Discussion
Leadership skill is a major factor for influence working personnel so that they can willingly, efficiently and competently accomplish their organizational goals (Tannenbaum et al. 2013). Choudhary et al. (2013) moreover stated that effective leadership allows developing the workplace by overcoming three challenges- provision of a shared vision, setting objectives and providing strategic direction to develop effective strategies. The organization that is taken into consideration is Mc Donald’s, which is one of the largest fast food restaurant chains in the United States with annual revenue of $25.41 billion for the year 2015 (See Appendix, Figure 1) (Statista 2017). However, it can be noted that over the last nine fiscal years, the highest revenue attained was in the year 2013 at $28.11 billion (Statista 2017). Thus, the reason for achieving low revenues in the next years is due to poor leadership and several challenges that the company faces.
In this assessment, the link between the leadership and organizational culture will be illustrated along with the evaluation of the core characteristics and competencies within the workplace, prevailing culture in the organization and the impact of these competencies on the leaders and followers. Moreover, leadership behaviours followed at Mc Donald’s with reference to the organization’s mission, vision and strategic plan will also be illustrated. Lastly, recommendation for improving the leadership strategies will also be provided.
Tannenbaum et al. (2013) depict that in order to gain a sustainable advantage over competitors and market, an organization needs to consider two of the most crucial organizational elements- leadership and organizational culture. Watkins (2013) also explains that organizational culture signifies a set of beliefs that an organization follow since its initial periods and an effective leader must influence and encourage their subordinates or followers to trail those beliefs in order to attain the organizational goals. On the other hand, it is also evident that leader has to adjust their leadership style according to the organization’s culture. Thus, there is a link between leadership and organizational culture (Alvesson and Sveningsson 2015).
In recent times, the concerned organization is facing challenges for pricing, the absence of new products, millennials’ unfulfilled demands of healthier, sustainable and cheap food and lastly, poor new ideas that were declared “terrifying” (DiChristopher 2017. ). Nica (2013) highlighted that Mc Donald’s provide fast food that is best in taste and have huge public demand among millennials. However, these generation group prefers to have customized option, health and sustainable food within an affordable price range. However, their customized programs like ‘make-your-own burgers program’ is expensive as a result, Mc Donald’s loses their position as a top choice among millennials. In addition to that, lack of innovation and new products in their menu also lead to an unsuccessful result. Welford (2016) highlighted that Mc Donald’s introduces products like “fish nuggets”, “habanero Quarter Pounders” and “Chicken wings” that was a flop ideas. It is also highlighted that there last successful new menu was “bona fide blockbuster”. New changes like ‘Happy Meal mascot’ and ‘changed look of the Ronald McDonald’ is also hated by the community (See Appendix, Image 2 and 3) (McDonald’s UK 2017). Lastly, one of the most disruptive adversities that Mc Donald’s is facing is scandals on food safety in China.
Challenges Faced by McDonald’s
Thus, it is clearly evident from the above image that after the downfall in 2002, there was a continuous rise in annual revenue till 2013 (Beaman 2015). In the year 2014, faces several business challenges that result in a downfall in the profitability of Mc Donald’s. The first problem is the loss of the customer base due to their poor pricing strategy. Ingraham (2014) also highlight that Mc Donald’s also have a bad reputation for paying poorly to their staffs. That signifies a less motivate workplace environment for the employee. Moreover, selection of poor food and meat quality led the organization to suffer from food safety scandal (Xin 2015.). Thus, it can be said that there is a gap of poor decision making in the administration regarding the employee motivation and market research for assessing the demands of the consumers.
Lazaroiu (2015) explains that leadership signifies a process for motivating people to complete their roles and responsibility together to attain the business goals. Moreover, they also guide them to fulfill their job responsibility. They also make their employees efficient enough so that every employee can possess some sort of leadership skills for helping new employees at Mc Donald’s. However, Ruetschlin (2014) argues that in the workplace of the Mc Donald’s, they have five CEO in the interval of 10 years and the food served by them is not considered as healthy fast food alternative. This rapid change in the managing authorities leads to a random change in the organizational functions that makes the employees follow those changes every time (Glockner 2016). This not only hampers the employee’s performance but also slows down the business operations. Moreover, as a part of the arguments, it is also depicted by Ruetschlin (2014) that provision of many food options and money results in slow business operations and hence, they are facing a dilemma for effective brand confusion.
Moreover, the managing authorities of Mc Donald’s portray that they follow effective measures to make every employee a great employee- recognising different motivations and goals of every department. Kim and Scullion (2013) explains that by the term ‘different motivation’, it is referred that same motivation motivates not all employee and hence different department need different motivating factors to work being their competencies. Additionally, in the context of ‘motivations and goals of every department’, Gerhart and Fang (2015) signifies that every store has some goals like maximises the total number employed visit their shop or increase the sale of food packages sold to their companies. Glockner (2016) here portrays that Mc Donald’s visions to be the best quick service restaurant that can satisfy customer’s need and their mission are to be the customers’ favourite place.
