MANAGEMENT AND OPERATIONS

Macdonald’s

Student Name
[Email address]
Table of Contents
Introduction......................................................................................................................................1

LO1: Differentiate between the role of a leader and the function of a manager.............................2

Task 1: What is management? Explain and differentiate between contemporary and seminal
theories of management with examples...........................................................................................2

Task 2: Define leader and a manager? What are the key differences in leader and a manager?.....3

Task 3: Define transformational and transactional leadership and list down the key differences in
both of them.....................................................................................................................................5

Task 4: Differentiate and explain hard management skills and soft leadership skills.....................6

LO2: Apply the role of a leader and the function of manager in given contexts............................8

Different situations effect the role of a leader and function of a manager, you are required to
select a scenario for your chosen organization and justify in the following tasks that how this
situation would impact the role of a leader and function of a manager...........................................8

Task 5: Explain situational leadership, systems leadership, task or relationship oriented

approaches and Apply them to the scenario....................................................................................8

Task 6: How would you apply chaos theory and management by objectives to the given
scenario?........................................................................................................................................10

LO3 Demonstrate an appreciation of the role leaders and managers play in the operations
function of an organization............................................................................................................12

Task 7: Demonstrate and explain your understanding about the following theories:..................12

Six sigma,......................................................................................................................................12

lean production..............................................................................................................................12

Queuing theory..............................................................................................................................12

Task 8: Demonstrate your understanding about the following operational management

approaches with help of examples:................................................................................................13

1- Total quality management......................................................................................................13

2- Just in time inventory.............................................................................................................14

3- Concept of continuous improvement (kaizen).......................................................................14

Task 9: Demonstrate and explain the following operational functions:........................................14

1- Transformation of raw material into finished goods..............................................................14

2- Process design........................................................................................................................15

3- Capacity management............................................................................................................16

4- Logistics and inventory management.....................................................................................16

LO4 Demonstrate an understanding of the relationship between leadership................................18

and management in a contemporary business environment..........................................................18

Task 10: Demonstrate and highlight your understanding about the relationship of management
and leadership in the context of the following areas.....................................................................18

1- Corporate social responsibility...............................................................................................18

2- Culture and values..................................................................................................................18

3- Ethics and sustainability.........................................................................................................19

Task 11: Discuss and demonstrate why it is important to have a healthy relationship with
stakeholders and meeting their expectations.................................................................................19

Conclusion.....................................................................................................................................20

References......................................................................................................................................20
Introduction
The report has been prepared in context of the role of managers and leaders in the organization
which helps the company in the improvement of the production efficiency and development of
the high quality products. The report included the functions of managers and the role of leaders
in those functions in order to get the work done from the employees in an efficient manner. The
importance of the theories of management and styles of leadership has been explained in the
context of the operations management of McDonald's.

McDonald's is an American fast food

company, founded in 1940 as a restaurant
operated by Richard and Maurice
McDonald, in San Bernardino, California,
United States. They rechristened their
business as a hamburger stand. The first
time a McDonald's franchise used the
Golden Arches logo was in 1953 at a
location in Phoenix, Arizona. In 1955, Ray
Kroc, a businessman, joined the company as
a franchise agent and proceeded to purchase
the chain from the McDonald brothers.
McDonald's had its original headquarters in
Oak Brook, Illinois, but moved its global headquarters to Chicago in early 2018.

McDonald's is the world's largest restaurant chain by revenue, serving over 69 million customers
daily in over 100 countries across approximately 36,900 outlets as of 2016. Although
McDonald's is known for its hamburgers, they also sell cheeseburgers, chicken products, French
fries, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to changing
consumer tastes and a negative backlash because of the unhealthiness of their food. The
company has added to its menu salads, fish, smoothies, and fruit. The McDonald's Corporation
revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in
company-operated restaurants. According to a BBC report published in 2012, McDonald's is the
world's second-largest private employer (behind Walmart with 1.9 million employees), 1.5
million of whom work for franchises.

