Management of Change: Macdonald’s Food Joint

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Image via Wikipedia

Be it the environment, the circumstances of life, associations, hierarchies, monarchies and political parties. Is it worked culture business and service.Even the attitudes of the human beings are prone to change from time to time. If one is rigid then the environment around that one, his friend’s circle, his bosses and acquaintances will but naturally change, in order to avoid a clumsy stiff necked rigid and awkward person, as one may be deemed to be.  Such a person is prone to be adamant, tactless and tremendously, as well as awkwardly, at stone in the progress, of not only his own career, but also the progress of an organization as a whole. Such people, irrespective of whatever level they may be operating at, but out of necessity are by passed by time, notwithstanding the fact that in the ultimate analysis they may be proved to be right. That is an acceptable irony, which we as a class of human beings have and have always accepted.It maybe noted that not for a single and remotely isolated moment, is it being expressed that one need not voice dissent or express ones’ personal considered views. But one should ultimately not prove to be a spoke in the field of advancement and managerial change, in the longer and larger interest of the business and organisation as a whole, so as to be able to participate in immediate success, no matter how so ever short lived it may appear.To that extent one must realize the circumstances and environment and basic needs of an organization and or business. One must not only accept to change but essentially change, to enable the furtherance of the cause of a body as an integral whole, even if one has to sacrifice ones own self comfort and position, in the over all and larger interest at that point of time.

This subject deals broadly and primarily with the change of management and managing systems, with particular emphasis, in respect of the world-renowned, fast food an American Company, MacDonald’s, which was started way back in 1937. It became a major food joint in the United States of America and initially was almost monopolistic in nature with a bulk market share, but has now given way too many other competitors, who have managed to cut a major slice of a cake, from a bigger one. Naturally in a competitive environment, the survival of the fittest will prove to be a foregone conclusion. Thus the organizing ability of the management and shareholders must essentially change, in order to enable a giant like McDonald to survive, after almost seven-decade supremacy, in the widening and expanding world market.

Resistance to change

During the course of ones life, serving in any organisation or business, one comes across a great deal of resistance to change. A human being is programmed to follow a set pattern of mannerisms; any disruption in that field is prone to bring about disaster so to say. So a hurdle or a stop in a routine way of functioning, even as much as changing a daily route or mode of transportation to work appears and acts as a great impediment to a days’ working pattern. So if an organisation has to bring about a radical change in its management, then it should not do it over night. The organisation and management, particularly the higher job and Key personnel, to include the CEO, must gradually educate the employees and Unions. Take them into confidence and then slowly enforce the much-needed change. In this way the obstinate worker, will be an isolated one and could perhaps be tackled very easily and or be totally ignored, which will automatically bring him in line with the changing scenario.

This is a major task awaiting our role model business, MacDonald, which has already lost much of its sheen, in the American market that it had enjoyed over the passed so many decades. The changing environment, opening up of more stores around the globe, improving its brand, examining the product range, to suit the local needs and environment are matters, which need immediate attention. People do not prefer to continue to eat a solid big boy burger only, some like to have a complete vegetarian meal kind of a lunch. Also mostly people like chicken and more like it a bit wetter than the dry burger offers.  A variety of sauces, including ketchup, adding up a variety of chips in a varied forms and or designs, like varying its shape and size as well as its taste, may also fare well with a modern changing teenage population.Many people will still go out of their way, to eat at a midday meal at a preferred joint, than try the salami at the next-door cafe. A variety of drinks, ice creams and local, drinks will cater to the needs of the local clientele. In other words an examination of the local area, local population, local situation, convenience of parking and such like added facilities, will go a long way to revive the business, which is facing tougher competition from local, may be even much smaller vendors in the field of fast food.Today’s trend no longer remains accentuated towards fast food, which in the present day parlance is better known as junk food. The basic product of McDonald, which has been the burgher, needs change including its presentation; in perhaps more attractive tissue packing with comic faces on the tissue to make it more attractive to the younger kids. It is a matter of common knowledge, that children are more intrigued by pictures and toys and playthings rather than the food alone. It is here where the management must explore the ways and means of entrapping, or attracting the kids’ interest, as most people going to McDonald are generally young kids, teenagers or those with a limited budget. A handy make shift carry home bag, could also be introduced for ladies, who may like to take some burghers home, for those who could perhaps not accompany them. A drink or fresh fruit juice could be introduced, to enable one to order another big, middle or a mini burgher. So many kids would prefer a chocolate ice cream, along side in the meal.

