Observation of Leadership & Organizational Behavior at McDonald’s PDF Print E-mail
Non-Technical - Leadership
Written by Eric Goldman, Tiago Santos, Sara Tully   
Sunday, 09 November 2008 09:00

Introduction

McDonald’s is comprised of more than 30,000 local restaurants and serves 52 million people in more than 100 countries each day[1]. The company is the largest food retailer in the world and is part of the American way of life.  In order to remain competitive and an iconic American institution, McDonald’s has developed programs and strategies for motivating employees and teaching leadership. As a result, our group believes that McDonald’s presented an excellent opportunity to observe organizational behavior in action.

 

In this observational study, we sought to discover what leadership techniques and group skills were actually practiced by McDonald’s employees. Our field study entailed visiting four different McDonald’s stores in the greater Rochester area during distinct shifts ranging from early morning to late night. During each visit, a group member made a purchase and sat at a table where one could observe the behavior of managers and employees and customer interactions, without interfering with normal operations. Due to the fact we were restricted to a small sample of McDonald’s restaurants, we could not capture the complete spirit of the corporation. However, we were able to relate our findings to leadership and organizational behavior theories and some of McDonald’s corporate values. Through a series of observations and corporate research we discovered that McDonald’s employees demonstrate quality leadership and that the organization as a whole puts significant effort into motivating and working for its employees.

 

Corporate & Work Culture      

When analyzing an organization’s leadership and teamwork skills, it is useful to first analyze the organization’s work culture and how this culture is maintained. The work culture of McDonald’s seems highly dependent upon the particular line manager in charge at any given point in time. One would imagine that the manager would almost always use position power and would use a telling style of leadership since the typical employee is young or inexperienced. Indeed, some managers were observed as running the operations in a machine like manner, especially during peak business periods. However, in the majority of cases the managers were relatively relaxed and sometimes were indistinguishable from the other employees. One manager in particular used a selling approach, which indicates a higher readiness level of her team (Daft, 2008, p. 73). She did not simply give orders, but accepted feedback and alternatives to her decisions. While it was obvious she was the manager, her team was obviously in the later stages of development and was comfortable outside of their predefined roles.

 

In general, the managers did not try to put any strong vertical barriers between themselves and their employees. Managers usually seemed to display real concern and interest in the emotions and well being of their employees, which was not expected in this environment. For example, one manager was observed asking an employee cleaning the floors about her weekend and her kids. There seems to be legitimate efforts in order to motivate employees even at the line worker level. Herzberg’s two-factor theory explains that good working conditions only go so far, and that employees require higher level fulfillment such as motivation and recognition in order to be satisfied with their position (Daft, 2008, p. 231). Even in a low- skill position, low turnover is desired. In addition, happy employees lead to happy customers.

 

McDonald’s corporate management believes in training and leadership at all levels through Hamburger University. On Hamburger University’s website[2], they quote McDonald’s founder Ray Kroc’s training focused ideology: “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent”. This ideology demonstrates that McDonald’s does not believe its restaurants’ crew members are just gears in a machine that can be easily replaced. Because training is not just offered to executives or managers, McDonald’s is able to spread and reinforce its culture and values in all directions, not just downward. McDonald’s corporate values also have “people” as one of its pillars (McDonald's Corporation, 2008). Corporate policy says that employees should be paid at or above the local market rate, and should also value both their pay and their benefits. By addressing employees higher needs by providing training they make employees feel important and valuable. Training also serves to reinforce the culture at all levels through education and fostering a positive image of the employees’ importance to the company. 

 

McDonald’s Motivating Factors

Of the McDonald’s restaurants we observed, the culture was generally inviting for new employees. In addition, other factors make McDonald’s an ideal employer for many individuals.  A primary motivation for working in a McDonald’s restaurant is that it presents a laid back environment and the job itself is not very stressful. Even during the observed lunch and dinner rushes, the employees never appeared particularly stressed or anxious. When there was a lull in the restaurant the employees would clean their stations, chat with other employees, or get a drink from the soda fountain. They were very relaxed and for the most part did not seem to fear their managers or other bosses. As Daft explains, fear can weaken trust and communication, and is usually impedes employees rather than motivates them (Daft, 2008, p. 152). For a high school student who is busy with school work and other extra-curricular activities, it may be ideal to work in a laid back environment like McDonald’s. A student’s life may be highly stressful, and a low-skill, low-stress job offered by McDonald’s may provide a break from an otherwise stressful life. Also, for the elderly employees, the low stress environment may also be desirable because they would not be overwhelmed with responsibilities that might be new to them.

