External/Internal Factors
External/Internal Factors Affecting Management Functions
McDonalds is a multi-million dollar corporation that opened its doors in 1955. It is known worldwide and is now in 122 countries with over 22,500 restaurants throughout. To create the successful business that McDonalds has created, there is an excellent foundation of planning, organizing, leading and controlling. These are the four functions of management. However, there are many factors that affect these four functions. They are affected by internal and external factors. They are also affected by globalization, technology, innovation, diversity and ethics. The McDonalds management teams use delegation to deal with the different factors to control the four functions of management on a daily business to keep McDonalds successfully running.
Internal factors that would affect the four functions of management are production methods, technical knowledge, and skill levels of employees. If production methods are not clean, healthy and free of contaminants, customers could become ill, forcing a shutdown until health inspections have been passed. If employees and management are not knowledgeable of the technologies used, the cost of fixing errors could raise financial goals and lower production goals. The skill levels of employees need to fit the company??™s expectations by the bare minimum or the training could become costly.
External factors that would affect the four functions of management are competition, customer behavior, economy, technology changes, and government interference. Competition could lower their prices below McDonald??™s prices and offer better sales. Customer behavior could be the choices that customers make between McDonald??™s and another fast-food organization. The state of the economy as a whole could affect the purchasing decisions of the customers and affect the sales goals from one time to the next. Technology changes almost daily and may not be compatible with current technology being used.
Globalization is a necessity for success and survival in the market; however global competition is heavily populating the area with the fast-food industry today. McDonalds has joined corporations with restaurants in 119 countries. Important strategic decisions are a key factor with McDonald??™s success with thought for both internal and external factors. When a company is considering the foreign market, they need to consider the risks. Global marketing is not any different from local marketing but a company??™s decisions are made unique to each country and their laws. With McDonalds working in a global market, this allows them to work with different cultures and backgrounds of employees and customers. This business strategy keeps them to their commitment in a diverse workforce.
Changes in technology have provided many new opportunities for companies all over as well as damage others. For instance, the invention of the Internet has changed the way that nearly every company markets their product but has also hurt many industries such as the post office. Postal Services are being shut down all over the United Stated because electronic mail and automatic bill paying options are forcing their hand. Companies like McDonalds, however have remained successful by acceptance of the changes and implementing their business with the new technologies today. McDonalds utilizes a website in which consumers can view their menu and daily nutrition information as well as a restaurant locator. They have even implemented free Wi-Fi connections for their customers.
Innovation is the introduction of new goods and services. In the planning process the managers must take into account that there are other companies around them that are also trying to offer that same product. The goal of the managers should be to market their product better than their competitors; Management must organize how they plan on getting their product into the public eye and plan on how they need to continue to make their product more and more appealing to their target customers. Some companies may put a team in place to hype up the customers via advertising to keep them coming back and there should also be a team in place to monitor how the product is moving and monitor the competition just in case changes need to be made. For example, McDonalds has some great advertising skills. The majority of their commercials appeal to children with Ronald McDonald and the different toys they offer. Their marketing team stays on top of their research and keeps up with the latest kids??™ movies as well as kids??™ games and toys that come out; that way when they are always ready with something new to offer the children on a daily basis. Even though their menu has been the same for years they have different incentives to bring the children and parents through the doors.
There are two forms of diversity that can affect the four functions of management: concentric diversification and conglomerate diversification. These forms of diversification are used by management to add new businesses that also make the same or similar products or totally different product in a totally different market; that gives the company a way to expand their services to other businesses in order to reach a greater market. For example McDonalds is a restaurant and offers fast food and drinks to their customers. They reached out to Wal-Mart which is a retail company and put a small restaurant inside so that the Wal-Mart shoppers could enjoy McDonalds while shopping or after shopping when leaving the store. McDonalds proved in that point they were able to be diverse with where they offered their services and didn??™t limit themselves to just outside drive up restaurants.
McDonalds has a code of ethics that each of them should follow and adhere to. The code of ethics is used as the foundation in which McDonalds stands on. It holds not only the upper level management accountable for their conduct but the subordinates as well. I believe the ethics of the company affects the organization and control functions of management because it sets the grounds for discipline and how things should be handled when task haven??™t been met.