It is for any management to see and study the needs of the visiting customers and make it more attractive for their second or continued visits, as they spread the word of the trademark burgher around. The eyes and ears of the management need to be exercised in order to bring about effective improvement and change in the environment and approach of their customers. Thus change in any business forms the basis of profitability, instead of continuing to tread the beaten path, this some how is still appears to be lacking in our subject organisation, MacDonald, which is at the core of this study.  

Fordism 

At this juncture it will be essential for any management envisaging change and managerial staff, to learn about the most efficacious management known as Fordism, which brought about the management of change, in the USA without compromising its brand.The aspect of Fordism is the basis of all industry in the United States, as it encompasses many aspects of modern management, as applicable to perhaps any conceivable industry round the globe. The foremost aspect of Fordism is to make workers as participants in any enterprise, by making them benefit directly and or indirectly. This can be achieved by increasing workers wages, permitting them the buy products at reduced costs and shares in the company. Thus benefit directly in so many other ways, which would indirectly or directly make them interested participants and thereby improve upon the production, as well as profitability of the organisation they belong to.

Ford also used many creative and innovative ideas to bring about a radical change in his organisation, by centralization, standardization, economizing effort and improving the financial capability of his concern. Increasing mass production and mass consumption, even in house, helps in circulation of money and aids in a higher rate of economical efficiency. The aim of all this is to also reduce overheads in production and consumption, costs of carrying material and finances are also considerably taken care of. Total quality management, less involvement of many leaders or supervisors, helps in reducing cost as well as affords better inventory management as highlighted earlier, i.e. costs of holding and carrying forward a larger inventory.

On the consumption side, it ensures faster sales and quicker recovery efficiently, thus reduction in high rates of interests and fines, on account of delays are also taken care of. These innovative ideas lead to what is best known as Fordism. Thus America benefited to a great extent in the mid 1940’s 1960’s.The automobile industry in the United States had taken care of reviving the economy of the country at a fast pace, at that point of time.

What then is Fordism?

 It is a system of mass production, as well as simultaneous mass consumption, with a view to promote the economy at a faster pace. This system also smacks as a Japanese system of, ‘Flexible System of Production.’

Or the Japanese Management  System of Economy.

Fordism brought about a mass change in the auto industry by way of thought, the way of life, the manner of working and concentrating all activities by standardization and centralization and thus spreading mass overheads to a larger quantum of production of goods. Standardization of products and mass central production, avoidance of repetition and most importantly centralized production were the major contributions of Fordism.

Explicitly speaking Fordism means:

 ‘‘The standardization and mass production of products, at such a low price, that even a common man can buy and afford it, as well as enjoy the product and or service.’

                                                      Brief history of MacDonald’s

MacDonald’s was started way back in 1937 in the United States of America. In the initial stages it served by selling hot dogs. Later as it continued to evolve, it changed its philosophy to ‘‘What ever people eat we make. to sell’.’  All worldwide customers desire quality and delicious taste. One did not mind going out of ones’ way to reach a desired eatery. So wherever there was a MacDonald, guys and girls would drive down to their favourite joint. But today there are so many competitors, that even if a MacDonald is nearby, people may not like to visit it. Therefore there is a grave need to change the mindset of the present day customer. McDonald must, as also as it is now focusing on these issues, in order to afford better service, playthings for children and caters for birthday parties. This is an added value to the brand, we know as McDonald.  But one is not just satisfied with all types of burgers. One needs to eat all types of vegetarian menus. Egg less pastries and cakes and drink cold lemon tea. The world today is no longer fixed to potato or fried chips lunch or snack alone, and the concept of one time fast food, is giving way to a more complete and satisfying meal. That is what McDonald must now address itself to. salads, drinks, local drinks, like curd milk and chocolate milk too, will give way to one time, only fried dry chicken junk food.   