 

Another possible motivator is the social opportunity presented by such a job. As noted above, employees tended to have a very casual environment where they could talk and socialize while they worked. For example, many of the employees who work during the evening shifts are high school students.  These employees are often the same age and often share common cultural interests. They are also presented with the opportunity to meet new people and develop friendships that can continue to develop outside of work. They will also have a bond with these employees because they share a common experience, and are likely from a similar background.  Employment at McDonald’s also offers social opportunities for those employees who are young but do not attend college and for the elderly.  Many of these employees do not have the opportunity to participate in clubs or other organizations, and interact with people of their own age or anyone in general.  It may even be possible to develop a romantic relationship with another employee, as McDonald’s is not a work environment where this could be seen as a problem by management.

 

A third reason for working at McDonald’s is the flexible schedule.  McDonald’s offers many different shift schedules so they accommodate everyone. This can help employees find a healthy work-life balance. Some individuals require fulltime work, which is available through the standard day shift, while part time workers can pick up their hours after school ends, on weekends or around other social obligations. Since the company requires in some levels a low skill job, another employee can easily take one’s shift over, allowing the later to take on other obligations and not be completely tied to the workplace. Part time employees can rotate their hours according to who has requested to have a certain day off.  This gives employees a sense of empowerment because they have same say in their schedule and are less likely to call in sick to avoid work, which would lower team morale and the respect between the managers and the employee (Daft, 2008, p. 242). Even though the average employee is unskilled or does not require skills, empowering an employee helps him feel important and makes him feel better about his job. In addition to the flexibility offered by a position at McDonald’s, the convenient location might serve as another motivator.  There is a McDonald’s store in most every town, and it may be relatively close to an employee and the only available job which does not require a skill or advanced training. As a result, employees who do not have cars can walk to work or take public transportation. In light of the recent economic downturn and the high price of gas, having a job in your own neighborhood is a huge benefit, especially for a young person or a person trying to earn their first paycheck.

 

Finally, an additional motivator is the numerous growth opportunities available.  McDonald’s offers training to employees at various levels. In addition, if any employee stays at McDonald’s for a long period he could advance into an assistant manager or manager position. While typically a McDonald’s job is seen as temporary for young people, it may be the only job available for an impoverished person, recent immigrant, or someone with no learned skill. Since there is a high rate of turnover, employees have the chance to advance within a few years of working at a restaurant. This opportunity could be very appealing for those who cannot attend college for some reason. If during his high school years an employee was a hard worker, he or she could easily move into a manager position and continue his career with the company or gain experience to move into another job without a formal education.

 

Through our observations we were unable to determine the exact theories of motivation mangers used, but it was clear that the theories were of a needs-based nature. In general, the average employee does not commit to McDonald’s for a long term, and high turnover is expected. Thus, for the majority of the employees the goal is to satisfy their lower needs. Using Maslow’s hierarchy, the main goal is to provide the basic needs such as a safe environment where they can earn the money they needed to provide for their physiological needs (Daft, 2008, p. 228). However, there are typically no real fringe benefits (besides free food) associated with the job, and there is no contract or other guarantee of continued employment. In some cases though, there was observed belongingness through friendships and team unity.  In addition, the two-factor theory of motivation seems to be employed (Daft, 2008, p. 231). McDonald’s seeks to reduce dissatisfaction by having good hygiene factors - adequate pay and organizational policies. In many cases, there does not appear to be a high focus on implementing motivators; employees did not seem unhappy, but there seem to be very few opportunities for recognition and growth except for those who plan to be long term employees.

 

The Best Employee

In continuation to what was observed in the visited McDonald’s stores, one cannot neglect to address the leadership style displayed by the line managers in these restaurants. Conforming to the informal and relaxed atmosphere emphasized by the manager’s calm attitude and the McDonald’s “100% customer satisfaction” goal; one could expect a “middle-of-the-road” type of management in which the leaders behave as compromisers (Northouse, 2007, p. 75), exhibiting both people and task oriented behavior. Indeed, during this field study the line managers seemed to be very expedient, approaching a station whenever there was a problem and giving directions to the subordinates. The managers appeared to be moderately concerned with the people who did the tasks, yet they were focused on production and ultimately product quality. There were no noticeable conflicts between leaders and followers and an equilibrium state was achieved between them.