Evaluation of Core Competencies and Characteristics
However, Omar et al. (2015) argue that with the gaps in the leadership skills in the managing authorities, Mc Donald’s faces problem in attaining their desired mission and vision. This results in a poor impact on managers as well as employees. Poor leadership and business decision led leaders to direct the subordinates poorly; as a result, subordinate feel like a failure in spite of their hard work. Pradhan and Pradhan (2014) in this context explains that, if employees do not feel motivated to work, they cannot promote their brand to customers and make them come to visit them again. Thus, poor leadership results in the adversities like disrespect, conflicts and anger. The basic things through which the employee feel motivated is money and Mc Donald’s pay their employee less for their effort. As a result, employees protests against the management and the CEO at that time- Donald Thomson to cut their wages for poor performance of the organization (Beamann 2015). It is also depicted by Xin (2015) that in the fast food industry the different in the average employee’s salary and that of the CEO is the widest. This breaches the principle of equality within the organization that results in less motivated employees.
Proper training programs for the employee are not present in the workplace due to which the employee’s skills are not updated. Moreover, the hierarchical management system is followed in this concerned organization as a result; the direct communication among the managers and the employees is absent. This leads to lack of participation in the managerial decision for the average employee. Ingraham (2014) defines that employees are the one, who directly communicates with the customers and know their desires of new products and facilities. Thus, it is important for managers to include them in the decision making programs so that effective products and facilities can be provided to their customers that on the other hand enhances their customer base. In consequence, it can be said that an organization that apply all these aspects, can fulfill their business goals and objectives by making every stakeholder happy.
One of the most effective aspects that every organization should implement is to introduce motivation factor within the working environment. Two motivation models that can be implemented are the Herzberg’s Motivation Theory model and Equity Theory of Motivation model. According to the Herzberg’s Motivation Theory, managing authorities of the Mc Donald’s offer them factors of Motivators and Hygiene aspects that cause job satisfaction and avoid the factors that create dissatisfaction in the workplace respectively. The leaders of the organization should provide high hygiene and high motivation factors to the employees in order to formulate an ideal situation where employees are highly motivated and have fewer complaints. Thus, for making employees more motivated extra non-financial facilities like medical allowances, travel allowances and job recognition should be provided. Moreover, every employee should get job security and fixed incentive for every year of their employment so that they can get motivation for performing their job responsibilities. Moreover, managers should also focus on providing other facilities like the flexible working environment and work-life balance that result in highly motivated employees.
Assessment of Prevailing Culture
Moreover, experts believe that there is no fixed rule of leadership in the organization. Mc Donald’s should adopt contemporary theories like situational leadership and equity theory along with the contemporary motivation theory of Herzberg’s Motivation Theory. As per as the requirement of the situational leadership theory, the managers have to adopt business decisions that comply with the modern demand of the customers. In context, with the Mc Donald’s, the managing authority should improve their product quality at a competitive price with that of the competitors like Burger King. This pricing strategy will improve their brand recognition and attract more customers and millennials towards their products. Moreover, equality in the managerial hierarchy make the employee more satisfied and serve their best for the betterment of the organization. Thus, managers should take the initiative to discuss every business decision with the employee and take their feedback on the future implementation of that strategy; so that more effective business decision can be taken. In addition to that, quality products should be chosen for making their final products by following all the food and safety regulations according to the governing regulations for the respective nation. Taken for instance, they can take initiatives for making smoothies from herbal and natural materials like fresh fruits and mints that are healthy and innovative. In this way, they can avoid the food safety scandals like the way they face in the past.
Leaders of an organization should emphasise on the employee training. Training for employees in the fast food industry also improves the competencies of the employees. This training in techniques and knowledge in the fast food industry will help the organization to formulate new products and menus in order to fulfill the basic requirement of the customer. Moreover, a procedure for conducting proper market research regarding the recent demands collaboratively also allow the organization to gain an overview of required products details that on incorporation within the organization enhances their profitability. In this way, the inter-personnel relationship among the managing authorities and working personnel will also be enhanced.
Conclusion
Thus, it can be concluded that there is an association between the leadership style and the organizational culture. In context of Mc Donald’s, it is found that due to lack in leadership styles, the company faced extreme loss in 2013. The strategies that can improve their organizational culture is to maintain the competitiveness in the market by fulfilling the customer’s demand, following all the food and safety related legislations, discussing every business decision with their employees and provide them financial and non-financial benefits. As leaders are liable to motivate and guide their subordinates to maintain their competencies for attaining business goals and objectives. These leaders should also change their way of performing business according to the changing market demands and emphasise on the development of the employees through training in order to attain effective competitive advantage. Thus, leaders are responsible for motivating employee as well as enhancing organizational culture.
Reference List
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