LO1: Differentiate between the role of a leader and the

function of a manager.

Task 1: What is management? Explain and differentiate

between contemporary and seminal theories of
management with examples.
Management of Macdonald’s is defined as the act of organizing and coordinating the entire
activities of an organization to achieve its goals, objectives, mission and vision set by the
leadership, within a given span of time. It is ensured that the resources of the organizations are
operate in a very profitable manner and that is achieved by focusing on tangible and in-tangible
resource and their contributions in the productivity and performance of the organization.

The contemporary theory of management is applied by Macdonald’s, to deal with the current
situation of the increased cost of the purchase and production. The managers can plan the
strategies such as selection of suppliers who can provide the raw material at lower cost. The
leaders in Macdonald’s, use their trait to motivate the employees to adopt advance technologies
in order to lower the cost of manufacturing and eliminate the resistance to change among the
employees through creating an environment of trust with the effective communication skills.

Management by objective is the theory which focuses on the combined efforts of the managers
and the employees for the accomplishment of the goals. The managers work with the employees
and set the standards of the performance and the leaders delegate the duties to the employees so
that they are motivated to perform their task best.

Contingency theory focuses the change in the strategies according to the changes in the
situations. The leaders play an important role in which they influence the employees to bring
changes in the operations in order to meet the challenges prevailing in the market. The managers
of Macdonald’s considered the reasons of the increased cost of manufacture and applied the
theory to implement some changes in the operational activities to bring down the high prices of
the materials and equipment received from the suppliers and according they changed the policies
of the company in production and operation department.

Task 2: Define leader and a manager? What are the key

differences in leader and a manager?
A managerial culture emphasizes rationality and control. Whether his or her energies are directed
toward goals, resources, organization structures, or people, a manager is a problem solver. The
manager asks: “What problems have to be solved, and what are the best ways to achieve results
so that people will continue to contribute to this organization?” From this perspective, leadership
is simply a practical effort to direct affairs; and to fulfill his or her task, a manager requires that
many people operate efficiently at different levels of status and responsibility. It takes neither
genius nor heroism to be a manager, but rather persistence, tough-mindedness, hard work,
intelligence, analytical ability, and perhaps most important, tolerance and goodwill.

Another conception of leadership, however, attaches almost mystical beliefs to what a leader is
and assumes that only great people are worthy of the drama of power and politics. Here
leadership is a psychodrama in which a brilliant, lonely person must gain control of himself or
herself as a precondition for controlling others. Such an expectation of leadership contrasts
sharply with the mundane, practical, and yet important conception that leadership is really
managing work that other people do.

Following are the key differences of leaders and managers at Macdonald’s

1. Leaders create a vision, managers create goals.

Leaders paint a picture of what they see as possible and inspire and engage their people in
turning that vision into reality. They think beyond what individuals do. They activate people to
be part of something bigger. They know that high-functioning teams can accomplish a lot more
working together than individuals working autonomously. Managers focus on setting, measuring
and achieving goals. They control situations to reach or exceed their objectives.

2. Leaders are change agents, managers maintain the status quo.

Leaders are proud disrupters. Innovation is their mantra. They embrace change and know that
even if things are working, there could be a better way forward. And they understand and accept
the fact that changes to the system often create waves. Managers stick with what works, refining
systems, structures and processes to make them better.

3. Leaders are unique, manager’s copy.

Leaders are willing to be themselves. They are self-aware and work actively to build their unique
and differentiated personal brand. They are comfortable in their own shoes and willing to stand
out. They’re authentic and transparent. Managers mimic the competencies and behaviors they
learn from others and adopt their leadership style rather than defining it.

4. Leaders take risks, managers control risk.

Leaders are willing to try new things even if they may fail miserably. They know that failure is
often a step on the path to success. Managers work to minimize risk. They seek to avoid or
control problems rather than embracing them.

