salad, et cetera in response to different customer
tastes and different country demands. In this article, I will try to
analyze McDonalds company objectively from the different perspectives of organizational
theories and I hope it will be useful to understand what are its goals, values, and objectives,
how it is structured and organized, what constitutes its environment, and how it can increase
its chances of survival in the future.
Mission statement of McDonalds gives us some information about its goals and
objectives: McDonald's brand mission is to be our customers' favorite place and the way to
eat and drink. Our worldwide operations are aligned around a global strategy called the Plan
to Win, which center on an exceptional customer experience People, Products, Place, Price,
and Promotion. We are committed to continuously improving our operations and enhancing
our customers' experience. (McDonalds 2014). There are also goals and objectives to follow,
so the first goal is to place the customer experience at the center of operation and strategic
objective to achieve this goal is to serve customers with high-quality services and food in a
pleasant environment. For instance, McDonalds Turkey buys its products from well-known,
quality suppliers like Danone, Banvit, Pnar, Tat, Aromsa, etc. and other McDonalds in

different countries use high-quality brands and demand standardized raw materials from other
well-known suppliers.
They also have local supplies and 98% of their supply is provided within the operated
county so that their resource dependency is reduced. If we look at through the perspective of
resource dependency theory, we can say that McDonalds case fit their argument. There is a
dependency for sustaining the resources like food, labor, capital, local knowledge and the
organization becomes vulnerable to its environment in some ways. Therefore, McDonalds
has multiple sources of supply, it contracts out some of its services, and it successfully
develops strong relationships with other organizations to which it is dependent as well as
changing its environment through diversifying its products and services as the resource
dependency theory suggests.
Secondly, they target to be committed to their people, so their objective is to provide
opportunities and lifelong skills, reward achievements, develop leaders and create a healthy
environment with different backgrounds and experiences in the workplace. Additionally,
McDonalds has the strategy to reward the extra effort of employees with extra benefits and
incentives. There are cash based and non-cash based incentives. They are given allowances
for attendance, medical, annual attendance and leave fair assistance as cash incentives. There
is rewards based on the performance, crew of the month or the year selections, the branch of
the year titles, free food, and access to gift certificates as non-cash based incentives. This is
actually an indication of classical theory understanding. Classical theories argue that external
incentives and motivations are keys to increasing efficiency and effectiveness of the
organizations. Also, employees and managers of the company are given different training to
function more productively so as to achieve the goals of the company. This effort is named as
the cooperation by neo-classical theorist Bernard. For him, managers should motivate the
employees in a way that employee interests become attached to organizational objectives. In

addition, from the perspective of Human Resources Theories, there is also hierarch of needs
related to human motivation. Working in McDonalds also fulfills the social needs of
employees such as the need to get together, interact, socialize, and meet new people. Also,
empowering a person with a job even though average worker is unskilled make them feel
good about themselves and satisfy their ego needs with different ways like employee of the
month, certificates from the Hamburger University and so on.

Thirdly, it aims to create belief in the McDonalds system. Its business model is based
on a three-legged stool of owners/operators, suppliers, and company employees. In its model,
there is a high degree of hierarchy and employees are expected to keep up with the decisions
of their managers. They are not given the opportunity to participate in the decision-making
process, which is a typical indication of classical organizations. On the other hand, there
would be more participatory decision-making process in the workplace and more flexible
tasks instead of same, boring, repetitive tasks. Therefore, some studies on the employee
motivation of McDonalds found out that there was lack of input motivation due to minimum
wages, lack of motivation, deficient quality of job tasks, high expectations of the managers
related to their performances. Therefore, many employees stated that they did not see their
future career at working McDonalds (Strawory, 2014). Also, Maslows theory of hierarch of
needs would suggest that the needs should be satisfies according to its hierarchy starting from
physiological needs, security needs, social needs, ego needs, and self-actualization needs. It is
not important to have the employee of the month selections if the salary is an important issue
for an employee from this viewpoint.
Fourthly, it takes it as a duty to give back to their community as the community gives
them so much. Therefore, the company and its franchises support charities, community

activities in their areas. They want to be known as a socially responsible company. This view
can actually be interpreted by the environmental theories. As the environment pushed
multinational companies to be more socially responsible about their community, animals,
children, environmental issues and so on, McDonalds also had to adjust such changes in
order to survive and preserve its legitimacy in its environment according to institutional
theory. Also, this development can be interpreted as the result of feedback coming from the
company environment as the systems theory suggests.
Fifthly and most importantly, the company aims to grow its business profitably and to
improve continuously through constant innovation and evolution. Their objective for such
goal to achieve is to sense and respond to altering customer profile, employees, its
shareholders, and its environment. To aim growing profit is actually the main motivation
behind all classical and neo-classical theories, but such theories do not take into account the
need for innovation or evolution. McDonalds is aiming innovation meaning that it takes its
environment into account for its future plans and goals.
As for the structure of the company, McDonalds is an international company, so it is
firstly divided into geographical regions under the presidency of the company and regions are
divided into countries. Then, regional operations are divided into four main departments:
accounting, marketing, operations, and human resources. There are also many sub-divisions
of these departments in each country. In terms of organizational structure, there is a tight
control of the firm. For instance, if we analyze the career steps to becoming only a restaurant
manager in McDonalds there are quite many steps to follow. The person firstly participates
into trainee crew and become a crew member. Next steps are training squad, trainee floor
management, floor manager, shift running floor manager, trainee manager, second assistant
manager, first assistant manager, then becoming restaurant manager at last. So, as the