 

The line managers’ leadership behavior reflects a task-oriented style for the crew members. The commitment and positive attitude towards a given task are derived from the employees’ motivations and leader behavior. According to the Path-Goal Theory, for tasks which are characterized as repetitive, unchallenging, mundane and mechanical, the group members tend to be unsatisfied and in need of affiliation and human touch (Northouse, 2007, p. 134). Therefore, the most suitable leader behavior for this type of environment is the supportive leadership that provides nurturance and makes the work pleasant for subordinates.

 

McDonald’s Corporate believes its success is attributed in part to the talented restaurant crew. Also, Corporate claims to be engaged in talent management: attracting, developing and retaining talented people from all levels[3]. The leader behavior observed in the McDonald’s stores corresponds to the employment experience values promoted on their website. From the field study experience, one can surmise the McDonald’s leader-follower relationship as the following:”The task is simple. We provide all necessary tools for you to accomplish your job. Show commitment and perform your duties properly. I am here to help if necessary. I will not trouble you”. For the McDonald’s case, a comfortable and friendly environment reinforced by the line manager is paramount for the employee’s satisfaction.

 

Good customer service is one the most important aspects in the fast food industry. It is crucial for the employees in this sector to display courtesy, genuine concern and diligent service towards the clients. Unsurprisingly, this trend was commonly found in the visited McDonald’s stores. Most of the cashiers there would greet the customer with a smile and a “how are you today, sir”, followed by a “thank you” once the transaction was done. Behind the scenes, the workers cooking fries and flipping burgers made sure their products were been delivered in a steady pace and in accordance to the company’s quality standards. Finally, the line manager’s role was to make sure things were running smoothly, fill gaps whenever necessary, assist crew members and perform other managerial duties such as inventory control, managing budget and human resources.

 

As in any assembly line, the employee’s performance is heavily measured by his or her efficiency level. It amounts to how many items the worker delivered in a given period, following a certain quality standard. Of course, there are others important points to be considered in order to determine who the best employees are. Initiative could be a means of distinguishing the workers in this sort of environment. This could be exhibited by a cashier who cleans the counter if idle, a cook who starts cleaning the kitchen earlier, or even a manager who presents to the company a new product or service concept. Also, cooperation plays a big role, because McDonald’s relies on groups and teams. Each employee relies on another line worker in the assembling process. In the end, any worker who demonstrates these qualities could have his/her picture hung on the wall as the “employee of the month” – this is a classic example of how McDonald’s stores motivate and reward their employees.

 

The best McDonald’s manager/leader is the one that promotes a pleasant atmosphere for his/her subordinates to counter the limited job’s motivating factors. However, the manager should also focus on maximizing production and delivering a good service to the customers. The ideal McDonald’s leader must apply a coaching leadership style, showing both high directive and supportive behaviors. From what was observed in some stores, the managers of the restaurants seemed to be in control of every aspect of the entire food service process. At some instances when things went completely out of control; the same managers exhibited a coaching style of leadership, directing the subordinate on how to achieve a specific goal. Whenever they overheard or saw someone doing something wrong or partially correct, they would step in giving directions to their subordinates and would never disrespect them.

 

Team Work at McDonald’s

While not all employees can be superstars, McDonald’s owes is success to its team functionality rather than the efforts of one individual. McDonald’s does not have very highly integrated teamwork, but they would be unable to deliver their products and service without sufficient team unity and cooperation. The team on the floor of a McDonald’s restaurant is best described as a functional team (Daft, 2008, p. 297). Team members have one area that they focus on during their shift.  If they leave their post or are not productive, other line members will not be able to accomplish their jobs and the production line will suffer. For example, when a customer enters the restaurant places an order with the cashier, the later inputs the order into the computer and the information is displayed in the kitchen at the sandwich and grill stations.  The grill worker prepares the meat and then places the burger on a bun.  The sandwich maker then assembles the sandwich according to the type of sandwich and any additional requests the customer has.  If the sandwich maker leaves his post, another worker has to cover for him or the entire product delivery process shuts down. As a result, a McDonald’s restaurant team is sequentially interdependent (Daft, 2008, p. 301). Without everyone working together and having sufficient motivation to provide good and quick quality service, all members of the team fail. As a result of one person losing motivation or failing to adequately perform his duties, customers may complain and business can be lost. Even though most employees are trained to perform multiple tasks at various stations, they are not usually able to perform all of these tasks simultaneously.

