1

Business 260 Principles of ManagementFinal Project Written Report

McDonalds on Creating a Healthier Menu

Michelle Beaulieu: C.E.O.Christina Lucente: Executive Vice President

Nate McNamara: District ManagerEverett McGuirk: Store Manager

Robert Bouchard: Warehouse Manager

December 10, 2010Professor Felicia Riffelmacher

2

Table of Contents

I. Introduction & Background….…………………………………………...4

II. Planning…………………………………………………………………….5

A. Top Managers ReportB. Middle Managers ReportC. First Level Mangers Report

III. Organizing………………………………………………………………….9

A. Top Managers ReportB. Middle Managers ReportC. First Level Mangers Report

IV. Leading……………………………………………………………………..16

A. Top Managers ReportB. Middle Managers ReportC. First Level Mangers Report

V. Controlling………………………………………………………………….20

A. Top Managers ReportB. Middle Managers ReportC. First Level Mangers Report

VI. Appendix……………………………………………………………………24

3

4

In recent years, many people have become increasingly aware of their personal health and

well being. As one of the biggest corporate chains worldwide, we at McDonalds realize the need

to take social responsibility and improve our menu in order to provide more nutritious products

that are part of a well balanced diet. We also understand that many consumers do not understand

proper nutrition; therefore it is important to educate them on guidelines that create an overall

healthy lifestyle.

We at McDonalds have been targeted for the obesity epidemic, as well as a plethora of

other health issues. The documentary “Supersize Me” attacked us for allegedly serving only

fattening, artery clogging foods. We now realize the damage that some of our products can cause

to the bodies of our consumers; however, we want to use this as an opportunity period to create a

much healthier menu in which we can help our customers understand how to stay healthy on a

long term basis.

5

PLANNING

6

Top Managers Report

Strategic Objective:

The vision created by Top Level Managers was to create the long term strategic objective

of changing consumers’ views concerning the fast food industry. We want consumers to realize

that they can still have quick, convenient, tasty foods that fit in with a balanced diet.

Our proximal goals which we plan to implement immediately are to begin selling more

fresh fruits and vegetables as well as using canola oil to fry foods as opposed to other

hydrogenated oils. Canola oil is high in healthy poly- and mono-unsaturated fats and low in

saturated fats. We will also add the option of whole wheat buns to our menu; this will be an

important addition due to the importance of adding whole grains into the diet.

Creating a S.W.O.T. Analysis helped to determine the strengths and weaknesses of our

objectives (Appendix A).

7

Middle Managers Report

Tactical Plan:

Middle management is responsible for carrying out the strategic vision of the top

managers. To reach our objectives, all employees will be needed to take action; Radio

Advertisements, Television Commercials, and Promotional Signs will also help highlight our

objectives. Customers will know healthier options are now available to satisfy their needs

without feeling guilty about their choices later.

Management by Objectives:

Middle management is also responsible for quantitative data. Our goal is to sell 100

salads per week (per store) as well as selling an equal amount of apple dippers and fries in our

happy meals.

By using strategic advertising we can show all options to our customers. Employees will

have a large role in this by suggestive selling our new options. Promotional boards and signs will

also be important because they increase the chances of customers making a last minute switch to

a salad or apple dippers. If children see other children eating and enjoying a healthy happy meal,

they may want the same thing. Middle managers will meet every month to track progress and

continue to make McDonalds one of the leaders in selling healthy food.

8

First Level Manager’s Report

Operational Plan/ Standing Plan:

The job of store manager is to make sure the strategic and tactical plans laid out by upper

management is carried out into individual McDonalds stores. The store manager will see that the

day to day running of the restaurant will adhere to upper managements plans to get people to eat

healthier. We are focused on selling more salads and healthy happy meals, which include milk

and apple dippers instead of the normal soda and fries. This will include physically distributing

new posters, pictures, and advertisements within each store; showing customers eating healthier

choices. We plan to launch this new campaign around the holidays, with advertisements focused

on a New Year’s resolution of getting healthier.

Our goal is to get people eating healthy on a long term basis. With this in mind, the store

manager would establish a standing plan, opposed to a single use plan. Middle level management

has established a goal of selling 100 salads and 100 healthy happy meals per week, a goal which

we will continue to strive for until it is reached and eventually eclipsed.

Producing a Gantt chart helped to organize our goals into a realistic timeline in which our

goals will be implemented.