organizational chart shows us, there is a steep type of configuration in the workplace as the
classical organizational theories suggest.
Classical organizational theories suggest that there should be a high degree of
specialization, standardization, formalization, centralization, and steep type of configuration.
McDonalds is also highly specialized in terms of employee tasks. There is
departmentalization in the workplace and everyone is assigned specific types of task to
complete. Since there is a high division of work, some jobs do not require any experience or
skills and it becomes easy to replace in the labor market. Some jobs only require high school
education even though different education levels are required in different job levels.
Also, everything is standardized in McDonalds including its menus, products, rules,
regulations, services, location choices, institutional structures. There are many franchises of
McDonalds all around the world and they are closely scrutinized to keep McDonalds
standards fixed. They actually think that standardization all around the world made them so
successful. On the other hand, as the customer profile expanded and cultural differences
resulted in different demands of services, then McDonalds has also adjusted itself to these
environmental changes. Therefore, it also included vegetarian menus, cultural menus, and
services. For instance, you can find rice burger in Taiwan, beer in German, McHuevo in
Uruguay, grilled salmon sandwich in Norway, seafood soup and rice in China McDonalds
restaurants. Such adaptation is actually suggested by modern theories like systems theory,
open-systems theories. Contingency theory argues that survival of the organization is
contingent, so organizations depend on their environment. In a rapidly changing environment,
organizations need to keep up with the changes to adopt itself to environment appropriately.
Also, institutional theory and some postmodern theories argue that social and cultural
pressures may push organizations to confirm with prescribed forms, norms, beliefs,

expectations, and values. It is also important for the legitimacy of the McDonalds in different
countries as they affect McDonalds way of doing business.
The organizational structure of McDonalds provides a limited span of control of
supervisors, so there is quite order, discipline and control in the workplace over the
employees. On the positive side, organizational culture allows differences in employee and
manager profiles, so diversity exists in the workplace. Also, equity in the employee profile is
strictly followed as Henry Fayol suggests. Most of the personnel of this international
company are composed of local people without any discrimination of race, ethnicity, gender,
or religion. On the other side of the coin, what can we understand from the organizational
structure of the firm is that it is mostly structured as the classical theories suggest as the main
motivation of the company is continuous growth beyond their limits by pursuing efficiency,
effectiveness, and productivity. Therefore, there are many harsh criticisms directed to
McDonalds. For instance, McJob term was coined to refer jobs with low payment and little
skill, but without career advancement opportunities. In 2003, this term even took its place in
the Merriam-Websters Collegiate Dictionary (merriam-webster.com).
If we analyze the environment of the McDonalds, the external environment is
composed of three elements: inter-organizational network, general environment, and
international global network. Its suppliers, customers, competitors, unions, regulatory
agencies, and special interest groups compose the inter-organizational network. Its suppliers
are 98% local producers and brands. In Turkey, Pnar supplies red meat, Banvit supplies white
meat, sauces are from Kta and Tat, dairy products are from Danone, and so on. Customers
are all the citizens around the world where McDonalds restaurants and cafes are located.
Their major competitors are KFC, Burger King, Starbucks, Wendys, Pizza Hut, Taco Bell,
and many local fast food chains. As for the general environment, it includes many sectors like
political, economic, technological, social, cultural, physical environments. Since it is an

international company, it is highly affected by its general environment. Therefore, these

sectors vary from one country to another and their influence on McDonalds will differ
greatly, so I will not be able to present its general environment data like demographic
structure, religious affiliations of the countries(halal, kosher, Indian, etc.), financial indicators
of the countries, legal structures, et cetera. As for the international global network,
McDonalds is also bound with some regulations of international agents on energy,
environmental issues, and global economic conditions. As it is an international organization
itself, McDonalds also affect its environment greatly
Adjusting to its environment is essential for the survival of McDonalds and there are
many successful examples in the world. For example, it was highly discussed if McDonald's
would survive in countries like China and Japan with great traditions and cultures. It
successfully adjusted its western model of service to the Eastern countries through
organizational culture and adjusting to the environment by boundary spanning.
In my opinion, in order to increase the chances of survival, McDonalds company
should have a more flexible structure with less standardization, less formalization, and less
hierarchy. Employees should be given more authority and initiative so as not to alienate them.
It should not put much pressure of the organizational culture upon their employees and it
should be more open to environmental changes such as meeting the demands for more healthy
products. It should not disregard some demands if they are unprofitable if it wants to increase
its survival in the future. Today, there are many movements against obesity, environmental,
exploitative advertising, and cultural neglecting and McDonalds is also targeted like many
international companies. Some even argue see such companies as the systems or instrument of
domination as the critical theory claims. Organizational pathologies exist in McDonalds like
request for over-conformity, excess standardization, and alienation of the workers. Therefore,

McDonalds should gain the capacity to self-regulate according to its environment, which is
called cybernetics, and it should learn to learn (double-loop learning).
REFERENCES:

Baron, D. (n.d.). Take This McJob and Shove It. Retrieved on 29.05.2015 from
http://www.english.illinois.edu/-people-/faculty/debaron/essays/mcjobs.htm
Strawory, B. (2014). Motivational Theories at McDonald's Report. Retrieved on 29.05.2015
from http://www.termpaperwarehouse.com
www.aboutmcdonalds.com

MAHMUT KARAAHMETOLU
1857408