Global comparative Management

American (U.S) Management

Foundation University Rawalpindi Campus

Presented to : Miss Hina Afandi

Presented by: Rehab Butt

Hassan Tariq

Umair Tariq

Osman Ahmed

Flahta Bin Rashid

Syeda Kanwal Noreen

Date : 4st January, 2015

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Dedication

This report is dedicated to our nation, who has given us multiple resources and platform to lavish

our skills and work for its prosperity. Furthermore we would like to dedicate this to our teachers,

without their consultancy we would not be able to finish this report.

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Acknowledgment

Words will never be able to express enough my fervent gratitude to almighty Allah, the most

compassionate and merciful, for giving us the courage and fortitude to accomplish this gargantuan

task. We are the Holy Prophet’s Hazrat Muhammad (Sallalah-al laho alihaewa ale he wasallam)

Ummah and we acknowledge that the Holy Prophet’s (Sallalah-al laho alihaewa ale he wasallam)

moral and spiritual teachings have enlightened our heart and mind and have guided our thoughts

towards new horizons enriched with great ideas of life. We are undoubtedly indebted to

Miss Hana Affandi who has been our mentor and thanks for her kind supervision, valuable

suggestions and moral support throughout our project. We are highly impressed by her intellec tua l

activities and inexhaustible energies used in steering forth the students.

We must take this opportunity to appreciate efforts and co-operation of our fellow students and

friends whose constructive suggestions made it possible for us to conduct this project. We extend

our thanks to all of them for their helping hand whenever needed. Once again words fail in

expressing our thanks to our families, whose hands are always raised in prayers for our success.

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Contents

Dedication ....................................................................................................................................... 2

Acknowledgment ............................................................................................................................ 3

Executive summary......................................................................................................................... 6

Introduction ..................................................................................................................................... 7

Intro to McDonald’s.................................................................................................................... 8

MacDonald’s in Pakistan ............................................................................................................ 9

The U.S Macro Environment .......................................................................................................... 9

Political and legal System ........................................................................................................... 9

Comparison with Pakistan. ....................................................................................................... 11

The Economy ................................................................................................................................ 12

Economic Aspects of McDonald .............................................................................................. 12

Culture........................................................................................................................................... 13

Language ....................................................................................................................................... 14

Religion ......................................................................................................................................... 14

American Culture ...................................................................................................................... 14

McDonald’s organizational culture ............................................................................................... 14

Formal Education ...................................................................................................................... 14

Management as Profession........................................................................................................ 15

Managerial Mobility ................................................................................................................. 15

Gender ........................................................................................................................................... 16

Gender at McDonald ................................................................................................................. 16

Pay Scale ....................................................................................................................................... 18

Career path USA ........................................................................................................................... 20

Opportunities at McDonald's ........................................................................................................ 21

Career PK .................................................................................................................................. 21

Trainee Manager ....................................................................................................................... 21

International experience ................................................................................................................ 22

Planning .................................................................................................................................... 24

Organizing................................................................................................................................. 24

Frequent Organizational Change .............................................................................................. 25

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Directing.................................................................................................................................... 25

Control ...................................................................................................................................... 26

McDonald’s Operations Strategy.................................................................................................. 29

McDonald’s operations strategy in India .................................................................................. 31

Think Global Act Local ............................................................................................................ 31

Local Management.................................................................................................................... 31

Political Sensitivity ................................................................................................................... 31

Environmental Friendliness ...................................................................................................... 32

System and Process Standardization......................................................................................... 32

Pricing Strategy......................................................................................................................... 32

Growth Strategy ........................................................................................................................ 32

Conclusion .................................................................................................................................... 33

Discussion ..................................................................................................................................... 34

Recommendation .......................................................................................................................... 35

References ..................................................................................................................................... 37

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Executive summary

According to the World Economic Forum’s 2014-15 Global Competitiveness Report, the United

States has the third most competitive economy in the world. (The U.S. ranked fifth in 2013-14.)

The policies of the United States of America comprise all actions taken by its federal government.

The environmental policy of the United States addresses and regulates activities that impact the

environment. Its general goal is to protect the environment for the welfare of future generations.

People in the United States come from many different homelands. They have a variety of customs,

traditions, and foods. They do share many of the same values, though. U.S. citizens care about

individual freedoms, equal opportunities, fair treatment of people regardless of differences, private

ownership of property, and education. Many of these values help define America. However the

United States interacts with foreign nations. It addresses the security of the American people and

promotes international order. The United States of America is the world's largest national

economy, representing 22.4% of nominal global GDP and 16.6% of global GDP (PPP). The U.S.

dollar is the currency most used in international transactions and is the world's foremost reserve

currency. The United States has one of the world’s largest and most influential financial markets.

The New York Stock Exchange is by far the world's largest stock exchange by market

capitalization. The U.S. is ranked 2nd out of three countries in the North America region, and

although its score remains well above the world and regional averages, it is no longer one of the

top 10 freest economies.

