McDonald’s Leadership Change

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Introduction

McDonald’s Corporation is a global foodservice retailer and the world’s largest fast-food restaurant. The company was initially founded as a restaurant in 1940 and currently, it operates over 38,000 stores worldwide. This paper examines how leadership in McDonald’s has been impacted by the COVID-19 pandemic. Particularly, it will focus explicitly on how Macdonald’s leadership has changed its tactics to ensure that it copes with the pandemic’s effects.

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Company Profile

The company was initially founded as a restaurant in 1940 by Maurice and Richard McDonald in San Bernardino, California. Currently, the organization operates over 38,000 stores across a hundred and twenty countries worldwide. Upon its instigation, McDonald’s was a single barbecue food store, but the founders later revolutionized its business model and set up hamburger stands. Currently, the food franchise serves over 68 million customers per day across its stores (Dudovskiy, 2016). Even though McDonald’s is famous for its French fries, cheeseburgers, and hamburgers, the retailer also offers breakfast items, chicken products, beverages, desserts, and wraps. To respond to consumer demands and keep up with healthy eating habits, McDonald’s added fruit, salads, smoothies, and fish.

The firm’s revenues primarily stem from royalties, rents, fees paid by the different franchises, and company-operated stores. Today, McDonald’s hires over 1.7 million people and is rated as the world’s 2nd largest private employer. The establishment was also ranked number 131 on the Fortune 500 largest US corporations (Dudovskiy, 2016). McDonald’s Corporation was selected for this assessment because ever since the pandemic’s onset, many food joints and vendors were shut down to maintain the safety of both the employees and the public. However, McDonald’s is among the food vendors that remained open since the need to maintain operation during this period became evident. McDonald’s has had to transform and change its leadership style to ensure that it serves its customers faithfully while still providing its employees with the necessary protection.

Leadership in McDonald’s Before COVID19

Before the pandemic, McDonald’s had a particular leadership type, which dictated how it managed its business across different regions. The company always used the democratic leadership style, where the leaders encouraged employees to collaborate and work in teams instead of individually. The management promoted the free movement of ideas amongst group members and encouraged brainstorming to help the business achieve its goal. This approach had been beneficial because workers were involved in decision-making processes by offering their ideas and opinions.

Employees at McDonald’s are motivated and focus on customer satisfaction. The leadership in McDonald’s majorly concentrated on quality and the customer’s needs. The leadership’s focus on consumer satisfaction ensured that the organization remained open 24/7 to allow clients to purchase products at any time of the day. Democratic leadership was initially useful for McDonald’s because the business was predictable, and there had been no eventualities or sudden changes that grossly affected it. However, the COVID 19 pandemic hit the world in January 2020. The enterprise has had to make changes in its management styles and operations to accommodate the impacts and keep afloat.

Leadership Changes in McDonald’s Over the Past 10 Months

Introducing New Policies

For McDonald’s, the priority during the pandemic is the safety and well-being of its overall workforce. The employees can only focus on their job responsibilities when their well-being and families are assured (Cankurtaran and Beverland, 2020). The enterprise’s leadership has developed new policies regarding how employees report to work and the safety measures they are supposed to take (Cankurtaran and Beverland, 2020). Previously, team members only needed to have an appropriate bill of health certified by a qualified healthcare practitioner. Now, management has had to introduce a new policy requiring employees to have COVID-19 clearance before continuing with their duties. The company has also enforced new policies that require leadership to validate that emergency systems are tested routinely.

Staffing

The company leadership has also made significant changes in its staffing procedures. Previously, the business would continuously hire new staff regularly to help keep up with the ever-growing customer needs (Hollingworth, 2016). However, since the pandemic hit, the enterprise’s management has significantly cut down staffing and recruitment. The company does not recruit any new staff and has stuck to the existing ones who understand the market and are willing to make the necessary organizational changes (Hollingworth, 2016).

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However, the company has now turned to contractual recruitment for other services introduced during the pandemic, such as home deliveries. In such cases, the leadership relies heavily on online recruitment and ensures that the employees and customers have minimal interactions (Hollingworth, 2016). The administration also had to stop standard strategies such as work transfers and relocation of staff because personnel in alternate sites may be impacted differently by the pandemic.

New Business Operations

McDonald’s leadership recognizes that business cannot continue working as usual, especially with the curfew times and total lockdowns. As such, the leadership had to change its operations to comply with the set regulations and satisfy its customers’ needs. Initially, the company would have its customers sit in at any time to enjoy a cup of coffee and other niceties (Cankurtaran and Beverland, 2020). However, since the outbreak of the pandemic, the company’s leadership has changed the way it operates.

