McDonald's Corporation: Analysis of Internal or External-Driven Needs for Change

Report for McDonald's Corporation
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Introduction and Description of the Organisation
McDonald's is the selected corporation for the report. It is a United States (U.S.) fast food chain, among the largest globally recognised for its hamburgers (Cassidy et al., 2021). Two brothers, Richard and Maurice McDonald, opened the first restaurant in 1940 in San Bernardino, California. Initially, McDonald’s was a drive-in that provided an extensive variety of items. However, the brothers revamped the business in 1948. A lately envisaged McDonald’s began following a 3-month renovation. The developed restaurant was meant to generate substantial food quantities at reduced costs. For effectiveness, the two narrowed the menu that only included potato chips (currently known as French fries), drinks, pie, and the famous hamburgers to an efficient format called Speedee Service System. The system incorporated a self-service counter that abolished the need for employees to serve customers. Clients could receive food hurriedly since the food offered was prepared earlier, packed, and warmed. These revolutions permitted the founders to charge 15 cents for a hamburger (Mujtaba & Patel, 2007). The firm grew enormously successful as the brothers started a franchise program.
McDonald’s Corporation continued expanding nationally and globally. For instance, a franchise opened in 1967 in Richmond, Canada. This was the American-based McDonald’s first outside site. About 34,000 outlets operated in more than 115 nations and territorial boundaries in the 21st century. Unlike today, the company’s growth was increasingly swift in the 1990s, so people perceived McDonald’s opening anywhere on the planet every 5 hours (Mujtaba & Patel, 2007). The organisation became increasingly a renowned family hotel providing reasonable food that met the customers’ tastes and preferences. However, the current market is flooded with rivals offering similar products, hence stiff competition that potentially limits market share for entities involved. The subsequent section will analyse McDonald’s, establish the urge for it to embrace and accept change, and specify the expected outcome.
Analysis of Internal or External-Driven Needs for Change
Numerous reasons explain why change happens in organisations. External or internal factors are increasingly responsible for triggering specific changes. Company analysts can recognise various change drivers based on the Burke-Litwin model focusing on organisational performance and change. Most importantly, the model indicates several change drivers and categorises them based on merit or relevance. It occurs in a diagrammatical format whereby the significant factors appear at the top of the diagram, whereas the lowest level features the less crucial elements. The theoretical framework assumes that environmental components are increasingly influential due to their capacity to drive change (Spangenberg & Theron, 2013). The external drivers are accountable for most change usually recorded across firms. According to the researchers, the model outlines twelve aspects likely to foster organisational change. Leadership, culture structure, strategy, systems, and processes are the most notable areas of concern that the model highlights. The model ranks these areas highly and recognises them critical organisational change agents. Burke-Litwin model might be a critical tool to analyse the need for urgent change at McDonald’s, a food industry giant.
From McDonald’s perspective, the company has experienced stiff competition in the industry. Particularly, the competition for considerable market share originates from the existing fast-food chains and new food sector entrants. These include the emerging meal kit and food delivery businesses. Such competition has always stimulated diminishing returns or profitability for the prestigious company, creating an inevitable urge for the firm to re-strategise its operations and fit well into the industry. Applying the Burke-Litwin theoretical framework reveals that the need for McDonald’s transformation is mainly determined by its external setting, including rising rivalry from the food market participants, altering client taste and preferences, and technological changes. The corporation’s systems, structure, and processes are primary determinants for the challenges of adapting to the abovementioned changes. Competition and low sales realised over time at the company offer an indication for the management to start preparing an appropriate intervention strategy to re-establish itself and, most importantly, regain its competitive advantage within the market. Therefore, as discussed in the subsequent sections, considering relevant intervention steps is essential to optimise the business’s operations and achieve long-term enhanced outcomes.
The Optimisation Outcome to be achieved.
McDonald’s must apply the Business Process Re-engineering (BPR) approach to gain a properly optimised solution to its competition-driven challenge. Fetais et al. (2022) argue that Michael Hammer’s strategy encompasses reorganising and redeveloping a business’s existing processes to enhance productivity and effectiveness. The crucial rethinking aspect and the reshaping of the business processes help attain important improvements in vital modern performance measures like high-quality products and services, reasonable costs, and processing or manufacturing speed. The radical changes within the organisational processes and methods were important to tolerate the fast-paced technological and market modifications happening. A company might need to apply the BPR approach due to various reasons. For instance, it would be necessary whenever client complaints increase, competition rises steadily, staff turnover becomes high, and cash flow decreases as costs skyrocket. From McDonald’s perspective, optimised outcomes would be possible by reforming the company’s supply chain, shaping its customer services or operations to lessen customer wait times and, most importantly, updating the menu by introducing unique food and ingredients to attract potential customers.
A fast food restaurant’s good performance relies on properly controlling food preparation time, ensuring shorter waiting times and queue lengths. Specifically, cutting customer wait times is essential for most fast food premises, such as McDonald’s, since it is a vital element in enhancing overall customer satisfaction (Koh et al., 2014). McDonald’s should prioritise managing customer service time well to allow the customers to wait in line for shorter periods. The multinational can embrace technological investment likely to control time. For instance, this technology should easily allow the clients to order and get delivered in the comfort of their homes. The technology could also ensure order tracking and allow clients...