Student Name – Harpreet Kaur

Student ID – 19152924
Tutor Name – Anthony Birch

Leadership Development

Executive Summary

Change management means continuously revising he direction, structure and capabilities of

an organisation in order to serve its internal and external customers in an effective manner. It
is a feature which is always present in the company at both operational as well as strategic
level. The company should be aware of the situation where and when the change is required
and has the ability to plan and implement these changes in the structure.

In the previous time, it was believed that if a company brings changes as a routine in the
company then it will not be able to manage the performance and improve efficiency. Thus,
the management should give enough time for a particular change to be adopted and settle
down in routine so that it can perform its operations effectively. However, now the approach
has been changed and it has become necessary for the organizations to bring changes in order
to achieve efficiency.

Now, change has become an integral part of the organisations in a similar way as it is of
human life. However, it is very difficult for the people to accept it because it forces them to
come out of their comfort zone and do something new by transforming their lifestyle which
sometimes proves very uncomfortable for them. In the case of organisations, they get an
opportunity to earn a competitive benefit, if they implement and adapt to the change
effectively and efficiently in the market. According to Hritz, “there are three stages in the
change management that are adapting to change, controlling the change and finally effecting
the change”.

A change in organisation is significant when it faces difficulties or problems with a particular

system in it. Hence, changes are introduced in order to improve the performance of the
company. It can be done by internal or external forces. Internal change can be at different
levels of the organisation whereas external includes introducing new technology which is the
present need of the company or trend in the current economy which can have a direct
influence on the profitability of the business.

The purpose of this analysis is to give an insight into the change management process in
McDonald's and provides solution and recommendation for the same.

Introduction

Two brothers Dick and Mac McDonald shifted to California in order to find out the
opportunities which were not available in New England. After experiencing failure in the
movie business, they tried drive-in restaurants which were proved beneficial for them. In
1948, they took a risk by reforming their operations and introducing their Speedee Service
System featuring 15 cent hamburgers. The success of the restaurant led the brothers to start
franchising their concept – nine becoming operating restaurants.
In 1954, Ray Kroc visited McDonalds brothers and became their franchise agent. He started
the first restaurant for McDonald’s system, Inc., a predecessor of McDonald’s Crp. In Des
Plaines, Illinois in April 1955. McDonald’s attained the rights to the brother’s company in
1961 for $2.7 million. Ray’s vision was to open 1000 McDonald’s restaurants only in the
United States. However, in 1967, McDonald started its expansion in the international market
by opening its restaurant in Canada and Puerto Rico. Today, the company has more than
36,000 restaurants in more than 100 countries. A clown with a smile became the trademark of
McDonald which was created very carefully. It was a successful hit. The big Mac burger,
developed by Owner/Operator Jim Delligatti of Pittsburgh is one of the most popular
products of McDonalds.

The menu at McDonalds is almost the same in every nation which includes burgers,
hamburgers, cheeseburgers and soft drinks with fries. Its main target is children, teens, and
families. It has become the most popular brand in the fast-food industry which sells ready to
eat and quickly served fast food.

Despite its popularity, McDonalds is still facing some challenges and there is a need to bring
few changes in its management structure and image to meet the expectations of its customers.
Today there is a lot of competition in the market. Moreover, people have become conscious
of their diet and health, hence, they are moving towards the food which is healthy and full of
nutrition rather than eating junk food which is known for no nutritional value and results in
obesity by increasing the fat in the body. In the present world, people are taking care of their
figure and prefer to take food which is low in fat and high in proteins.

McDonald is facing issue because it still sticks to its previous menu which includes unhealthy
and fattening food, though its competitors have moved towards the menu which is healthy
and non-fattening. Thus, McDonalds also needs to change the way it markets itself and
introduce a new range of products that matches the expectations of the customers.

Background to the situation of the change

In 1996, McDonalds has experienced a continuous decline in its sales for four quarters and it
continues till 2004. The company was losing its brand value in the market because of the
non-availability of “Great American Meal” to its consumers at its stores. The company was
consecutively targeted for low-quality food, decreased customer satisfaction and a link
between obesity and McDonalds food. There were many complaints were registered against
the company’s Big Macs and Happy Meal for deteriorating the health of not only Americans
but also the people around the world.

Because of all the above-said reasons, the company started losing its market shares. The
company experienced a huge loss of $343.8 million in its shares in the year 2003 in the first
quarter. It was the biggest loss since the company started its operations in 1965. The
continuous decrease in the share of the company, customer’s incline towards other rival
companies like Burger King and Wendy’s forced McDonalds to reconsider its strategy and
operations under the leadership of Jim Cantalupo in 2003.

