McDonald’s Case Study: Cross-Functional Collaboration and Organizational Culture.

McDonald’s Organizational Functions:

McDonald’s follows a divisional organizational structure. From marketing to sales, supply chain, restaurant operations, legal, finance, and HRM, the company’s operations are divided into various functional divisions (Pratap, 2020).

Marketing:

The marketing function at McDonald’s is responsible for activities that help the business churn demand and grow its sales worldwide. Marketing has always been a central focus area for McDonald’s. There is heavy competition in the fast-food industry. There are several major competitors of McDonald’s in the market like Burger King, Subway, and Wendy’s that offer similar products. Marketing is one of the most important functions of the organization. McDonald’s leading position in the industry is also a result of its focus on marketing. McDonald’s is a globally famous brand. The marketing personnel focuses on growing brand awareness and driving customer retention higher. They also work on creating and running campaigns through digital channels, Television, and social media.

Supplier Management:

Supplier management is also an important function at McDonald’s. It is critical for McDonald’s to focus on managing its supplier relationships so that the company can ensure a continuous supply of good quality raw materials. Apart from food and packaging, McDonald’s restaurants also source equipment and other inputs from thousands of independent suppliers. The focus of the supplier management function at McDonald’s is maintaining quality standards throughout the system. Apart from having quality centers around the world, the company has also established a Food Safety Advisory Council that looks after food safety concerns in the McDonald’s system.

Human Resources:

HRM is also a critical function at McDonald’s that ensures the employees are performing at their best. The company employed 205,000 people as of the end of 2019. The HRM function oversees employee recruitment, training, and other critical areas like performance management. Strategically managing its HR has enabled the company to grow its competitive advantage in the market. From store operations to other areas, the company has to ensure that its employees are performing at their best. This ensures superior organizational performance and customer experience.

Operations:

The company has divided its business on the basis of geographic segments. The US is the main geographic segment of McDonald’s. The international operations of the company are divided into two segments further. Apart from eight domestic McDonald’s subsidiaries, the company also has several international subsidiaries. The company operates its business mainly through franchisees. However, it also owns some company-operated stores that serve as a venue for operations training and innovation.

McDonald’s Organizational Structure :

McDonald’s follows a functional organizational structure that allows the company to run organizational operations efficiently. The organizations following a functional organizational structure categorize jobs and positions on the basis of similarity in functions like marketing, operations, HRM, finance, and supply chain management. While the organizational structure of McDonald’s is basically functional, it is a mix of regional and functional. The organization also runs its business on a geographical basis like global and regional operations. For example, Chris Kempczinski, who is the current President & CEO of McDonald’s used to be the President of McDonald’s US operations earlier.

Cross-Functional Interaction and collaboration at McDonald’s:

Cross-functional collaboration has become necessary to maintain organizational growth momentum across all industry sectors. At McDonald’s, the leadership maintains a heavy focus on cross-functional collaboration. It helps the company achieve performance targets and organizational objectives. The company is focusing on digitalization to grow the level of collaboration across various functions. Technology has become a key driver of growth for fast food businesses, which have faced several difficulties maintaining their sales during the pandemic. Amidst a nationwide lockdown, fast food brands like McDonald’s made changes to their operating model to serve their customers in the United States. During the pandemic, the need for cross-functional collaboration grew even more highlighted.

McDonald’s Organizational Culture:

For organizations of all sizes, culture is a fundamental driver of organizational performance and productivity. McDonald’s is a global fast-food brand. However, its global operations are driven by a central culture that focuses on customer service and customer satisfaction. Customer service is a basic tenet of McDonald’s organizational culture. Other major cultural values that dictate everyday performance at all levels of the organization include integrity and collaboration (McDonald’s, 2020). McDonald’s has differentiated its brand from other fast food businesses through a culture driven by positivity. Its culture promotes flexibility, opportunity, and development. These are some essential tenets of a modern culture that strives to deliver the highest customer satisfaction. They guide workplace behavior and key decisions throughout the organization (Pratap, 2020).

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