5. Leaders are in it for the long haul, managers think short-term.

Leaders have intentionality. They do what they say they are going to do and stay motivated
toward a big, often very distant goal. They remain motivated without receiving regular rewards.
Managers work on shorter-term goals, seeking more regular acknowledgment or accolades.

6. Leaders grow personally, managers rely on existing, proven skills.

Leaders know if they aren’t learning something new every day, they aren’t standing still, they’re
falling behind. They remain curious and seek to remain relevant in an ever-changing world of
work. They seek out people and information that will expand their thinking. Managers often
double down on what made them successful, perfecting existing skills and adopting proven
behaviors.

7. Leaders build relationships, managers build systems and processes.

Leaders focus on people – all the stakeholders they need to influence in order to realize their
vision. They know who their stakeholders are and spend most of their time with them. They
build loyalty and trust by consistently delivering on their promise. Managers focus on the
structures necessary to set and achieve goals. They focus on the analytical and ensure systems
are in place to attain desired outcomes. They work with individuals and their goals and
objectives.

8. Leaders coach, managers direct.

Leaders know that people who work for them have the answers or are able to find them. They
see their people as competent and are optimistic about their potential. They resist the temptation
to tell their people what to do and how to do it. Managers assign tasks and provide guidance on
how to accomplish them.

9. Leaders create fans, managers have employees.

Leaders have people who go beyond following them; their followers become their raving fans
and fervent promoters – helping them build their brand and achieve their goals. Their fans help
them increase their visibility and credibility. Managers have staff who follow directions and seek
to please the boss.

Task 3: Define transformational and transactional

leadership and list down the key differences in both of
them.

Transactional Leadership in Macdonald’s- This theory of leadership is based on a system of

reward and punishment that are contingent upon the performances of the followers. Generally the
leader is task and outcome oriented in nature. This theory of leadership is applied to those
organizations who are only concerned with the performance of their employees. The
transactional theory of leadership promotes equality in MacDonald’s as the rules and regulations
remains the same for every employee in the organization and is not affected by the experience
level of the employees. It helps in promoting a concept to the employee that every individual is
bound to get rewarded upon completing the work effectively and smoothly and every individual
is bound to get the punishment in case of failing to perform in a task. The transactional theory of
leadership is followed by majority of the manufacturing companies in the world who aims to
motivate their employees through rewards such as incentives.
Transformational leadership at MacDonald’s- In this leadership theory the leaders are able to
motivate others through their works and examples and as a result the employee gets boosted up
due to the change in mind set and eventually the productivity of the organizations increases. The
four components of transformational leadership are Intellectual stimulation, consideration for
individuals. Inspirational motivation and idealized influence.

This theory of leadership is applied to those situation where the subordinates look to their
managers as supervisors as their greatest motivator and mentor. The vest example of an
organization following transformational leadership is the Australian company Thank You where
the employees of the organization have underwent a transformation in their approach due to the
transformational leadership quality of their co-founder Daniel Flynn.(Dinh, Lord, Gardner,
Meuser Liden, and Hu 2014.)

Task 4: Differentiate and explain hard management skills

and soft leadership skills.
The Hard management skills consist of certain parameters with in Macdonald’s which are
described as follows:

