COURSE:

FUNDAMENTALS OF MANAGEMENT (MGT162)

SEMESTER:

OCTOBER 2020- FEBRUARY 2021

REPORT TITLE:
INDIVIDUAL ASSIGNMENT
(McDonald’s)

PREPARED BY:
NAME : NUR RAUDHAH BINTI ROSLAN
STUDENT I/D : 2020815962
CLASS : AC1101C

PREPARED FOR:

SIR MOHD AIDIL RIDUAN AWANG KADER

Table of content

Bil Contents Pages

1 Introduction of McDonald’s 1
2 Planning 2-3
3 Organizing 4
4 Leading 5
5 Controlling 6–7
6 Conclusion 8
7 References 9 - 10
 Introduction of McDonald’s

McDonald’s is started by Brother Maurice and Richard McDonald in 1948. In the first place,
Brother Maurice and Richard McDonald were actually opened a barbeque restaurant. One
day both of them decided to change into a hamburger and milkshake restaurant. McDonald’s
only focussed on selling burgers, fries and various kind of shakes.

Brother Maurice and Richard McDonald discovered a simple way to produce more foods at a
low cost. They used a self-service system that eliminated other workers and waitress. Ray
Kroc, an American businessman who travelled to work, found a small yet successful
restaurant that happened to be Brother Maurice and Richard McDonald restaurant. He was
amazed by the effectiveness of the system in competing with other competitors. He was
interested to franchise the restaurant. Ray Kroc then buy the right to franchise the restaurant
from Brother Maurice and Richard McDonald.

Ray Kroc then introduced McDonald’s Corporation, he bought the McDonald’s brother and
expand his company until the company started to trade publicly in 1965. Then, he introduced
an icon for McDonald’s which is a clown named Ronald McDonald.

Because of the hard work and competent that shows by Ray Kroc, McDonald’s continuing to
expand from United States (US) into the international market. Today, McDonald’s have more
than 33,000 franchise of restaurants around the world including our country, Malaysia.
McDonald’s also have various menus of burgers, McCafé and many more in all branches.

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Planning

McDonald’s is one of the top managements of fast-food industry in the world. McDonald’s
vision is “to generate more profit and become an even better McDonald’s, selling more
customers delicious food everyday across the world.” This vision of McDonald’s is stated
based in the growth plan that was introduced in 2017. McDonald’s vision is to improve the
brand and aim to grow bigger and bigger by day and getting profit by it. It is stated that even
though they are getting bigger in the fast-food industry, but they still want the quality of food
that they produce in excellent quality and delicious.

The main mission of McDonald’s is “To be our customer’s favourite place and way to
eat.” McDonald’s want their customer to eat happily every day at their restaurants as it is
their favourite comfort food, this mission led McDonald’s to produce many kinds of foods for
breakfast, lunch, dinner and snacks according to the customer tastes so that customer can
have many options to eats whenever they want. McDonald’s also develop a layout and
designs of their restaurant uniquely. As an example, in McDonald’s Putrajaya, they have set
out a Korea layout and design in the restaurant when their Spicy Korean Burger are
advertised. Moreover, in each country, there are unique McDonald’s restaurant that have
been build. For example, in Penang, Malaysia there is a McDonald’s restaurant named
McDonald’s Birch House, the restaurant was originally a tin smelting factory but have been
renovated because the building has been abandoned. Customers always love to try something
new and unique, so this is an excellent strategy in promoting their new menus and their
brand. McDonald’s mission statements are to serve healthy meals, be a favourite place for
any customers and always meet the customer’s expectations and satisfy them.

McDonald’s use many strategic planning to achieve their mission statements. Additionally,
McDonald’s started to have a healthy option in their menus. Before, there is only a diet coke
and shakes options as drinks but now there are numerous kinds of healthier drinks which is
less calories than Coke such as drinking water, ice lemon tea and many more. In the kid’s
menu, which is Happy Meal, McDonald’s started to included corn salad in their options
instead of fries. McDonald’s fries are known to be high calories as a burger and high in fat.
These are one of the McDonald’s plan to serve more healthy meals, in the future they will
improve their healthy meals and compete with another fast-food brand.