All the distribution channels have been changed to drive-ins instead of walk-ins or sit-ins. Customers are only allowed to make a short stop at the stores to make their orders and are restricted from entering the stores and sitting down for their drinks (Hollingworth, 2016). The company has also enhanced its delivery services because the orders for deliveries doubled during the pandemic. As such, the leadership has had to contact more delivery employees to cater to these growing customer needs.

Focus on Changing Their Budget

Since the pandemic struck, McDonald’s leadership has also had to revamp its budget to meet the extra expenses. Previously, the company relied on an annual budget system that required minimal altercations to fit its operations. Budgeting was always done by predicting outcomes using the previous year’s budget (Cankurtaran and Beverland, 2020).

However, now the leadership has had to alter its budget and draft a new one without looking at previous budgets. The budget is not made to cater to new demands brought about by the pandemic, such as PPEs for the workforce, more delivery equipment, compliance with COVID 19 regulations, and other services and products (Cankurtaran and Beverland, 2020). The company’s leadership has also had to shift the budget to include tools and equipment to enable the workforce to work remotely, virtually identify workarounds for crucial tasks that cannot be executed at home, and perform periodic testing.

Focus on Employee Training and Education

Previously, McDonald’s leadership focused on employee training efforts on enhancing employee skills and knowledge. This training was aimed at ensuring that employees perform their duties well to achieve consumer satisfaction. However, leadership has had to change the training scope since the pandemic hit (Cankurtaran and Beverland, 2020). Currently, training efforts aim to teach workers de-escalation tactics to handle stubborn customers who will not wear masks or refuse to maintain social distancing. This policy aims to provide a proactive focus and approach to quickly find solutions when customers refuse to take precautionary measures (Cankurtaran and Beverland, 2020). Education and training are aimed at teaching employees about hygiene procedures during work hours and even at home. The purpose is to ensure that employees maintain safety procedures even while out of work.

Customer Engagement

McDonald’s leadership has also made changes in the way they engage with customers. Previously, most of the customer engagements were through face-to-face interactions. Although the company had social media pages where employees could engage with customers, the system was not fully enhanced. Most customers would come to the stores and give personal reviews on the review boxes (Hollingworth, 2016). However, since the pandemic, McDonald’s leadership has enhanced social media communication channels to maintain continuous communication with its customers (Hollingworth, 2016). Through these channels, McDonald’s reinforces the idea that their customers are a priority and provides useful information to alleviate their fears (Hollingworth, 2016). The company’s social media and website have proven to be valuable tools to address customer concerns proactively.

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Corporate Social Responsibility (CSR)

For decades, McDonald’s has been aware that for it to be successful, it had to promote corporate citizenship and offer benefits to local communities where it operates. For example, in India, the company provides monetary assistance and sponsors various community initiatives to promote environmental protectionism. The firm does this by participating in local school activities by funding education and building infrastructure within local communities (Schmid and Gombert, 2018).

However, during the COVID19 pandemic, the company has shifted its CSR initiatives to meet its communities’ needs. Many families faced food shortages and starvation as a result of the pandemic. McDonald’s took the initiative to provide food and drinks to the less fortunate and families living on the streets (Hommerová et al., 2020). The company has also proactively engaged in providing essential information that has been useful for customers and society at large.

Personal Decision-Making Style

The best decision-making style for McDonald’s Corporation at this time is the conceptual style. The above-mentioned decision-making framework involves thinking about the big picture and taking risks. It involves evaluating different possibilities and options and having a high tolerance for ambiguity (Abubakar et al., 2019).

The model also involves reasoning about creative solutions and looking forward to the consequences of the decision. Conceptual decision-makers make conclusions based on the visualization of different opportunities and future outcomes (Abubakar et al., 2019). This decision-making style takes on a more social approach and encourages collaboration and creative thinking, focusing on a wide array of perspectives (Abubakar et al., 2019). Conceptual decision-making is best suited for problems that involve many different ideas.

The above-mentioned style is best suited for situations and events characterized by unpredictability and the need for creative innovation. Conceptual decision-making is the best alternative for these situations because it accounts for unknown variables and long-term planning (Abubakar et al., 2019). Therefore, during the time of the pandemic, McDonald’s leaders have to rely on conceptual decision-making to cover the unpredictable variables and create innovative and creative teams to come up with effective strategies to cater to customer needs.

