Country : Australia
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Introduction: In this case study, I will work on McDonald’s which is leading brand of fast food-chain industry and I will discuss the issues faced by McDonald’s, main factors of the problems and will make recommendations to resolve these issues. McDonald’s Corporation is an American fast food company which was founded in 1940 as a drive-in restaurant in California, United States by two brothers Richard and Maurice McDonald. They started with hamburgers and Shakes and later they turned their company into a franchise. It is McDonald’s is the world’s leading restaurant which serve more than 69 million customers daily in over 120 countries in the world with around 37,855 outlets in the world in 2018. McDonald’s is the world’s second largest recruiter in the world with 1.7 million employees. McDonald’s has taken various steps to achieve its mission and vision and to increase its business. They are providing many services to attract the customers by giving different menu options to choose from. Moreover, McDonald’s offer a happy meal concept to enhance its profit and children zone is also introduced to lure the customers. But the staff of McDonald’s is not able to cope-up with the situation as there are various items are available in menus which need more speedy work. Along this, the drive-thru service needs more attention and quick service but the staff is not able to follow which leads to customer dissatisfaction. McDonald’s have to face negative response of its customer service that staff is rude and their behaviour is not appropriate towards customers which decline its revenue growth from previous years.

Step 1: Problem: A problem is arisen when the desired goal is not achieved. McDonald’s performance is poor as compare to previous years and also decline in revenue growth. McDonald’s reported a loss of 343.8 million dollars in first quarter of 2003. McDonald has to face many issues and challenges such as competition, poor customer services, poor management system and bad marketing (UKEssays 2018). The main challenges faced by McDonalds are:

  • Customer Service: The main issue has arisen for McDonald’s is its poor customer service. A customer service index reported in 2003 that McDonald’s is poor in its customer service and McDonald’s executive reported that 1 out of 5 customer complaints regarding staff’s rude behaviour and poor customer service. Another factor of poor customer service is slow service at drive-thru. So, customer dissatisfied due to the slow services provided to them.

  • Competition: Burger king is the second largest hamburger fast-food provider after McDonald’s and it is biggest competitor for this. As Burger King offer variety of food items to select from which is a headache for McDonald’s. In addition, there are many other like Wendy, Hardee, Jack and Sonic are biggest rival of McDonald’s.

  • High turnover: McDonald’s has highest employee turnover rate as compare to its competitors. The reason is low wages and no rewards are given to the staff to motivate them. The rate of employee turnover is high and the staff prefer to leave the job if they get a new opportunity.

  • Health Factors: The high-calorie burger and fries are hard to replace with healthier food items. So, McDonald’s is struggling to meet its customer’s demands and expectations as they demand healthy food items. 

  • Poor Management: The leadership of McDonald’s is very poor. There are no incentives and rewards are given to employees for appreciation and their efforts which demoralised them. Furthermore, lack of proper training and experience is also vital issue is faced by McDonald’s. As most of the staff is teenage who have not much experience to do work effectively and efficiently.

The outcomes related to individual level, Group/Team Level and Organizational level are not achieved. For instance, on individual level the work attitude of staff is very poor which leads to customer dissatisfaction. There are no rewards or incentives given to employees to enhance their creativity and well-being. The low pay rates lead to high employee turnover which affects the team performance. If an employee is not earning as per their effort, they will not perform well which leads to group dissatisfaction. This problem will affect the performance and productivity of the company. If the customer will not be satisfied by the services, it effects the reputation and financial conditions of a company.

As per my perception, the most important problem in this case is poor customer services. Every business is based on its clients and consumers who purchase their products and services. If they are not satisfied, it affects the productivity and revenue of a company. In this case, McDonald’s is facing many issues but customer service is vital issue to resolve to stay in competition and leading in food-chain industry. The rude and unethical behaviour of staff to dealing with clients is the main cause of this issue. Another reason is slow service at drive-through window which leads to customer dissatisfaction.

Step 2: Organisational Behaviour is an interdisciplinary field which helps to understand and manage human behaviour in an organisation. Aswathappa (2009) reveals that Organisational Behaviour (OB) helps an organisation or industry to work effectively to gain its goals. OB refers to the behaviour of individuals and groups within organisations and the interaction between organisational members and their external environments. OB is based on contingency factors. These factors are person and environmental which are dynamic. In the case study of McDonald’s, there are several person and environmental characteristics, which effect its overall performance. Due to these factors, McDonald have to face many issues related to customer satisfaction and its performance.

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