Q. 2. [a] (i) What is meant be the term ‘on the job training’? (2 marks)
Q. 2. [a] (ii) Briefly explain two reasons why training might be important to McDonald’s. (4 marks)
Q. 2. [b] With reference to motivational theory, outline two ways in which McDonald’s attempts to motivate its employees. (6 marks)
Q. 2. [c] Examine the factors that one of McDonald’s general managers might need to take into account when planning for future workforce needs. (8 marks)
Q. 2. [d] McDonald’s operates a centralised organisational. To what extent might this prove beneficial to the company? (12 marks)
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A. 2. [a] (i) This is instruction or training at the workplace on the way in which the job should be carried out. This is sometimes done by being given instructions on how to carry out the necessary tasks as you are actually doing them. Another method involves observing an experienced operator performing the tasks (sitting next to Nellie!). In McDonald’s, the use of the ‘buddy system’ is a form of on-the-job training.
A. 2. [a] (ii) Training of the workforce at McDonald’s is likely (according to a number of motivational theorists, such as Herzberg) to lead to greater employee job satisfaction (or motivation). This could lead to a number of benefits to McDonald’s, such as improved performance and labour productivity (trained workers are likely to be more efficient), reduced rates of labour turnover – and thus reduced recruitment costs (as the firm gets a better reputation among those looking for this type of work), – the attraction of higher calibre job applicants (due to the firm’s improved image in the labour market), and improved customer service (as well trained and motivated staff are likely to provide better customer service). Taken together, such benefits are likely to reduce unit costs and increase sales turnover, thus allowing McDonald’s to become more competitive and increase its profits.
A. 2. [b] In the data given, Julie Room is quoted as saying that ‘the promotion prospects are good, with 80% of the senior managers having started as crew’. This ties in neatly with Herzberg’s ‘motivator-hygiene’ theory of motivation, which recognises the possibility of promotion as being one of the motivating factors.
Crew members being given a ‘star’ when they have achieved a particular competence can also be considered to be a motivator – recognition – in Herzberg’s two-factor motivational theory. In addition, as the data makes clear, the staff consider it an achievement to be awarded a star – and achievement is yet another motivating factor according to Herzberg.
In terms of Maslow’s ‘hierarchy of needs’ motivational theory, the ‘buddy system’ employed at McDonald’s can be seen as providing ‘social needs’, the awarding of stars can be seen as providing for ‘esteem needs’, and (for those employees who progress to senior management level) the opportunity to run their own operations with little direction from the head office could be seen as providing the possibility for achieving ‘self-actualisation’.
A. 2. [c] A realistic starting point for one of the general managers of McDonald’s would be the corporate aims and objectives of the McDonald’s group – as targets for individual restaurants would need to be ‘in line’ with these.
Future workforce needs would obviously necessitate forecasting changes in consumer demand – both in customer numbers and also in customer needs, so that the restaurants will know how many staff they require and what skills they require from their staff. The extent of necessary recruitment also depends on the expected labour turnover of the restaurants and the amount of job re-training that can be undertaken.
Possible changes in working practices could also have a marked effect on future workforce planning, as could the activities of competitors in the market place. Changes in the macro economic picture will affect the number of customers that the restaurants are able to attract and the costs of employing staff. Finally, societal changes could also affect the number of customers and their requirements (e.g. the effect of the ‘foot and mouth’ epidemic on the turnover at McDonald’s U.K. restaurants generally).
A. 2. [d] There are advantages and disadvantages to McDonald’s of having a centralised organisational structure.
Senior managers have more control of the business and are thus able to pursue the company’s corporate objectives more easily. Purchasing and advertising can be carried out centrally, thus enabling the firm to benefit from possible economies of scale (this will help to reduce the unit cost of production and give the individual restaurants a competitive differential advantage in their market place).
Sometimes it is necessary to make a decision that will be of benefit to the group as a whole, even though it is detrimental to a small number of individual restaurant outlets. Such decisions will be easier to make under a centralised organisational structure than under a decentralised one.
It is possible that the senior managers, as most have ‘risen from the ranks’, represent the ‘brightest brains’ in the company. It could therefore make sound commercial sense for these senior managers to make the important strategic decisions for the company – and this they can do under a centralised organisational structure.
There is inevitably a huge burden of responsibility placed on senior managers under centralised organisational structures, and it is all too easy for this burden to become too great. When this happens the effectiveness of the senior management and the quality of their decision-making is reduced.
Job satisfaction throughout the organisation (with the exception of the senior management team at head office) is severely limited by centralised management and this can lead to motivational problems at the individual restaurant outlets.
Centralised management necessitates a ‘one policy suits all’ approach, which may not be valid in many cases, where local differences need to be taken into account in decision-making. Centralised decision-making marginalizes local factors – often to the detriment of the company.
Centralised decision-making is of necessity bureaucratic and inflexible. Instructions can become somewhat blurred as they are transmitted down the ‘chain of command’, and the organisation can become unable to respond rapidly to changing market conditions.
It is also difficult to recruit senior managers from within the organisation as a centralised organisational structure means that middle managers have not been give the opportunity to demonstrate their strategic decision-making skills.
In conclusion, though it is tempting to say that the flexibility and localised knowledge that comes from a decentralised system is preferable, I would have to say that in the case of McDonald’s, where a ‘chip’ in any McDonald’s restaurant must taste exactly the same as a ‘chip’ in any other McDonald’s restaurant, and the ‘customer experience’ must be the same in all their restaurants, the most logical organisational system is indeed a centralised one (even with its drawbacks).