9

ORGANIZING

10

Top Managers Report

Chain of Command:

It was absolutely necessary to establish a chain of command within the company to

determine which tasks each member is responsible for.

In top management bracket, we have appointed both C.E.O. and Executive Vice President

who are the vision setters and communicators of the corporation as a whole. Top Management

seeks out ideas to build on and improve on the company.

Middle management is responsible for taking these ideas and putting them into action as

well as taking quantitative measures within the company. Our District Manager is in charge of

watching over the stores within its region and to ensure the numbers set in place are being

followed through.

In the first level of management, Store Managers are responsible for how tasks are run on

a day to day basis within each individual restaurant. The store manager needs to keep strong

records of what is being sold and whether employees are working up to par.

The Warehouse Manager is responsible for having the necessary products needed by

individual stores; this ranges from food products to packaging and advertising materials.

Centralization:

Because of its enormous size, McDonalds is a decentralized corporation. There are many

franchises owned and operated worldwide, so although there are many intrinsic similarities, each

store has its own unique qualities, including the amount of traffic it receives, certain physical

characteristics of each store as well as pay rate (as minimum wage varies from state to state).

11

There is also slight contrast in the menu items themselves (e.g.; since different countries adhere

to different cultural beliefs, stores in China do not have many of the same items as American

chains do).

12

Middle Managers Report

One of the most important factors middle management needs be conscious of is the fact

that since we are a decentralized corporation, numbers will vary between stores due to

different amounts of traffic that each receive. So although we have set out an ideal

number that we would like every store to aim for, we must remember that some chains

will have much higher numbers while others will be on the lower end of the scale.

Intraorganizational Process:

Our business will be carrying out the empowerment Intraorganizational Process. We want

to give our employees the determination to do good by coming up with incentives for prizes for

employees who do the best job.

Giving employees incentives is an overall good strategy; not only to achieve our goal, but

it promotes team chemistry and healthy competition which means better business, great attitudes

at work, happy employees and most importantly, happy customers.

Federal Employment Laws:

McDonalds strongly adheres to the Civil Rights Act of 1964 and the Equal Pay Act of

1963. McDonalds is a very diverse business with many stores worldwide. McDonalds offers

employment opportunities for every race, religion, gender and heritage. Without this diversity we

would not be as successful throughout the world as we are today.

13

McDonalds also strongly agrees with fair pay between employees, with neither gender

nor race being an issue; However all employees and managers have different skill sets which is

the main deciding factor for their standing within the company.

14

First Level Manager’s Report

Warehouse management needs to have exceptional organizational skills in order to have

the correct amount of product and means of distribution.

Since one warehouse distributes to many stores, it needs to be aware of the needs of each

individual store.

Store managers are responsible for the physical distribution of advertising materials to the

customer. This includes setting up signs and making brochures available.

Virtual Organizational Procedures:

McDonalds is without a doubt one of the most successful and stable businesses in the

world. With a name as widely recognizable as such, it is important to maintain the success.

McDonald’s will strive to have a virtual organization. This is a business that has hundreds of

thousands of stores across many countries. With a company this size, it is best to keep every

aspect of control within the company. Stores within different districts will get together united by

the common goal of selling healthier food. The organization will be able to determine what

works best in different branches, and work together towards the same goal. McDonalds is large

enough to be part of its own network of other McDonalds that share skills, costs, capabilities,

markets, and customers with each other. In this case, we will be sharing advice focused on

getting customers to eat our healthier choices with each other.

15

Recruiting Process:

McDonald’s has an incredibly high number of employees. We are a company that always

has openings. It is important to offer equal opportunities for every candidate, and to conduct the

hiring process with no discrimination. We will post our job openings in almost every way

possible, from telling our current employees to recruit any interested friends or family, to posting

openings on internet search sites. With a company this large and well known, it will not be hard

to find people willing to apply.

We will conduct background checks. It is important to make sure our employees do not

have large arrests records, with felonies under their belt. Our background checks will be limited

however, because of the price it costs to do them thoroughly and the amount of people looking to

be hired by McDonalds being very high. We will give anybody a fair chance to prove

themselves, unless by looking at their arrests record it becomes clear they are a danger to

customers or the restaurant. We will conduct our interviews in a semi-structured format. This

way the questions that need to be asked will be, and the interviewer will have a chance to talk

more freely to the applicant to get a clearer sense if they could succeed at our restaurant. We will

also make it clear to our applicants that we are focusing on making our food healthier. We will

let them know that our employees are expected to recommend healthy food to our customers and

by doing so will be able to gain prizes and rewards from the company if they sell healthy food by

suggesting it.