Diagnosis of change

Every company has various departments that have their own value and significance with their
own specific purpose. Marketing is one of these departments which plays a significant role in
the company so was in McDonalds where it played a significant role in the development of
business. The main aim of this department was to implement the latest rules and regulations
of health insurance and safety. This latest style of awareness regarding health insurance and
children’s safety was adopted by focusing on the market. Now, McDonalds has launched a
new menu by focusing on the health of the children and tried to give an answer to frightful
advertising of McDonalds.
In addition to this, McDonalds aim was not only to make its customers happy but also
provide a nutritious diet which is good for children as well as the whole family. It offered a
new meal offer for children that is “McKids” especially for the balanced diet of children.
Moreover, for the improvement of business, it started new incorporated marketing and sales
communication which includes help in spreading the advert and convey it to the consumers.
This new deal has attracted the kids more in comparison to their parents. In order to establish
the change well, McDonalds has made a team that could handle the new assignment
effectively.

These kinds of changes in strategies provided the change not only in the marketing but also
boosted sales and advertising campaigns which helped to achieve the goals and success.
Now, it has started improving its position in the eyes of the customers. Integrated
Communication is an organised way to focus on the aim and success of the company. It is an
essential area of the strategy of marketing in McDonalds but advertising and promotional
activities can also not be ignored because these are concerned with offering all the services
including new through any mode of communication. The main aim of this change was to
focus on the sales and promotion activities of the company as well as the increasing sale of
the company.

Implementing the change

While bringing a change there are always a few conflicts that needs to be resolved. These
occurred either before or after their implementation. This change can bring either success or
failure to the company, therefore, these need to be resolved first otherwise they will create
hindrances in the structure of the new management. The management should make sure that
they are not only implementing the required changes but also capable enough to handle all
the issues effectively which will arise as a result.

The main reason to implement changes in the company structure especially through
marketing is to make the company more competitive in the industry by improving its image.
In this process, the company can face both external and internal obstacles. Hence, it is
important to take the agreement of its stakeholders because they are an integral part of the
company. Shareholders, customers, supplier and employees all are stakeholders and it is the
prime responsibility of the company to make them happy because if they are satisfied then it
will be beneficial for the company.

There are three major parts of change resistance – organizational, group and individual. The
issues faced by McDonalds during implementing change was its personnel, customers,
culture, and behavior.

The conflict will arise due to changes because people resist changes. These people can be
either employees or customers who are not happy with the new management system which is
implemented. Maximum time they can consider that change is not according to the issue or
can even worsen the situation. In the case of employees, they might not trust the people who
are in charge of this new change.

In the case of McDonald, the first resistance towards the change was from its employees
(including managers and staff) because they thought that it might increase the problems for
the company rather than resolving the issues. There were not only employees who have a
negative attitude towards the company but also customers who did not show any positive
attitude towards the change. Hence, McDonald was not able to reap the benefit as a whole of
the business.

Another resistance against this change was the unavailability of the qualified people in the
company who could maintain the staff and applications of the new marketing change
effectively. Apart from this, the insufficient budget and inadequate use of different mass
communication resources were also a matter of worry for the stakeholders.

Another conflict can be strategic implementation because this is a significant part of changes
and if it is not implemented effectively then it can affect the process of change. According to
Carlopio,” innovation is something that does not happen in a day as it takes series f phases to
finish the process of change. There should be some training and learning procedures for the
staff personnel who have involved n the change process so that they can become competent
enough to sustain the series f change until it achieves success. The inability to handle the
change effectively or lack f experience and knowledge in the implementing strategic change
may not be able to achieve integrated marketing and communication strategies.

Thus, in order to tackle all the issues regarding the negative responses, the company should
make sure that its staff undergoes the required training and development programs. The
training program should be planned in a way that it should provide a complete understanding
of the program to the staff. After the training, there should be a regular follow up to ensure
that all the members have understood and have sufficient information to support change.
The cultural issues can be another reason for internal conflict among staff members which
can bring problems in the association between the members in the organisation, leading to a
conflict within the company. McDonalds must understand and value the culture of the
employees and identify the issue that can be caused because of any conflict.

McDonalds should integrate authority in the system to increase the quality of the staff and the
time spent by them in the company. For this purpose, different incentive policies can be
launched which will, in turn, encourage employees. Along with this, the working
environment can be improved within the company so that employees can have a good time in
the company while working for it which will, in turn, also benefit the organisation.

For the change management to be successful, it is very important that all the stakeholders
should understand that the present change has been brought for the betterment of the
company and them. The management should continuously observe the current market trends
and also predict future scenarios so that it can prepare itself for the change which will be
required in the future for the success of the company.