 Domain Functional Knowledge- A domain functional knowledge is important in hard

management skills as without proper domain function the manager will not be able to
convey the employees of the organizations about the motives and requirements of the
task.
 Organizational structural knowledge- A manager should have a proper knowledge of the
organizational structure and the organizational structure in order to make his decisions
more systematic in nature.
 Learning agility- This is one of the most must heaver skill for a leadership as he should
be always keen on learning from the past instances or past experiences so that he does not
repeat the same mistake.
 Resiliency- This is a must have skill for every skill as he should learn from his past
mistakes and bounce back from adversities to success by not having the courage to accept
his past mistake and not repeating it.
  Emotional intelligence- This is very important from an organization’s point
of view as it helps in understanding the needs and demands of the employees of the
organization and also of that of the market.
 Building relations at all levels- This is very important to form an organizational hierarchy
in the organization where all the individuals in the organizations will be aware of their
roles and responsibilities within the organization.
 Planning Knowledge- A manager must poses a proper knowledge of the planning he is
about to make and implement towards the company or towards the employees. The aim
and purpose of the planning must be clear to him and to the organization.
 Customer knowledge- A manager of Macdonald’s must possess a hard management skill
regarding knowledge of customers as without proper customer knowledge the company
will not be able to define their potential customers and design products for them.
 Performance measurement- This is a very important skill that a manager must possess as
without measuring the performance of the employees regarding a task he would not be
able to evaluate their output or increase their productivity.

The soft leadership skills consist of certain parameters which are discussed below:

 Self-awareness- A leader in Macdonald’s must be self-aware in nature which means that

that he should be well aware of the strengths and weaknesses of the company so that it
becomes easy to take decisions accordingly. The strength of self-awareness is that it helps
a person to understand other people clearly and its weakness it is limited to the outside
behavior of the person.
 Learning agility- This is one of the most must have skill for a leadership as he should be
always keen on learning from the past instances or past experiences so that he does not
repeat the same mistake.
 Resiliency- This is a must have skill for every skill as he should learn from his past
mistakes and bounce back from adversities to success by not having the courage to accept
his past mistake and not repeating it.
 Emotional intelligence- This is very important from an organization’s point
of view as it helps in understanding the needs and demands of the employees of the
organization and also of that of the market.
 Building relations at all levels- This is very important to form an organizational hierarchy
in the organization where all the individuals in the organizations will be aware of their
roles and responsibilities within the organization.
LO2: Apply the role of a leader and the function of
manager in given contexts.

Different situations effect the role of a leader and

function of a manager, you are required to select a
scenario for your chosen organization and justify in the
following tasks that how this situation would impact the
role of a leader and function of a manager.

Task 5: Explain situational leadership, systems

leadership, task or relationship oriented approaches and
apply them to the scenario.
Situational Leadership; The situational leadership model was first developed by Paul Hersey
and Ken Blanchard (late
1970’s) which states that
manager or an organization
adopts various leadership
styles according to the
situations they face from
time to time rather than
following a particular
leadership model. As the
situation that comes in front
of an organization differs
from time to time therefore
the leadership style that
should be applied in those
situations depends upon the
requirement of the solution. The situational leadership model consists of two factors namely
directive behavior and supportive behavior on both the axis depending on its rate which is high
and low. Together they form the fourth quadrants and the figure is depicted under:

This model helps the Macdonald’s to get adapted to various situations in the business
organization and improves the decision making system of both the managers and the employees
which helps in the growth of the organization and it also helps in developing co-ordination and
effective communication between the top management and the bottom management to ensure the
sustainable growth of the organization

System Leadership

Systems leadership approach in MacDonald’s is defined as the leadership across organizational

and geo political boundaries, beyond individual professional discipline, within a range of
organizational and stakeholder cultures, and often without managerial control. The system
leadership when applied in the organization will help the leader of the company to not only think
about their own perspective or their organizational but it will look into a broader approach
crossing even geo political borders to develop the organization as well as the stakeholders in
order to change the system and structure of the organizational processes. Upon applying the
system leadership model the organizational will benefit in getting a leader who has a long term
vision for the organization and whose strategies and procedures will help the organization in to
gaining new limits which are itself unique in nature and it will be very difficult for other
organizations to achieve the limit which will help in the sustainable growth of the company.

