Fucntions Of Management

Introduction

One would be amazed to hear that 48 million customers are served everyday in 119 countries at a McDonald's and as of 2004 there were 31,561 system-wide restaurants (2005 fact sheet). Being enrolled in a management course, one automatically begins to think about how many managers there must be in place to manage all those locations. Though McDonald's is a franchise and all restaurants are individually owned, the four functions of management are still important factors which enable the operation of a store to be successful. In this paper we will discuss how globalization, technology, and diversity impact the four functions of management which are: planning, organizing, leading, and controlling (Bateman et al, 2004).

Globalization

Globalization is a process of interaction and integration among the people, companies, and governments of different nations. It is a process driven by international trade and investment and aided by international technology. This process has its effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world (Center for Strategic International Studies, 2002).

McDonald's Corporation is a leading food service retailer and worldwide, McDonald's owns a large segment of the restaurant business. McDonald's manages its system by geographical segments. The largest in terms of both revenue and restaurants is McDonald's USA. In the United States (U.S.), McDonald's has over 12,300 traditional restaurants, plus approximately 1320 satellite locations in facilities like hospitals. They serve more than 21.8 million customers a day. Approximately 85.5 percent of the restaurants are operated, under franchise agreements, by local independent business people, Owners/Operators (www.mcdonalds.com, Flakes, B. personal communication).

Within the controlling function of management, McDonald's introduced the Restaurant Improvement Operations Process (RIOP) in 2002 to evaluate the how effectively the restaurants are meeting quality standards. McDonald's also established a global program that ensures compliance with the guiding principles of the company. Under the procedures of McDonald's, each company that does not pass an audit will be given 30 days to remedy that problem.

Under the planning, leading, and organizing functions of management, McDonald's works with their suppliers to help them develop their own systems of accountability so that those suppliers can identify and address problems on an ongoing basis. This system will ensure that those suppliers are kept in compliance with the Code of Conduct of the entire spectrum within McDonalds' diverse market. Gloria Santona stated,

We bring a lot to each area. We create entrepreneurial opportunities for our local partners, owners-operators, and suppliers. The employment opportunities we create extend from restaurant workers to the agricultural industry and those who work in food processing plants. In our restaurants, we teach the skill sets needed to be good employees and supervisors to encourage success and advancement (The Metropolitan Corporate Counsel, Inc., 2004)

Technology

When a strategy does not work, it is more likely because of poor thinking not because of faulty execution. Most organizations quickly learn that creating strategy in a vacuum, or entrusting strategy-making to thinkers outside the organization, is a critical mistake. It is far better to ask people within the organization what they think. By so doing, today's leaders and managers stimulate innovation and generate the multiplier effect. These are by far the most-value-adding activities that those leaders and managers can perform (Beaudan, 2001).

In 2003, McDonald's on East 42nd Street in Manhattan offered free internet access with the purchase of a value meal. This wireless trial project was discontinued last year because the dining room was too busy and did not seem to be working properly for casual web browsing. In fact, "No Loitering" signs posted around the second floor encouraged guests to eat and leave as soon as possible. There was barely enough elbow room to wrap ones hands around their food, let alone table space to spread out with a laptop. In addition, the access point did not work correctly which did not help the customer. When the network seemed to be active, the access point was not issuing the Internet Protocol Addresses needed to access the web. The baseline tech support of Cometa Networks confirmed that the access point was not working and a Cometa customer service representative said they would pass the report to a service representative with asking call back number of customer (Gallagher, 2003).

McDonald's technology experiments over the past few years have been lower key. In 2000, McDonald's initiated a number of wireless payment systems. This system was based on Radio-Frequency Identification (RFID) technology. This trial ended without fanfare. In January 2002, McDonald's also initiated a fingerprint-based payment system. With this technology, customers gave their credit or debit card information and had their fingerprints scanned. Now, when customer wants to make a purchase, they have to press their thumbs against the print scanner at a register to complete the transaction. However, this program ended after a few months because customers did not like being fingerprinted by McDonald's. In short, for years the company has attempted a variety of technological investments with mixed results (Gallagher, 2003).

Diversity

Planning according to Bateman, is specifying the goals to be achieved and deciding in advance the appropriate actions needed to achieve those goals (Bateman 2004). McDonald's is a company that maintains diversity among corporate employees. The company ensures diversity among its corporate employees by including diversity in their business planning process. Pat Harris is the chief diversity officer for the McDonald's corporation and according to Harris, "the company treats diversity as an initiative rather than a program," and she explains that diversity planning is naturally incorporated into their business plan (Harris, 2005). The evolution of the McDonald's Corporation toward diversity as a business objective began in the late 1970's when the corporation officially established an Affirmative Action Department which is now known as the Diversity Initiative Department. McDonald's has put effort in initiating diversity in their organization by conducting internal education and career development seminars focusing on diversity issues

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