mcs fastfood project
TRANSCRIPT
A PROJECT ON
MANAGEMENT CONTROL SYSTEM
OF
FAST FOOD RESTAURENT
McDONALD’s
FACULTY GUIDE: SUBMITTED BY:
Prof. Sujoy Dhar Dyuti Lal
IBS Kolkata 09BS0000728
INTRODUCTION
McDonald’s:
The McDonald's concept was introduced in San Bernardino, California by Dick and Mac
McDonald of Manchester, New Hampshire. It was modified and expanded by their business
partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests of the
McDonald's brothers in the concept and went on to found McDonald's Corporation.
The McDonald Brothers had been in the restaurant business since 1937. In 1948, they
closed down a successful carhop drive-in to establish the streamlined operation Ray Kroc saw in
1954. The menu was simple: hamburgers, cheeseburgers, french fries, shakes, soft drinks, and
apple pie. The carhops were eliminated to make McDonald's a self-serve operation. Mac and
Dick McDonald had taken great care in setting up their kitchen like an assembly line, to ensure
maximum efficiency.
Believing that the McDonald formula was a ticket to success, Kroc suggested that they
franchise their restaurants throughout the country. When they hesitated to take on this additional
burden, Kroc volunteered to do it for them. He returned to his home outside of Chicago with
rights to set up McDonald's restaurants throughout the country, except in a handful of territories
in California and Arizona already licensed by the McDonald brothers. Kroc's first McDonald's
restaurant opened in Des Plaines, Illinois, near Chicago, on April 15, 1955, the same day that
Kroc incorporated his company as McDonald's Corporation.
McDonald’s is the world’s leading food service retailer with more than 31,000
restaurants in 119 countries serving more than 50 million customers each day.
McDonald’s India:
In India, McDonald’s is a joint venture company managed by 2 Indians, Mr. Amit Jatia, M.D
Hardcastle restaurants Pvt Ltd owns and spread heads McDonald’s in west and south India and
Mr. Vikram Bakshi, Connaught Plaza restaurant Pvt Ltd, manages north and east India.
McDonald’s has 160 restaurants across the country, with its first restaurant launched in 1996.
McDonald’s has developed a menu especially for India with vegetarian selections to suit
Indian tastes and culture. Special care is taken to ensure that the vegetable products are prepared
separately using dedicated equipment and utensils.
McDonald’s Restaurant at Mani Square in Kolkata:
It is 137th outlet of McDonald (out of 160 in which this is second outlet in Kolkata) opened at
Mani Square Mall in Kolkata. First outlet in Kolkata was opened at Park Street. Mani Square
Mall is located in EM Bypass near Salt Lake. Mani Square Mall has the following features :
Movie Theater
Fast Food Shops
Retail Shops
Luxury Shops
Electronics Store
Due to these stores there is huge footfall in weekends as well as weekdays in this mall.
McDonald’s attracts family as well as young people due to its fast service and optimal price.
Management Control System
Definition:
Management control systems are methods of collecting information that are used to guide and
direct the behavior of staff members and management in order to achieve a company's goals.
Management control systems are established to maintain management control on a
routine basis, and can include budgets and budgetary controls, credit control, working
procedures, inventory control, production processes, and quality measures or controls. Hence we
can say that management control system is the process of evaluating, monitoring and controlling
the various sub-units of the organization so that there is effective and efficient allocation and
utilization of resources in achieving the predetermined goals.
While doing management control system, one has to look into various factors such as
economic, technological, environmental, political and socio-cultural.
Formal Management control system (MSMM Model):
InfrastructureOrganization structure
Level of AutonomyStrategy and Operation
Transfer PricingResponsibility Centre
RewardLong Term/Short Term
Individual/GroupPromotion
Co-ordination & IntegrationFormal Conference
Standing CommitteeInvolvement Technique
Formal Control SystemBudgeting and Capital Budgeting
Strategic PlanningOperational Planning
Cost AccountingProject ManagementVariance Analysis
Informal Management control system (MSMM Model):
Management Control System of McDonald’s at Mani Square Mall:
McDonald’s at Mani Square Mall is a
Franchise outlet which offers vegetarian
and non-vegetarian fast food preparation
of Burger, French fries, Coke Coffee and
desserts.
Order Taking Process:
Customer has to go to the counter, give the
order to the person standing on the counter
by consulting menu card or the pictures shown near the counter. Customer can pay cash or can
use their debit or credit card to pay the bill. Within 3 – 5 minutes after bill is generated
customer’s order is served right at the counter and customer takes his/her order and moves
towards the seating arrangement area.