Delegation plays an important role in large companies, and McDonald??™s is one of the biggest. Present in countries throughout the world, McDonald??™s has to have a firm grip on the idea of delegation if they are to maintain consistency throughout their franchises.
Delegation applies to the four functions of management at McDonald??™s. Planning and Organization can benefit from delegation immensely. The people working with the processes are those whose input is needed to accurately assess how current procedures are working, be they preparation, safety, or closing procedures. Leadership is important to delegate appropriately in such a large company. Delegating leading can involve individual restaurant managers, shift leaders and trainers. One way to add value to a team is to promote a trainer at each position in the store, someone who is generally considered to be the best at a certain job to teach others. This will add value because that team member will feel pride, even if the company does not have the openings to promote that person to a shift leader position.
In such a large company, delegating monitoring and controlling is very important. Aspects of working at McDonald??™s that can be monitored and reported up to check for changes are checks for hourly cleanliness, drive through wait times, waste, and customer feedback to name a few. These checks can be made and evaluated at the store level before they are reported up the chain. In this way problems can be taken care of at the store level or someone can step in from higher up if fixing the process is slow in coming.
With such a company as large as McDonald??™s, globalization is definitely something to be considered. Delegation as it pertains to globalization is difficult, but the company has a consistent brand, so procedures must be delegated throughout the different franchises around the globe. There is a different regional flair to McDonald??™s around the world, but a customer should be able to walk into any McDonald??™s from Germany to Mexico and order a Big Mac or that franchise does not really qualify as a McDonald??™s.
Technological delegation is less important. While McDonald??™s does need to keep abreast of the newest fast food technology, perhaps even creating their own, this is not typically something that the average line cook should be responsible for. Encouraged to contribute ideas, absolutely, but not responsible for.
Innovation falls in a similar vein. Innovation is very important in such a full and diverse market as fast food. If a company wants to stay on top it is very important to continue to utilize forward thinking. McDonald??™s does this with ideas like their Mom??™s group, a group of Mom??™s who is allowed access to all aspects of the food preparation process to give or withhold their stamp of approval. Delegation of Innovation is similar because lower level employees should not be held responsible for this but should be encouraged to participate in brainstorming or sharing their ideas. Employees should be consulted as their more hands on familiarity with the process gives them more intimate knowledge of what could be changed or done better, or what products customers look for but McDonald??™s does not currently carry.
Diversity is important to any large company, McDonald??™s no less so. Diverse ideas and backgrounds are important to the viability of companies, allowing them to think more broadly. Delegating diversity is a difficult concept. Managers should hire the best person for the job, but the best people should add something to the company, so paying attention to how people??™s differences make them all more complete parts of a whole is probably the best way to go about delegating diversity.
Last is ethics. Delegation of ethics is an awkward phrase, so perhaps a more accurate statement would involve creating a company in which ethics are not questioned. If the company is run with the knowledge that managers and employees alike are held to a high ethical standard, the idea will be delegated down by the culture of ethics around the employees.
McDonalds continues to be successful after 55 years. Their success is contributed to their continual work to ensure the four functions of management are all in place and working together. There are ever changing factors that affect the four functions. McDonalds has been able to keep the functions all in place by controlling each of these factors. They are constantly researching globalization and new technologies so they can change with the ever changing world. McDonalds also leads the way with their innovative ideas by brainstorming and allowing groups of customers to help approve or deny products. They also attribute their success to staying very diverse to appeal to a large demographic of people. Lastly, McDonalds has a strong code of ethics throughout the whole company which sets the foundation of their business. They have also become experts in delegation throughout the world and within the company to maintain consistency with how the company is being run. McDonalds has and will continue to be a growing establishment throughout the world as they maintain the four functions of management successfully.
References
http://www.ehow.com/how_2073634_open-mcdonalds-franchise.html
McDonald??™s, (2010). Retrieved July 9, 2010, from McDonald??™s Website: http://www.mcdonald??™s.com
http://www.aboutmcdonalds.com/mcd/investors/corporate_governance/financial_officer_code_of_ethics.htmlDCSext.destination=http://www.aboutmcdonalds.com/mcd/investors/corporate_governance/financial_officer_code_of_ethics.html