According to Wilkins & Dyer, the management of the McDonalds must define its
empowerment culture and also identify the connection between the empowerment of the
culture and planned system of McDonalds.
Recommendations

The effective communication between managers and employees is the most crucial
component in the restaurant industry and plays a vital role in gaining success. Good hearing
skills are a must for a manager especially working in the growing fast food industry. During
the change, it is the responsibility of the professionals to give an ear to the thoughts and
opinions of the employees and if necessary, then modify the changes based on their opinions.
For executing a successful change in the organisation, it is mandatory for the director that he
should be aware of the reaction of employees towards the change. McDonalds Managers
should realize that customer delivery will get worse in case, employees are against the change
and do not want to co-operate with them. Disagreement can arise between managers and staff
when they resist change. As a consequence, it will directly affect the reputation of the
restaurant and might become a reason for the employees to resign. Before implementing the
change, McDonalds professional listened to a lot of fights of employees and a lot of time was
required to change the problem because a bad environment was created where employees
showcased the poor environment for work and in the end, all went for resignation. Hence,
they need to encourage the employees for better service which can only not help the company
to grow rather they will also grow at the same time.

There should be proper action required for the improvement of different customer services
and working environment within the company. This strategy motivates both managers and
employees to make sure that things are done in a proper manner. Everyone should understand
that improvement is only possible if a change is implemented. If there is no improvement
then the restaurant will not be able to sustain its position in the market and compete with its
rivals. Professionals should also provide a pleasing environment to their workers so that
employees can enjoy working because if they are happy then they will give high performance
and strong determination. Motivated employees can work in a better way and build a strong
relationship with their colleagues. However, if the environment is not good then it can have a
negative effect on the performance of its employees leading to the bad reputation of the
company. (A Paton, r. and Maccalman J., 2008)

It is difficult to foretell the success of the new changes in management because it depends
upon the attitude of the young generation and society. It is very difficult to transform from a
fast-food seller to a company that sells nutritious based food. There is a need for strong
marketing strategy and awareness programs for this and at the same time, management has to
make sure that the message is delivered to the audience. It is important that the changed
image of McDonalds should reach all 117 countries. Once this strategy becomes successful
then there are chances that people will start recognising McDonalds as a healthy food
provider rather than unhealthy and fattening.

In other words, innovation means the implementation of new ideas successfully in the
organisation. There are two types of innovation. The first one is technology-based innovation
and the other is demand-based. However, most of the innovations occur because of the
demand rather than the technology.

Innovation can be brought by performing constant research and development in the company.
Another way of bringing innovation can be to keep on improving the working practices of the
employees in their daily routine. The combination of knowledge and great work experience
can help to innovate the best way to do things. The essential innovations can only come from
research and development whereas incremental can only come through practice.
McDonalds needs to plan and implement changes very effectively. It needs to make sure that
its staff is professional enough to deliver the desired results with minimum resistance from its
internal customers. Then only there are good chances that McDonalds can transform its
image in the food industry from a junk food supplier to a health-conscious meal provider.

Conclusion

According to Drink (2003), “In order to match to Beverage, it is important for the
management leaders to have an eagle’s eye in the organisation and keep a track of all the
ideas which are working and which are not working if they really want that the change they
bring in the company should be successful. It is the prime responsibility of the professionals
to reassure, support and take dedication from the employees before implementing new
change, then only it is possible that positive outcomes can be delivered. The manager should
create strong strategies and implement them in a way that it will become successful.
Moreover, leaders must create an environment that is safe and support new changes in the
organisation.

Above all, it can be concluded that changes in management are good only if they enhance the
competitiveness and vivacity of an industry. If any change is implemented with proper
strategy and careful inspection then it will be effective and boost the performance of the
business. Therefore, companies should implement changes only when there is the right time
and if the studies show that there is no time of change then they should avoid applying it
because the change management system is not only critical but also hyper-sensitive so should
be implemented carefully. Any wrong decision can lead the organisation to face difficulties to
sustain in the market rather than developing and earning profits.

Thus, this is the strong suggestion for McDonalds that it should ensure that the changes
which are going to be implemented in the future must be done very carefully because these
changes can bring success or failure to the company.

References

· Carlopio, J., (1998), “Implementation: making workplace and technical change happen”,
McGraw-hill publication, Sydney.
· https://corporate.mcdonalds.com/corpmcd/about-us/history.html
· https://pdfs.semanticscholar.org/7c96/35f897ffd557ff6996c49ab34e2e3d326acc.pdf
· https://studybay.com/blog/leadership-and-change-management-at-mcdonalds/
· https://writepass.com/journal/2012/12/change-management-in-mcdonalds/