16

LEADING

17

Top Managers Report

Leadership and establishing a positive example are the core components of running a

successful business.

We will be holding a paid workshop for our middle managers to attend in order to

educate them on our strategies, as well as our new products and nutrition in general.

o To make this fun for them we will provide them with a free lunch with samples of

our new products .

To inspire employees to work together for a good cause we will donate and extra $100 to

the Ronald McDonald charity for every 100 salads sold per week!

18

Middle Managers Report

Extrinsic Rewards:

Motivation is the key to be successful in any endeavor. Your employees need to have the

drive to carry out goals; having extrinsic rewards inspires employees and managers to work

harder.

Middle manager will offer raises to those first level managers whose stores are meeting

projections. The manager whose store sells the most healthy choices during their shift will

receive a benefit package of an extra 2 weeks vacation and 5 holidays off; this would run through

a period of 6 months- to the victor goes the spoils.

Management Style:

Middle management has chosen the participative style of managing to lead First Level

Managers. This style fits McDonalds because in order to get things done in an effective and

efficient manner, team work is key. By working in conjunction with First Line Management, we

can receive feedback from individual stores to determine what strategies are working and which

ones are not. By creating an open atmosphere of communication, we can also come up with ideas

that may not have come up before.

19

First Level Manager’s Report

Reinforcement theory:

Our Warehouse Manager plans to use intermittent and positive reinforcement to help

achieve our goals. The reason for using an intermittent schedule is due to the fact that numbers

are dynamic and change often. Strategically we want our numbers of healthy food sales to go up.

To positively reinforce this, the Warehouse will sell products at a 5% discount to those stores

who are meeting and exceeding projections.

The store manager is also responsible for using positive reinforcement to inspire and lead

employees to do a great job! When someone is working in an atmosphere where they feel

comfortable and that their voice is being heard, they are far more likely to do a good job!

20

CONTROLLING

21

Top Managers Report

Benchmarking:

Although we are one of the largest companies in the world, we still face a great deal of

competition. It is wise to use the strategies of our competitors to improve our own products.

Using benchmarking strategies allows us to observe and determine what has made other

companies successful.

Subway is probably one of the toughest competitors we face simply because it holds such

a huge market share of health conscious consumers within the fast food industry. Some great

steps they have taken include but are not limited to:

Using a real life spokesperson to promote their healthy products. “Jared” was an

inspiration to many when he lost hundreds of pounds when he began eating fresh

products from the chain.

The availability of many fresh vegetables, healthy bread choices, yogurt and pre-

packaged fruits appeals to healthy eaters.

Baked fresh in store products.

Great promotions and advertising as well as making their nutrition information

easily accessible.

22

Middle Managers Report

Control Methods:

The control method chosen by middle management was objective control because it is

well balanced; it keeps first level managers focused on the task at hand. It takes a fair and

objective look at how well everyone is working together. When managers act with a sense of

leadership it often determines how hard their employees work under them.

We also came to the conclusion that self control is not a good management style for

McDonalds. This is due to the lack of leadership. When everyone is managing themselves there

is no teamwork and things can get out of hand. Certain managers and employees can become

power hungry and it would become utter chaos.

23

First Level Manager’s Report

The responsibility of the store manager would be to keep records of how much is being

sold and who is doing the best job of promoting our objectives.

If an employee is not meeting objectives, it is important for the store manager to find

ways to change the course of action.

Balanced Scorecard:

A balanced scorecard helps to keep an eye on achieving the overall goal. The Four issues

found on our balanced scorecard are Healthy Foods, Customers, Price, and Employees.

Healthy Foods- We need a large selection of healthy foods to introduce and sell to

our customers. These include different selections of salads, vitamin water, fruits,

un-hydrogenated oils for cooking with, and Grade-A meat products.

Customers- It is important to ensure customers are happy with these products

otherwise they may choose to go elsewhere.

Price- Prices do not have much room to fluctuate because this is another key

factor in which consumers decide where they want to eat. We want to keep our

prices low to keep our valued customers happy.

Employees- Employees must have a great attitude and be able to suggestive sell

our healthy products. They must also be well informed of the changes we are

making and also be able to inform our customers.

24

25

Appendix

26

A

Swot analysis

27

B.Gantt Chart

28

C. Maslow Hierarchy