This theory of leadership helps in promoting creativity and innovation in the MacDonald’s and
always encourages the employees to think differently while approaching a particular task and the
systems leadership theory also focuses on the welfare of the organization not only the employees
in order to facilitate the growth and development of the organization. The application of the
system leadership approach improves growth and development in the organization as it helps in
imparting the vision of the leader in the employees which promotes the creativity and innovation
of the employees of the organization and which turns paves the way for more growth and
development in the organization and it also paves the way for sustainable development in the
organization as due to the far sighted vision of the leaders the organization accordingly plan their
resources and utilize it in a proper manner and reduces the misuse of resources which leads to
sustainable development.

Task 6: How would you apply chaos theory and

management by objectives to the given scenario?
The chaos theory from the management point of view states that at certain points of time the
markets undergo certain changes and disturbances which can be related to global economic
slowdown or change in customer changes or recession in the market. It states that the
organization must be capable enough to adapt to the changes as quickly as possible to prevent
losses arising from these situations which are termed as “chaos”.

From Macdonald’s point of view it must be prepared and accustomed to respond to the chaos
arising in the market at several point of time and should soon get adapted to the new situation.
Macdonald’s must get adapted to the situation by changing their objective, goals and strategy or
by investing more or by deploying more staff according to the nature of the chaos that occurred
in the market. If the organization experiences certain change in the preference pattern and
demand pattern of the customers then it should accordingly get adapted to it by designing new
products according to the demands of the individual or by modifying the existing product and
present to the customer as a new alternative product in order to remain in the market limelight.
By applying this theory, an organization will benefit by developing an adaptability skill for their
employees who will help them to become more effective and efficient to tackle any given
situation with ease without panicking about the situation. In other organizations it is seen that
when a chaos situation arises the employees tend to get wayward in their nature and they cannot
decide what to do next and therefore the quality of the work gets compromised and therefore it
acts as a barrier in the growth of the organization whereas if Macdonald’s adopts chaos theory
then the employees will be self-trained and self-motivated to handle any kind of situations they
are in which helps to carry out the task effectively and achieve sustainable growth. The role that
the management plays according to the theory is that it helps in the identification of the chaos in
the business environment of the organization and provides training and development accordingly
to the employees in order to handle the situations. In order to train the employees of their
organization for various adverse conditions in the market the organization conducts a market
research in order to get a proper idea of the future market trends and the future market adversities
rather than simply forecasting it so that it can train their employees accordingly to control the
adverse situations and to ensure productivity in their tasks and therefore the management plays a
great role in this theory by identifying the future market adversities and to train their employees
according to that so that they do not get de-motivated in their approach.

Management by objectives

Management by objective model of management is a model which aims to improve the

performance and productivity of the organization by clearing defining the objectives which are
agreed both by the employees and the management. From an organization’s point of view it is
very important that the management and the employee together create and define the objectives
of the organization of the organizations that they will work on to achieve. The objectives must be
defined in such a way that it complies with the resources of the organization. (Day, Fleenor,
Atwater, Sturm and McKee 2014.) In the work environment if the objective of the Macdonald’s
is to increase the existing shares of the product then it should communicate the same to the
employees and manage the objective by arranging resources so as to improve the market share of
the product. By applying this model the organization will be able to carry out their tasks and
objectives in a more systematic process as the employees are fully aware of their own roles and
responsibilities while achieving an objective which helps them
LO3 Demonstrate an appreciation of the role leaders and
managers play in the operations function of an
organization.

Task 7: Demonstrate and explain your understanding

about the following theories:

Six sigma,
For a large corporation like McDonald’s, quality management is one of the biggest driving forces
behind its success.

There is nothing arbitrary about the Six Sigma practice and the business of McDonald’s. When
specifications are created at McDonald’s, it is because it is important to what the customer wants
and requires. And the results prove that every day, 64 million people in 118 countries visit a
McDonald’s.

Lean production
Lean production system is the western term for Toyota Production System. Lean operations and
just-in-time planning and control aim to meet demand right away, with perfect quality and no
waste. Lean operation means waste elimination in order to create operation that is faster, more
dependable and that produces high quality products and also operates at low costs (Slack et al
2004 p. 518, 519).

