Things move quickly at McDonald's, whether we're serving our customers delicious food or helping our own people to build their futures. In our workplace, we promote flexibility, opportunity, equality and development. McDonald's employees come from all walks of life, but share a common approach: positivity. We know that happy employees help to make happy customers, so we want you to enjoy your work. And we're certain you will.
-mcdonalds.com
Let's take a look at the McDonald's organizational model, which helps the company fulfil its mission, by examining its management structure, organizational structure and organizational culture.
Introduction to McDonald’s
McDonald's is an American fast food company founded by the McDonald brothers, Richard and Maurice McDonald in 1940 in San Bernardino, California, United States. They opened a hamburger stand which later on turned into a franchise. In 1955 Ray Kroc, a franchising agent, founded McDonald's System Inc., a predecessor of the McDonald's Corporation, and in 1961 bought the exclusive rights to the McDonald's name and operation technique. By revenue, it is currently the largest restaurant chain in the world with 38 thousand locations in over 100 countries, serving 68 million people daily.
Do you want to know more about how franchising works? Check out our explanation on Franchises.
McDonald's management structure
According to the most recent data from 2020, McDonald's employs around 200 thousand people. The company's employees consist of chief executive officer (CEO) Chris Kempczinski at the top and the board of directors. Below that, the company is divided into separate departments such as marketing, sales, finance, restaurant and supply. Each country or area has separate departments with its own country heads, managers and other staff members. All of them together make up for the McDonald's organizational structure, a system that outlines how activities are managed in order to achieve the objectives of a business.
Figure 1. McDonald's Organizational Structure - StudySmarter Originals.
McDonald's has several top-level executives. These include the chief executive officer and the other directors such as chairman of the board, senior marketing manager, senior sales manager, chief financial officer, chief restaurant officer, chief operating officer among others. They are responsible for making decisions, setting objectives, finances, operations and the overall supervision and functioning of the company.
After the top-level executives, there are five departments that have specific responsibilities:
- The marketing department is responsible for marketing and advertising. It takes care of maintaining the right exposure and brand image of the company. It consists of a country head, a marketing manager and an advertisement manager. Each country has its own marketing department to maintain marketing and advertising in the area.
- The sales department is responsible for sales-related duties and tasks. It makes sure they are run properly and effectively. It consists of a country head and a regional sales manager. Each country has its own sales department taking care of sales in the region.
- The finance department is responsible for finance, accounting and anything related to money. It ensures the right money flow, investment and fund handling. It consists of a country head, finance manager and account manager. Each country has its own finance department taking care of money matters in the area.
- The restaurant department is responsible for ensuring that restaurants are run properly. It consists of a country head, restaurant manager, staff training and crew members such as cooks, servers and cleaners. Each country has its own restaurant department taking care of restaurants in the region.
- The supply department is responsible for ensuring that the company is supplied with all the necessary resources such as food items and packaging materials for restaurants. It consists of a country head, procurement, logistics and storehouse. Each country has its own supply department taking care of supplies in the area.
McDonald's organisational structure
There are different types of organizational structures regarding:
- decision power (centralized and decentralised organizational structures),
- leaders and layers of management (flat and tall organizational structures),
- other types (functional, product-based and matrix organizational structures).
Below you will find the analysis of McDonald's organizational structure.
First of all, McDonald's has a decentralized organizational structure.
A decentralized organizational structure is when lower levels of a business hold the decision power.
It is usually present when the business has many locations and therefore the head office is reasonably unable to control or make decisions for all the locations. McDonald's operates in over 100 countries in the world which makes it impossible for the CEO to control all the operations in every country. Instead, each country has its own head, manager and other staff members who take care of operations in specific departments.
McDonald's organizational structure is also tall (hierarchical) which means that there are many leaders and layers of management. Here managers have a narrow span of control and there is typically a long chain of command. As you can see in Figure 1, McDonald's management starts with the chief executive officer, board of directors, country heads, managers and other employees. It means that, for example, people responsible for advertisement report to the marketing manager who then reports to the country head of the marketing department. The country head reports to one of the directors who report to the chief executive officer.
Lastly, the company follows a product-based organizational structure where employees are grouped based on: a particular product they work on, customers they deal with, or a geographical area they serve. In the case of McDonald's, they are grouped based on a geographical area they serve as each department has its country head. This is because every country has its own head for marketing, sales, finance, restaurant and supply departments.
McDonald's organisational structure in the United Kingdom
Above you were able to see McDonald's organizational structure globally. Although there are some main departments operating in every geographical area, each country can have some additional departments according to its needs. When it comes to the United Kingdom, below the chief executive officer and board of directors, departments are broken into:
- Corporate affairs,
- Marketing,
- Human Resources,
- National operations,
- Regional managers,
- Finance,
- Information,
- Strategic planning.
There are also other functional departments such as legal, customer services, franchising, safety, security and licensing, property and construction, supply chain and restaurant services.
To learn more about the different types of organizational structures have a look at our explanation of organizational structures.
McDonald's organisational culture
Organizational culture is a collection of organizational shared values and practices that guide employees' actions and behaviors in the organization. McDonald's organizational culture supports people, learning and diversity which aim to emphasize human resource development, operational efficiency and productivity.
People
The organizational culture of McDonald's prioritises employees' needs and development. Its values reflect the importance of people in the company and aim to support them - which is understandable as McDonald's is operating in the service industry. In doing so, the company promotes the engagement of management to help improve its processes.
Learning
The McDonald's organizational culture supports both individual and organizational learning. It believes that learning enhances productivity, quality and business performance and therefore the company offers various training and development opportunities. Additionally, it applies the knowledge to the organization through programs and meetings where employees can give and receive feedback and share their knowledge.
Diversity
Diversity and inclusion are also key factors in McDonald's organizational culture. The company outlines the importance of these aspects by optimizing human resources capabilities to deal with the diverse market. It also promotes feedback and conversations between employees, suppliers, franchisees and customers to support these values.
To learn more about the importance of organizational culture in business, have a look at our explanation of managing organizational culture.
In conclusion, both organizational structure and culture have a huge impact on how McDonald's performs and fulfils its mission. The company's core values and its decentralized, tall and product-based structure shape the overall operations of the company.
McDonalds Organisational Structure - Key takeaways
- McDonald's is an American fast-food company founded by the McDonald Brothers, Richard and Maurice McDonald in 1940 in San Bernardino, California, United States.
- By revenue, it is currently the largest restaurant chain in the world with 38 thousand locations in over 100 countries, serving 68 million people daily.
- McDonald's employs around 200 thousand people.
- The company's organizational structure consists of a CEO, board of directors and departments separate for each country or region.
- McDonald's organizational structure is decentralized, tall (hierarchical) and product-based.
- Its organizational culture highly values people, learning and diversity.
Sources:
https://www.mcdonalds.com/us/en-us/about-us/our-history.html
https://corporate.mcdonalds.com/corpmcd/our-stories.html
https://www.mcdonalds.com/gb/en-gb/help/faq/18509-whats-the-structure-of-mcdonalds-and-how-each-department-in-the-organisation-interacts-works- together.html
http://www.orgcharting.com/templates/mcdonald-organizational-structure/
http://panmore.com/mcdonalds-organizational-structure-analysis
https://www.statista.com/statistics/819966/mcdonald-s-number-of-employees/
https://www.hierarchystructure.com/mcdonalds-company-hierarchy/
http://panmore.com/mcdonalds-organizational-culture-analysis
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