 

The typical team was not self-reliant and required constant, direct input from the manager. We observed that often times when morale began to wane, the manager was able to reinvigorate the team and increase efficiency. However, we also noticed that if the manager grew tired and lost motivation the rest of the team quickly followed suit. Managers were also instrumental in helping out struggling team members by motivating them. This attitude kept the production line moving adequately. The team effectiveness is directly related to the manager’s leadership efforts (Daft, 2008, p. 303). In order to ensure both efficiency and quality in the team’s work, the managers had to make some efforts to satisfying employees’ needs. This manifested as direct help, words of encouragement, not punishing undesired behavior every time, or awarding a break and taking over a worker’s responsibilities temporarily. Nevertheless, employee seemed well trained and autonomous as long as morale was at a sufficient level. The team operated mostly without speaking.  Sometimes team members would yell an order to another member, but generally everyone knew what they had to do without much discussion.  Because the team did not need constant retraining or correction, it is a sign that the employees are well trained and have been given the tools to adequately perform their roles.

 

The Overall Leader & Corporate Values Reflected

While McDonald’s is a large multinational organization, the CEO is often seen as a leader and symbolic driver of the corporate initiatives and ideals. McDonald’s current Chief Executive Office is Jim Skinner. Mr. Skinner has been with McDonald’s for over thirty-five years, and has held many positions from “restaurant manager trainee” to many corporate positions throughout his tenure, before being elected as CEO (McDonald's Corporation, 2008). Truly a charismatic and transformational leader, many attribute McDonald’s turn-around in the past few years to the efforts of Skinner; not only did he revitalize the organization, but he “reinvented the fast food business” with a new vision and direction (Hume, 2007). Early in the turn-around, he was one of the architects of the “Plan to Win” initiative which renewed McDonald’s core focus of store operations. His election to the CEO post provided some stability and faith for the organization. Hume notes that one of the key elements to his success was his vast experience with overseas markets that gave him great diversity exposure which was crucial for the global corporation. This diversity has definitely helped giving McDonald’s a competitive advantage, and was paramount in the global communication between employees and customers (Daft, 2008, p. 334). One of his noted achievements during his tenure in regards to leadership was fighting the “McJob” stigma; he made employees feel important and began to promote the various positions in a brighter light through advertising campaigns (Hume, 2007).

 

In terms of Mr. Skinner’s philosophy, he is primarily focused on customer satisfaction. He believes that is necessary to first meet customer expectations and then focus on the restaurants themselves. The philosophy also includes keeping things simple and manageable for each store while making sure that “everyone is aligned around that one idea”. The idea is directed towards making a good appearance, caring about how the restaurant looks and how you present yourself. Another important aspect of his philosophy is the fear of complacency. Therefore, he encourages creativity, but also wants to make sure that people do not lose track of the chain’s primary objectives (Hume, 2007). Thus, there is a strong focus on coming up with good, creative strategies, and then putting the full effort into successful execution. For Mr. Skinner, a companywide initiative is always a must, and never a maybe. Skinner is also a man of values and ethics: When McDonald’s was blamed for the obesity problem, he helped direct the company to take responsibility and help create a solution rather than pass the blame. Thus, Skinner can be seen as a moral leader and symbol of doing the right thing for McDonald’s (Daft, 2008, p. 169). Finally, one of Skinner’s continuing main goals is “talent management and leadership development” (Hume, 2007). This involves critical tasks such as reorganizing individuals into different roles and identifying potential leaders to be awarded additional responsibility.

 

While many of the Mr. Skinners values are not easily discernable on surface, his leadership was seen at the restaurants observed. The care regarding customer satisfaction was most obvious, employees were always polite and the restaurant was very clean. During some observations, employees were seen talking with regular customers beyond the normal service interactions, demonstrating some level of intimacy between them. In addition, almost all employees seemed well mannered and presented themselves well. There seemed to be a high level of morale, even with the more menial and custodial positions, which was unexpected in a fast food restaurant. In many of the locations visited, there were employee recruitment signs on the door that listed benefits; however, the application process was online. While more efficient, perhaps a stronger focus on in-person recruitment would help improving morale and result in more applications.