There are two major pillars of lean production system. One is Just-in-Time system and other is
Kaizen.

Queuing theory.
Queuing theory is defined as the mathematical study of waiting lines in which a model is
constructed so that the queue lengths and the waiting lines can be predicted. The application of
the queuing theory in the operations management of Macdonald’s will help Macdonald’s in
solving the problems which are based on the scientific understanding of the problems and
solving them in an optimal manner and it also help the organization by recommending the arrival
of the customers whose products are to be serviced, setting up of the work stations and
recommending the requirement of manpower. The queuing theory is mostly practiced in the agro
industrial sector, construction sector and in various supply sector such as tobacco supply sector.

Role of leaders in Queuing theory:

 To identify delay in queuing lines.

 To identify the cause of the delay in queuing lines.
 To identify the processes involved in delaying.

Role of managers in Queuing theory:

 To supervise the entire process.

 To guide the employees in order to reduce queuing delays.

Task 8: Demonstrate your understanding about the

following operational management approaches with help
of examples:

1- Total quality management

Total Quality Management is a philosophy of how to approach the organization of quality
improvement. This approach puts quality at the heart of everything that is done by an operation
and including all the activities within the operation (Slack et al, 2004, p. 722).

Feigenbaum defined TQM as; "An effective system for integrating the quality development,
quality maintenance and quality improvement efforts of the various groups in an organization, so
as to enable production and service at the most economical levels which allow for full customer
satisfaction"(Cited in Slack et al, 2004, p.720).

McDonald's goal is simple: to give customers high quality products anywhere in the world and
maintain high standards of service. Every member of the organization must be involved from the
highest executive to the crewmembers of McDonalds. The commitment to quality must be
instilled into everyone from the moment they join McDonalds in every dimension of the
organization, e.g. Operation, Finance, Marketing, Human Resources, Health and Safety and Food
Safety

2- Just in time inventory.

McDonalds has made billions of hamburgers using elements of just-in-time, from the time of
order from the customers to the payment from them; the burgers or the meals are ready to be
consumed. If they are later than the time ordered, customers will be dissatisfied. So it is
important for McDonalds to use the JIT process in order to keep quality and satisfied customers.

Just-in-time means producing goods and services exactly when they are needed. The major
benefit of using just-in-time system for McDonald's are good quality food at a lower cost and
also better quality customer service. This higher quality customer service is the ability to actually
produce faster. Without this ability, McDonald's ordering costs would be higher because the
costs associated with ordering would be the loss of customers tired of ordering fast food that
really isn't fast (Atkinson 2005).

3- Concept of continuous improvement (kaizen)

Kaizen is a Japanese term for continuous improvement involving everyone - managers and
workers alike. Kanban is a Japanese term for card or signal, it controls the transfer of materials
between the stages of operation. (Slack et al, 2004 p. 533, 653)

McDonald's use lean production system and minimize waste by accurate stock management and
by developing correct demand forecasts so that products do not have to be discarded.

McDonald's is an example of a JIT system, they doesn't begin to cook its orders until a customer
has placed an order. McDonald's is able to make their products fast enough thanks to technology
they use, eg. bun toaster. The Company provide fast service and at the same time the finished
products are not placed in inventory for long time.
Task 9: Demonstrate and explain the following
operational functions:

1- Transformation of raw material into finished goods

Raw materials include the buns, beef patties, paper cups, salad ingredients and packaging are
delivered to the restaurants between 3 and 5 times a week. At any time, a restaurant will have a
range of products ready for sale, for example Big Macs, fish and side salads.

At McDonald's, all raw materials, work-in-progress and finished products are handled on a First
In, First out (FIFO) basis. This means raw materials are used in the order they are received.
Therefore stock is always fresh because products are sold in the order they are made.

2- Process design
Process design is the process by which some functional requirements of people are satisfied
through the shaping or configuration of the resources and/or activities that comprise a product, or
a service, or the transformation process that produces those (Slack et al 2004, p.94).