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Furthermore, in order to achieve their mission to provide a good service and be a favourite
place for customers to eat, McDonald’s always remain a good quality of food, training their
employees and build a cosy and conducive restaurant. As an example, McDonald’s
monitoring their quality from the beginning to end, they have their own farm and factory to
produce their ingredients, they control everything from scratch. This allows them to do a
quality control not only in the kitchen but from the ingredients itself such as high-quality
potato that harvested from their farm and processed in their own factory. McDonald’s also
have their procedure in each recipe they made such as how long the burger must cook and
what amount of mayonnaise to put. Trainings is a must to every employee so they can have
knowledge on how to treat the customer and handling problems. Since 1982 until now, there
are so many branches of McDonald’s restaurants in the world, all of the restaurants are
occupied with air conditioner, kids’ playroom, some of them have meeting rooms and most
importantly free Wi-Fi. Facilities that McDonald’s provide for their customers are useful,
students love to take this advantage to choose McDonald’s as their place for discussions.
Kids will love to eat at McDonald’s as there is playground for them to having fun and
McDonald’s also provide party supplies and packages for birthday parties for their customers.

Finally, in order for McDonald’s to always meet the customer’s expectations and satisfy
them, McDonald’s always improve their services through technology and research and
development (R&D), McDonald’s have created a self-service system in their restaurant. As
an example, not all but most of the McDonald’s restaurants have self-service kiosk to order
and pay. This system is easier and faster than a normal service. Moreover, in this pandemic of
covid-19, self-service kiosk is more efficient as there are less contact with other people and
can be easily sanitize. McDonald’s also always creating new recipes that suits the taste of the
locals. As an example, in McDonald’s Malaysia, we have ‘Nasi Lemak McDonald’s’ and
‘Durian McFlurry’. Both menus are popular among the locals as the creation were both local
foods inspired by local foods.

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Organizing

McDonald’s is a big business especially in the market of fast foods. They have branches not
only in Malaysia but around the world. It is quite impossible to organize the employees,
budget, and resources equally but McDonald’s managed to do it. There are organizing
process that McDonald’s follows in allocating their employees, resources, and budgets.

In the organizing process of detailing of work, the employees will know their responsibilities,
job scope, and job description in the position he/she applied. There are so many kinds of job
opportunities in McDonald’s restaurant such as kitchen crew and Barista. The top
management of McDonald’s will train them based on their application of position. As an
example, for Barista of McCafé, their responsibilities are to learn latte art skills and way to
brew coffee, have a positive personality and always make sure the McCafé is always clean.
Those who are applied will be interviewed by the manager and will be allocated based on
position’s applied, skills and experienced working at McDonald’s. All the description of the
job position will be informed earlier such as salaries and working hours.

Additionally, in the organizing process of coordination of work, McDonald’s organizations in

each branch are related and have to cooperate with each other to achieve the company goals.
As an example, McDonald’s Malaysia Managing Director and Local Operating Partner
Azmir Jaafar said that the company is aiming to have 70% of Drive-thru restaurants by 2021.
The top management of McDonald’s have to allocate budget and resources to open more
branches with drive thru. The accounting departments of McDonald’s will calculate the
overall budgets to build more drive thru restaurants and also including the amount of new
expenses such as salaries of new employees. Meanwhile, at the same time the HR will hire
more employees and trained them for the new restaurants. Moreover, McDonald’s Malaysia
plan to invest 1.24 billion by 2025. In order for them to achieve it, they have to make high
sales, the marketing departments of McDonald’s have to make an excellent job in promoting
their brands through billboards, social media’s advertisements and many more. The research
and development (R&D) department also have to develop more new unique menus to
promote to customers such as the new sea salt McFlurry in McDonald’s Malaysia. It has
unique taste and very popular during its promotions. The accounting departments need to
allocate more budgets for the marketing and the R&D departments in order to achieve the
company’s goal.