InfrastructurePersonal ContactNetwork OrientedMinimal StructureExpertise Oriented
Emergant Role
Co-ordination & IntegrationTelephonic Discussion
Based On TrustPersonal Memo
Informal Control SystemUncertainity Coping
Adhoc IdeaAlternative Searching
Order Processing in Kitchen:
Once the order is taken, it is passed to the
kitchen with the order number. Orders are
processed in their kitchen in assembly line
fashion. Raw materials or the components of
dishes are prepared beforehand for the most of
the menu item, only assembling and there proper
dressing has to be done and the order becomes
ready within few minutes. For order processing
in assembly line, equipments supporting this are
used.
Supply Chain Management:
McDonald’s is a fast food chain with restaurant all over the world. It serves burgers and other
fast food items customized to local taste. Its philosophy has been ‘One World One Burger’,
Which mean that the burger must be consistent in terms of cost and quality. To meet such high
standards in India, McDonald’s had a very well orchestrated supply chain, called the ‘Cold
Chain’. In the supply chain management, the distribution center holds special place for bringing
food right to the outlet counters. For McDonald’s India, the distribution centre came in following
order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004 and the latest one in Kolkata.
Various suppliers for McDonald’s are
Radhakrishna Foodland
Trikaya agriculture
Dynamix diary
Vista Processed food private Ltd
Amrit Foods
McCain Food Pvt Ltd.
These distribution centers are responsible for procurement, the quality inspection
program, storage, inventory management, deliveries to the restaurant and data collection,
recording and reporting. All these suppliers are HACCP certified.
McDonald’s Staff: Their Recruitment & Training:
McDonald’s restaurant consists of crew members and a restaurant manager. They have to meet
the criteria specified by the McDonald’s and then the recruitment and selection process begins.
Managers receive their training first in Mumbai or Delhi and then get to work in the restaurant.
At Mani Square Mall, many staff of McDonald’s restaurant are part time workers.
But they also have to undergo training first and then only the work in the restaurant. So the
process is standardized one. This leads to increase in operational efficiency at each of the food
joint, because of the similar kind of training given to all employees (part or full time).
Rewards and Recognition:
These are based upon the customer handling time, order serving time, cleaning time, customer
feedback etc. Most of the rewards are related to employee recognition such as best performer,
star performer or employee of the month etc. These employees are awarded small gifts,
certificates or sometimes a bonus too from the franchise owner or from head office.
Strategic and Operational Planning:
Strategic planning such as business and marketing strategy and operational planning is done by
the mother McDonald’s company. Franchisee has only control over the location, rent of the
outlet, compensation to its employees, sales and profit/loss of the outlet. Franchisee has to pay
franchise fee (at the time of taking franchisee of Mc Donald’s) and 4 percent of outlet’s sale, fee
to the suppliers is also being paid by the franchisee owner.
Safety and Cleanliness:
McDonald’s at Mani Square (franchisee owner) has to keep in mind the safety norms, hygiene,
ambience and cleanliness and have to meet the standards specified by the mother company.
Otherwise non-compliance with the standards can lead to loss of franchise. Hence this is a formal
control process.
Co-ordination & Integration among employees:
Success of the outlet depends on the competent, courteous and reliable personnel to provide
quality product and service. Quality service can be provided in long run by trusting and
motivating the employees. Co-ordination and Integration among employees is an informal
control process at McDonald’s Mani Square Mall. To maintain co-ordination personal touch and
telephonic discussions are used by the franchisee.
OBSERVATION
By studying McDonald’s at Mani Square Mall it has been observed that this franchisee has
adopted mixture (hybrid) of formal and informal control mechanism.
Here infrastructure is mixture of formal and informal control process.
Organizational style and control is formal control process.
Formal control system is a formal and informal control process.
Co-ordination is informal control process.
Rewards is an informal control process
InfrastructureStrategy
OperationMinimal StructureExpertise Oriented
RewardIndividual/Group
Responsibility
Co-ordination & IntegrationTelephonic Discussion
Based on Trust
Formal & Informal Control SystemStrategic Planning
Operational PlanningBudgeting and Capital Budgeting
Cost Accounting
CONCLUSION
From the management control process of McDonald’s at Mani Square Mall, it has been seen that
the control process used by them is hybrid (mixture) of formal and informal control process
mechanism.
This is because
1. It is a franchisee outlet.
2. Mother company takes care of branding, promotion, supply chain and strategy part.
3. Franchisee owner has to take care of its employee, their compensation, cleanliness of the
outlet, its rent, delivering of products to the customer by meeting mother company standards
etc.
Key variables for the success of McDonald’s are:
1. Location of the outlet
2. Operational efficiency.
3. Supply chain.