The process should be designed to deliver the products in the best possible way. Before design
the process every manager should ask some questions, e.g. what process should give to
customers? How much flexibility do customers want? How much will they pay for the products?
(Waters 1999, p. 65).

Each restaurant is headed by a Restaurant manager who is responsible for the daily operation and
customer interaction. The crew members carry out the basic operation at the restaurant and
ensure the customer satisfaction.

The Process at McDonalds starts with the customer order and then after receiving the order, the
design must be completed and delivered. With this operations process, McDonald's aims to be
able to deliver a reasonable product within reasonable time. The nature of the work is to provide
customers ordered products within few minutes.

The order placed by the customer is taken by one of the crew members operating at the tills, as
the order is entered into till, a message is passed on to the appropriate crew member in the
kitchen for the preparation of the order.
In food preparation McDonalds have their own strategy and standards; the Crew members cook
burgers on a grill that heat both sides of the burger in a little less than four minute where the
Patties are "batch cooked" in advance. The hamburger buns toaster time is slightly less than one
minute to give it a brown texture and slightly crusty, the assembling of hamburger is done by
laying out the toasted bottom, spread mayonnaise, add grilled beef, on top lettuce and onions
close it with the toasted top and is wrapped and placed into the Universal cabinet ready to be sold
to customers. Finally the customer is asked for the mode of payment to complete the transaction.

The process flow in McDonald's:

Customer order Toast bread product Cook frozen products → Place product in packaging → Add
ingredients → Holding Cabinet (Wrapped burgers are kept max 10min) → Delivery to the
Customer

Having a well-planned process design, McDonalds is able to produce and service including
customer's specification maintaining their quality, reduce the customer waiting time at the
counters. They have dependable crew members and resource for on-time delivery of products
and service. The flexibility is achieved by processing a wide variety of products and changing
the cost of the items and lowers their processing costs by eliminating waste in terms of preparing
the burgers in bulk.

3- Capacity management
In 2004, McDonald's introduced a specialist central stock management function known as the
Restaurant Supply Planning Department. This team communicates with restaurant managers on a
regular basis to find out about local events. The team builds these factors into the new planning
and forecasting system - called Manugistics - to forecast likely demand of finished menu items,
for example Big Macs.

McDonald’s process and capacity design is centered on efficiency for cost-minimization that
supports the company’s strategies. This strategic decision area of operations management
focuses on maintaining process efficiency and adequate capacity to fulfill market demand. At
McDonald’s, the production line method maximizes efficiency and capacity utilization.
4- Logistics and inventory management
Supply chain management is the management of the interconnection of organizations that relate
to each other through upstream and downstream linkages between the different processes that
produce value in the form of products and services to the final consumer (Slack et al, 2004, p.
445).

Supply chain management is concerned with managing the flow of materials and information
between the operations, which form the strands 'chains' of a supply network. (Slack et al, 2004,
p. 444).

McDonalds ensures its suppliers follow the exact standards of quality, value and cleanliness set
by them. When it comes to tracing the products ingredients, great emphasis is placed, so
McDonalds are able to control every link in the supply chain.

Wherever possible, McDonalds tries to use suppliers who are based in the UK, as they prefer
them, but saying this, they still have to meet McDonald's exact product and hygiene standards.

All of their European sold beef is supplied from Europe and the great majority of their British
sold beef is sourced from Britain. McDonald's has developed a 'supplier quality index' (SQI) by
which all suppliers are measured. It allows the company to monitor performance of suppliers
across the many agricultural and non-agricultural products and services purchased (Food Chain
Centre, 2003).

In 2004, McDonald's introduced a specialist central stock management function known as the
Restaurant Supply Planning Department. This team communicates with restaurant managers on a
regular basis to find out about local events. The team builds these factors into the new planning
and forecasting system - called Manugistics - to forecast likely demand of finished menu items,
for example Big Macs.
LO4 Demonstrate an understanding of the relationship
between leadership and management in a contemporary
business environment

Task 10: Demonstrate and highlight your understanding

about the relationship of management and leadership in
the context of the following areas.