Furthermore, in the organizing process of monitoring and reorganizing work the business will
evaluate the work process from time to time. Hence, McDonald’s have allocated their
experienced employees in each branch in Operation Manager position. The Operation
Manager will monitor the employees every day and will make sure the company achieve the
goals. Operation Manager also the one who in charge in allocating resources, employees and
make decisions. The operation manager will be assisting by the assistant manager to help
them in daily operations such as checking the availability of stocks and solving problems.

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Leading

According to McDonald’s employees’ vision, they want to be the most favourite way and
place to work. McDonald’s is generally an autocratic leadership as only the top manager or
operation manager will make decisions in any decision making. The operation manager has
many responsibilities including training, leading, and motivating their team members.
McDonald’s top management have shown directive leadership styles to lead their team
members. Many McDonald’s corporation including Malaysia have been awarded with
numerous awards that related with employees such as Best Employer Award.

First and foremost, the directive leader style. This style is usually use in the McDonald’s
restaurants among the manager and the restaurant’s crews especially for a new employee. The
manager will use this leadership style to give guidance to the new employees. For instance,
every new McDonald’s employees must be trained first by the manager. The new employees
will do easy task in their first three months then will be assigned to tougher task.
Furthermore, this leadership style is used to schedules the employees work to be done. As an
example, McDonald’s manager will give direction and instructions to their restaurant’s
crews. The manager will also make a schedule on the crew’s working hours and task to do
based on their availability and experienced working at McDonald’s. The restaurant’s crew
will obey all the order given by their manager because they do not have authority to disobey.
In McDonald’s only the manager can do the decision making and lead the restaurant’s crews.
Equally important, the manager of McDonald’s will use the directive leadership to tell the
restaurant’s crews what McDonald’s expected from them. As an example, the kitchen crews
are not only a worker but the face of McDonald’s as they are the front liner who serve
directly to the customers.

As McDonald’s always concern with their employees, they always give motivations to their
employees in various forms such as bonusses and gifts. McDonald’s always give bonusses as
a reward for their employees. The rewards are source of motivation to the employees to work
harder and increase their productivity. As an example, during this covid-19 pandemic,
McDonald’s had decided to give bonusses to their employees that affected during this crisis.
They also provide a paid sick leave for any employees that infected with covid-19, provided
nurse’s hotlines, and support their emotions. In a nutshell, McDonalds also give awards as a
motivation for others to work hard. For example, McDonald’s held a recognition schemes
that provided awards for employee of the month for each restaurant and also Ray Kroc award
for the best manager. These awards can be given with rewards such as holiday or trips
rewards and extra bonus. This method definitely will increase the productivity of the
employees and will create a competitive environment. Besides, McDonald’s also provided
training and development program for their employees. This program is an opportunity for
them to develop their skills, strengths, and motivations so they can do better in the future.
This program can help them to be motivated to get promotion in their jobs. It is because the
higher position they have, more rewards and bonusses they will get.

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Controlling

Most company have their own hardships including McDonald’s. McDonalds had facing many
challenges and problems in the process of expansion of McDonalds including our country,
Malaysia. McDonald’s have been accused on so many halal issues, especially in Malaysia.
Halal issue is a sensitive issue in Malaysia especially in the food industry. It is because more
than half of the Malaysian are Muslim. McDonald’s Malaysia especially always been
boycotted by some people and always been accused of non halal ingredients. For instance,
McDonald’s have been accused of non halal coffee which contain pork lard in their McCafé’s
coffee ingredients. This issue went viral in the social medias as there are many other people
spread many rumours and fake news which cause a bad reputation to McDonald’s.