During the early forty’s when MacDonald had introduced a variety of burghers, in the USA, the trend in that country was dependent on wayside and car flaunting customers’ tastes. The market share of MacDonald’s was almost monopolistic. Over a period of time as newer entrepreneurs came forth, it was but natural that the profitability of the brand would fall and could not be sustained in a handful of old and trusted customers.  But McDonald did not view this cutting in, as disastrous and continued with its genetic mind set managers, who continued to maintain that as long as they stayed with Macs, the company with its initial base product would continue to flourish. The rigidity of mind and not awaking to change further continued to erode the market shares of McDonald, and the over all market share value naturally fell.The fall in its market image and obstinacy of the managerial staff that continued to be averse to change saw other similar food companies flourish, at their cost and remained oblivious to possible future disaster. Many other companies diversified and also brought in managers from similar sister concerns and thus advanced leaving this brand down the road. The trends of food habits among Americans also changed and as more and more people migrated into USA and Canada, a variety of foods were introduced. Even smaller businesses flourished, while Mac continued to remain adamant in its policy of no change and held the hands of its minuscule old timer managers, who let out more joints as a franchise and opened many more way side McDonald stores.

Though the brand continued to survive, but it had clearly lost it glamour and hold. Many school staff and teachers took children and friends to Mac joints, but rarely ate or enjoyed the once savvy burgher. The tastes also changed, as many people had brought in different food tastes and varieties. The eating culture amongst the Americans also changed from a stereotyped burgher, to an almost full meal. Macs’ slight modification in the menu, retaining its original basic food, also did not bring about the desired results. The family has had a history of claims and since the managerial system remained stiff, as before and did not want to adapt to changing habits and environment, the marketability naturally continued to decline. There after in order to maintain its core product, they desired to move out of Russian and London kind of bases, to the Asiatic countries. It is now learnt that India is a big anticipated destination, where some in roads have already been made. MacDonald wants to maintain its genetic pattern of its culture in its old based food culture, as a new system, in these low cost countries.

The investment in the overseas markets too however has not been as remarkable as the Mac thought. The age-old genetic management must essentially give way to a more rapid and desirous trend of inevitable change. Instead of blaming the media, the growing company must do a soul searching, in order to restore its past glory. That only a newer management and managerial change, will spell out as a matter of time.It will be prudent for the brand MacDonald, managerial management of today, to shed its age-old inhibitions and adapt new changes, in accepting the fact that change is inevitable. But the management must essentially, continue its working in keeping with modern times. Now that MacDonald is spreading its wings in foreign lands, in a big way, they must also inject a newer philosophy. The foreign invasion perhaps may be a manner of sustaining its originality, in the line of maintaining its core product, the burgher, but the management must also realize that in foreign countries, such as China and India, other brands as well as local brands, of food chains, have already taken a firm footing.

It will therefore be prudent for the organisation to plan its forays, well looking into the far future, where in it will retain its scope of expansion. In bigger cities like Hongkong, Shanghai, Beijing, Delhi, Bangalore, Bombay and Calcutta, they may examine future scope of expansion into the satellite towns, arising near central markets in these capitals, as they root in at the present. A bit of operation research in the environment and the field of growing population is likely to pay dividends. Initial investments, keeping long term plans in mind, may prove to be a long-term benefit.MacDonald’s’ must apply, the principles of ‘Fordism’ to a great extent, in centralizing as well as spreading their brand in these newer cities, into the far future folds of times.  As every thing must change, so also the food habits in these so called emerging, if not backward countries, is also changing very fast. Particularly when the women folk in these two specific countries, are no longer confined to their old kitchen habits. The quality and not the quantity of food, as well as its variety, in keeping with a complete meal concept, is the main stay. People like local foods and then induction of dry burghers, chicken and non-vegetarian as well as vegetarian burghers, alone, may not appear to be as lucrative, as they may tentatively appear to feel. Newer methodology and environmental, as well as local needs and cultures, will need to be examined with a view to sustain themselves in a world, with competition as its only enemy, in a growing market, around the globe. Not only that, but the brand has to face the local market, from a cost point of view also, in order to make themselves worthy of the enterprise.

The right type of people, at the right place, at the right time, and making the very right decisions, will be of utmost importance, The new CEO’s and managerial staff, should be inducted from the western world, as also the local population must be engaged, in order to meet a competition squarely. Macdonald has a good name in some quarters of these countries and it is left to the age-old genetic managerial system, to have a mindset and change its age-old archaic concepts. They must and will necessarily have to and accept change, as an inevitable part of any culture, albeit without compromising its brand, which is well known as the Big Boy MacDonald burgher.  Perhaps newer names and presentation of the brand ,may go well with newer teenagers in these two developing countries.