1- Corporate social responsibility

Since its foundation, Macdonald’s has continuously strived to contribute to the sustainable
development of society through the manufacture and provision of innovative and quality
products and services that lead the times.

Always bearing this in mind, we listen carefully to our customers and the local community as we
pursue a business that works towards harmony with people, society, and the global environment,
as well as the realization of a sustainable society through manufacturing. Macdonald leadership
and management is playing important role in society by funding schools and special educational
centers.

2- Culture and values

The leadership style established by the founder or top management of Macdonald’s is
transmitted to the company's managers, and as the company grows, it typically attracts new
managers and employees who share the same values. Thus, a company's culture becomes more
and more distinct as its members become more similar. The virtue of these shared values and
common culture is that it increases integration and improves coordination among organizational
members. For example, the common language that typically emerges in an organization because
people share the same beliefs and values facilitates cooperation among managers.
3- Ethics and sustainability
Macdonald’s wants to do good to the society as it carries out its business activities, Toyota
considers improving corporate assessment will not only be of advantage to its shareholders, but
this will as well guide the way to more trust and acceptance of the company in the long term.
Macdonald’s leadership and management believes that the balanced pursuit of the priorities of
efficiency, sustainability and ethics over the medium to long term will enable the achievement of
steady and sustainable growth as well as increase corporate value. They want to grow by
improving their technology and supply as well as getting new investments.

Task 11: Discuss and demonstrate why it is important to

have a healthy relationship with stakeholders and
meeting their expectations.
A person or groups that have interest in the firm and influence decisions of organization are
known as stakeholders. MacDonald’s have certain internal and external stakeholders

Although it is usually thought that a MacDonald’s only concern should be the bottom line of its
shareholders, stakeholders also have the potential to make or break a project. A stakeholder is a
group or individual that can affect or is affected by the organization, such as customers,
suppliers, employees, and local communities. Stakeholder management is concerned with the fit
between the values of the firm and the expectations of the stakeholders, particularly when they
determine the ability of the firm to achieve its objectives.

There are two commonly held views on the importance of stakeholder management. In the
strategic stakeholder management model, managerial concern for a given stakeholder group is
proportional to the perceived ability of such group to impact financial performance. In intrinsic
stakeholder commitment model, MacDonald’s is viewed as having a moral duty to their
stakeholders, claiming that the real benefits from stakeholder management can only come from a
genuine commitment to ethical principles.

Identification of stakeholders and evaluation of their potential to affect the project are key for the
stakeholder management process. Stakeholders with high potential for affecting or collaborating
with the project should be actively involved, while monitoring may be sufficient for those with
low potential.

The benefits from communicating with and managing some stakeholder categories is well
understood. For example, identification and satisfaction of the needs of the users will lead to
more sales of MacDonald’s, while commitment to the well-being of employees has the potential
for improving productivity and work commitment, reducing turnover and absenteeism.

The business environment is complex and changing, and if stakeholders are not carefully
managed they can cause unexpected problems. Stakeholder management may reduce the risk of
poor communication, unfavorable press or negative public reactions. As stakeholder
management involves identification and monitoring of groups affected by the project, risks and
unexpected negative developments can be detected before they become problematic.

Conclusion
This report evaluates the role that operations management play in the daily activities of the
Macdonald’s starting from production process right up to the delivery process. The leaders and
managers of an organization follow a variety of principles and approaches to increase the
efficiency of the operations management in their organization in order to increase the
effectiveness and the efficiencies of the organization. This report notes that every organization
has to undertake the Corporate Social Responsibility in order to protect the culture, ethics and
environment in a sustainable manner, to become ethical in nature and also consider the impact on
wider community thus grabbing the attention of the customers by doing ethical business
practices.
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