Transformational Vs. Transactional Leadership Styles

Transformational leadership is a management style where leaders empower, motivate, and inspire subordinates to innovate change to help shape and grow its success. Managers accomplish this goal by setting an example through a robust sense of worker ownership, influential corporate culture, and independence. The company heads empower their subordinates to make decisions without micromanaging them (Khoshhal and Guraya, 2016).

Transformational leaders empower the workforce and prepare them to become supervisors in their own right through training and mentorship, thus going beyond just managing daily operations. Instead, they turn to smart strategies that are aimed at moving the company or department to success (Cankurtaran and Beverland, 2020). These managers focus on team building, employee collaboration, and motivation to achieve change for the better through setting goals and offering incentives to motivate their subordinates to perform better while at the same time providing opportunities for both professional and personal growth.

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On the other hand, transactional leadership is a management approach whereby managers and supervisors rely on rewards and punishment to ensure optimal performance. Therefore, this administrative style involves a transaction or exchange (Nawaz and Khan, 2016). The company head rewards employees who perform best in their duties and punishes those who do not perform according to the set standards (Nawaz and Khan 2016). These managers assume that employees are not self-motivated to perform their duties, and therefore, they need supervision, instruction, and structure to achieve organizational goals.

The above-mentioned theory also assumes that employees will perform duties as they want them to exchange for something they want, such as pay. Bosses who adopt this management approach are concerned with maintaining the standard flow of operation. This can be described as ‘keeping the ship afloat.’ Transactional leaders use disciplinary powers and numerous incentives to motivate their subordinates to perform their utmost best (Northouse, 2018). They do not generally look ahead in strategically moving the organization in a position to be the market leader, but instead, they are mainly concerned with making sure that everything moves swiftly today; thus, they exchange rewards for performance.

Impacts of Working Remotely on Management

Remote or home working has many impacts on management, most of which are positive. Increasing the number of remote workers helps increase agility and flexibility. When employees work remotely, they are better placed and more willing to work for more hours or even during weekends (Elshaiekh et al., 2018). This helps management save on paying overtime or other expenses incurred when teams work from the office (Elshaiekh et al., 2018). Remote working also enhances trust because employees believe that their employers trust them to work even without supervision.

This is beneficial for management because it contributes to staff loyalty and engagement. Increasing the number of remote workers also attracts new talent and expertise (Elshaiekh et al., 2018). Management can offer employees remote work as an incentive to work. The option of working from home provides an advantage in the market over competitors. As such, more people will be attracted to the company, and management will enjoy a large pool of employees to choose from (Elshaiekh et al., 2018). Lastly, increasing the number of remote workers increases productivity due to fewer disruptions, which are typical within an office setting.

Conclusion

McDonald’s Corporation is a global foodservice retailer and the world’s largest fast-food restaurant. Before the pandemic’s onset, the organization’s management utilized the democratic leadership approach. However, over the past ten months, the firm has undergone significant changes. The best decision-making style for McDonald’s Corporation at this time is the conceptual style. Working remotely has also been linked to several benefits, including improved employee morale and the acquisition of new talents.

Reference List

Abubakar, A. M. et al. (2019) ‘Knowledge management, decision-making style and organizational performance’, Journal of Innovation & Knowledge, 4(2), pp. 104-114. Web.

Cankurtaran, P. and Beverland, M.B. (2020) ‘Using design thinking to respond to crises: B2B lessons from the 2020 COVID-19 pandemic’. Industrial Marketing Management, 88, pp. 255-260. Web.

Dudovskiy, M. (2016) McDonald’s value chain analysis. Web.

Elshaiekh, N. E. M. et al. (2018) ‘The impacts of remote working on workers performance’. Proceedings of the 2018 International Arab Conference on Information Technology (ACIT), Werdanye, Lebanon. Web.

Hollingworth, P. (2016) The light and fast organisation: a new way of dealing with uncertainty. Queensland: John Wiley & Sons.

Hommerová, D. et al. (2020) ‘The perception of CSR activities in a selected segment of McDonald’s customers in the Czech Republic and its effect on their purchasing behavior: a case study’. Sustainability, 12(20), pp. 1–17. Web.

Nawaz A., and Khan, I. (2016) ‘Leadership theories and styles: a literature review‘. Journal of Resources Development and Management, 16, pp. 1–7. Web.

Khoshhal, K. I. and Guraya, S. Y. (2016) ‘Leaders produce leaders and managers produce followers: a systematic review of the desired competencies and standard settings for physicians’. Saudi Medical Journal, 37(10), pp. 1061–1067. Web.

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