Additionally, around 2014, McDonald’s have been accused of using pink slime in one of their
menus which is McNuggets. Pink Slime is mixture of ground beef and cheap filler with
ammonium hydroxide that used to make a beef meat. The rumour was originally started in
2011, however the rumour viral again in 2014 through social medias. This harm the
reputation of McDonald’s because ammonium hydroxide known to cause stomach and
intestinal cancer. Furthermore, recently, all Malaysian are shocked about the revelation of
import meat cartel that have been repacked in a pack that have a halal logo. This news causes
a public backlash against all supermarkets, restaurants and resellers that sell and use cartel
meat. This causes many people questioning about the meat use in the ingredients of
McDonald’s Malaysia.

In a nutshell, McDonald’s had faced an accusation of labours exploitation. It is actually

coming from one of their labour supply agencies which is Human Connection HR SDN
BHD. The company had accused of mistreating their employees. Human Connection did not
pay their workers regularly and charged the migrant workers to pay additional fees for them
to work at Malaysia. They also took the migrants passport and let them work illegally. This
action of Human Connection HR SDN BHD affecting McDonald’s Malaysia because of
public backlash towards McDonald’s.

McDonald’s solve the confusion and false accusation about their Halal status by updating
their website all of their Halal certificates especially for crucial ingredients likes coffee,
chicken and also their bun. The Halal certificates can be downloaded and analyse by anyone
who needed. McDonald’s also display every information that related with all of their
ingredients in their websites including where did they get their beef and where did they get
their fish supplies. They display every information about their ingredients including the way
they made it and every important policy. They also display their hygiene regulations there, so
customer don’t have to worry about it. All of this information and explanation videos can be
found in the McDonald’s Malaysia Official website. In addition, every McDonald’s in
Malaysia have certified Islamic Affairs Department (JAKIM) Halal logo on the front wall so
customer can easily read it before entering the McDonald’s restaurant.

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Moreover, regarding their pink slime issue, McDonald’s stated that it was a false accusation.
They stated that in an article that their beef patties are made with 100% ground beef that
produced by supplier that have Halal certification by JAKIM and also approved by the
Department of Veterinary Services. This explanation can be found in their news in
McDonald’s Malaysia Official website. As equally important, regarding the Non-Halal meat
cartel issue, McDonald’s publish their official statement that said that their imported meat
cartel supplier not involved in this syndicate. Their imported meat cartel and beef supplier
which is MacFood Services directly from New Zealand and Brazil to Malaysia and besides,
they have the approval form Department of Veterinary Service and have foreign Halal
certification that have been verified by JAKIM.

Finally, regarding the labour exploitation that involved McDonald’s Malaysia, McDonald’s
Malaysia was found not guilty regarding this issue because they already paid to the company
to pay the salaries and provide facilities. Then, McDonalds stated that they had ended the
contract with the Human Connection HR SDN BHD. It is a serious issue that the government
can take action to sued or imprisoned because they violate the law of labour in Malaysia.
McDonald’s taking this seriously as they really concern of their employees.

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Conclusion

In conclusion, McDonald's indeed a very competent and successful company in the fast-food
industry. From a small shop to the largest franchise company with various menus from
different countries. It is such a big achievement and the fact that they can maintain the
franchise and brand for over so many years, such an inspire to most people.

McDonald's have an ambitious and clear vision and mission that they want to be achieved.
With strategic planning that they planned for years, McDonald's may achieve it in the future
with competent crews and managers who are the biggest contributor in the expansion of
McDonald's. On top of that, their employees are well-trained, they are ready for any
circumstances and challenges ahead.

Additionally, McDonald’s have high technology and professional team of Research &
Development (R&D), they managed to create new menus for their customers that suits their
taste bud and menus that been a comfort food for many customers. Besides, during this
pandemic, their self-service kiosk is very useful, as people do not have to do any physical
contact to many people, and the kiosk can be easily sanitized.

Significantly, the management of McDonald’s Corporation in all countries especially

McDonald’s Malaysia are excellent. Everything is well planned, well organized, well lead
and well controlled by the top management. McDonald’s will continue serve their customers
and community the best and will maintain relevance and competitive in the fast-food
industry.

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