 

Improving Employee Effectiveness

One may initially believe that there is not really much that can or even needs to be done in order to improve efficiency in McDonald’s restaurants; however, good leadership involves constantly reinforcing a brighter vision of the future and increasing value for both customers and employees. An employee should not think that just because they cook fries or flip burgers, that they cannot make a difference. Rather, by encouraging creativity and leadership even at this lowest level, the next great executive may emerge. It is important to turn each restaurant’s employee into a productive team member. In order to increase productivity and employee commitment, we propose several measures. The first measure would be to create a program to encourage creativity among restaurant managers, owners, and operators. In fact, the iconic Ronald McDonald was not developed by Ray Kroc or anyone at corporate, but by the owner of a local franchise (Walker & Scott). Rewards should be available for coming up with new ideas at the restaurant level. As owners and managers are the ones who are actively involved with the day-to-day operations, they have a greater vantage point for implementing successful changes. In order for such a program to be successful, there must first be some educational programs like workshops. At the regional level, managers and owners can be brought together and taught about creative ideas. This will encourage thinking “outside of the box”, and furthermore can introduce individuals to the practice of “creative swiping”, which is a process of copying the best ideas whether they be from within your industry or from completely unrelated fields (Peters, 1987). After properly motivating the owners and managers, there should be a trickledown effect to the restaurant’s employees.

 

In addition to the trickledown effect of targeting the managers, we would take steps to directly motivate individual employees as well. On this front, one of the first steps is to truly understand each and every employee. Some employees may only be working at McDonald’s temporarily, but for others this may be the only available job opportunity. For such individuals, they want to maximize their job satisfaction. We would implement a program similar to those in large corporations where employees are able to set specific goals and explain their rationale for working at McDonald’s and what they expect from their employment. This process would show employees that they can do more than flip burgers, for example develop leadership and management skills which can be invaluable regardless of future career plans. Managers and/or owners would apply Vroom’s Expectancy Theory in this case; the attention and treatment of each employee should be personalized (Daft, 2008, p. 235). Managers would therefore develop a plan with each employee to increase his intrinsic satisfaction, while at the same time increasing that employee’s productivity.

 

Building on our focus on individuals, we would also implement a scholarship and education program. We want our employees to represent us well within our restaurants and throughout the world. We would offer high school and college aged employees a greater number of college scholarship opportunities in return for quality work and demonstration of leadership potential. Younger workers are often harder to motivate directly, but the opportunity to have someone else paying for your education is always a great motivator. The program would reward quality work such as customer service and punctuality, as well as creativity and the ability to dream like a leader. Employees must be sponsored by a manager or owner and would have to write an essay answering a question that instigates them to think creatively about how we as a corporation could improve. This would motivate even the youngest and most inexperienced ones. In fact, this could create an upstream effect on the whole restaurant or corporation, increase team cohesiveness and help encouraging those who are older or in higher positions to also think about making the entire organization better (Daft, 2008, p. 239). The winners would make a positive impact on the organization and earn the extrinsic reward of a scholarship. In subsequent years, this would encourage other young employees to also pursue this opportunity, be a first-class worker and think creatively about the organization.

 

Conclusion

McDonald’s is a multinational corporation, which is perceived as many different things to different people. Some people see McDonald’s as a decent, fast and inexpensive meal. Others may view the company chain as a low quality restaurant that employs uneducated and unskilled people. Nevertheless, McDonald’s has a cheery corporate image that prides itself on quality and cleanliness, as well as good food and good service. The company employs state-of-art technology to help its workers in their tasks and makes the production process faster, attending to the customers in a prompt manner. In terms of leadership, McDonald’s makes a strong corporate effort to develop leaders. There are growth opportunities within the corporation for those who are willing to work hard and develop their leadership skills. There is a great upward mobility for Macdonald’s employees. From what we observed in our field study, the work culture displayed in the McDonald’s stores is aligned with the firm’s corporate values.

 

References

Daft, R. L. (2008). The Leadership Experience. Mason, OH: Thomson South-Western.

Hume, S. (2007, December 1). McDonald's CEO Jim Skinner - R&I's 2007 Executive of the Year. Retrieved November 1, 2008, from Restaurants & Institutions: http://www.rimag.com/article/CA6553963.html

McDonald's Corporation. (2008). Corporate. Retrieved October 21, 2008, from McDonalds.com: http://www.mcdonalds.com/corp.html

Northouse, P. (2007). Leadership: Theory and Practice. Thousdand Oaks, CA: Sage Publications, Inc.

Peters, T. J. (1987). Thriving on Chaos: Handbook for a Management Revolution. New York: Knopf/Random House.

Walker, E., & Scott, W. (n.d.). Willard Scott as Ronald McDonald. Retrieved October 2008, 2008, from The Joy Boys : http://www.thejoyboys.com/ronald.htm



[1] McDonald’s Corporation website: http://mcdonalds.com/corp/about.html

[2] Hamburger University website: http://www.mcdonalds.com/corp/career/hamburger_university.html

[3] McDonald’s Employment Experience Values Website: http://www.crmcdonalds.com/publish/csr/home/about/Employment_Experience.html

 



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