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Introduction

In the 20th century, the United States emerged as a mecca of management theory, practice,

consulting, and research. Nowhere else was management so widely viewed as a unique, vital

function and an academic and professional discipline? Early on, productivity engineer Frederick

Winslow Taylor (1911) wrote Principles of Scientific Management, which can be called the

world's first book focused on management. Other path breaking manager—authors included

Chester Barnard, CEO of New Jersey Bell (Functions of the Executive, 1938), and Alfred Sloan,

who led General Motors between 1923 and 1946 (My Years at General Motors, 1964).

Management doyen Peter Drucker called the latter "the best book on management ever" (1990, p.

145). The United States produced the first large management consultancies (e.g., Arthur D. Little,

McKinsey & Co.), executive recruiters (e.g., Korn/Ferry, Heidrick & Struggles), buyout equity

firms (Kohlberg Kravis Roberts, Forstmann Little & Co.), and merger and acquisition specialists

(investment banks such as Goldman Sachs and Morgan Stanley). It bred corporate business schools

(e.g., General Electric's Crotonville Institute, IBM's Sandpoint School, and Motorola University).

Today, management books and articles abound and U.S. business schools draw professors and

students from around the globe.' Meanwhile, prominent American firms dominate global rankings

of the most respected companies.'

Trade policy initiatives (e.g., the creation of the North American Free Trade Agreement, General

Agreement on Tariffs and Trade and World Trade Organization trade negotiations, and acceptance

of China into the World Trade Organization).

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Intro to McDonald’s

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,

serving around 68 million customers daily in 119 countries across 35,000 outlets. Headquartered

in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and

Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production

line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He

subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself.

McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees,

as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual

revenues of $27.5 billion, and profits of $5.5 billion. According to a 2012 report by the BBC,

McDonald's is the world second largest private employer (behind Walmart) with 1.9 million

employees, 1.5 million of whom work for franchises.

McDonald's primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, soft

drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has

expanded its menu to include salads, fish, wraps, smoothies, fruit, and seasoned fries.

McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the

description "Drive-In Restaurant Services", which continues to be renewed through the end of

December 2009. In the same year, on September 13, 1961, the company filed a logo trademark on

an overlapping, double-arched "M" symbol. The overlapping double-arched "M" symbol logo was

temporarily disfavored by September 6, 1962, when a trademark was filed for a single arch, shaped

over many of the early McDonald's restaurants in the early years. Although the "Golden Arches"

appeared in various forms, the present form as a letter "M" did not appear until November 18,

1968, when the company applied for a U.S. trademark.

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MacDonald’s in Pakistan

McDonald's 15 In Pakistan, there are two setups. First is for Punjab and NWFP, and this are headed

by Mr.Ghous Akbar (CEO), while the second region Are Sindh and Baluchistan and CEO for this

region is Mr. Amin Muhammad Lakhani. Below them are the directors and the general managers.

Every department has its own director like director finance, marketing, management etc. Every

outlet has its own has its own operation managers. They use several levels of supervisors who then

direct the workers. There is a high need to be familiar with the work which now they are managing

Finance department is headed by GM finance; all the financial activities of each and every outlet

are under his command. The import and exports of ingredients and other necessity objects of the

company are also made under the command of GM finance. Marketing department is headed by

GM marketing and development. Marketing managers work under him and under them are

associates and marketing executives. GM is directly related with the managers who then forward

his instructions to the executives. The marketing executives and associates are directly answerable

to the managers.

The U.S Macro Environment

Political and legal System

The U.S. government and political system are grounded in, democracy, pluralism, and the rule of

law, striving to balance the civil) 1) political, and other liberties of diverse constituents (e.g.,

business, consumer, employees, investors, workers, taxpayers, and public interest groups). An

aggressive legal profession and inquisitive independent journalists keep managers alert to

prevailing ethical standards, law, and the public inter-est. For business, government has been

neither close partner nor adversary, offering less financial support than do other advanced

industrial countries (except for the defense sector). There are few government-owned businesses.'

Antitrust and investor and consumer rights rules are more forcefully protected than in most

countries, as are individual civil rights in the workplace. There is more extensive disclosure of

financial information by publicly held com-ponies, required by the stock exchanges and securities

market regulators. The political voice of business is expressed through company public affairs

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offices, sponsored research groups, paid lobbyists, sectorial trade associations (e.g.,

Semiconductor Industry Association, Textile Manufacturers Institute), and broader spokes groups

(e.g., National Association of Manufacturers, Business Roundtable, Conference &did, and the U.S.

and local chambers of commerce). These groups aim to inform and influence public officia ls,

legislators, voters, the media, and others about pending legal and regulatory change. The politica l

views of business are not uni-form and can vary by sector, size, location, and other factors. For

example, the textile industry has regularly sought protection from import competition, whereas

most electronics firms haven't. Big steel wants restrictions, whereas small steel (mini-mills),

specialty steel (niche steel makers), and steel buyers (machinery makers and car companies) are

less likely to do so. Although trade protectionist pressures regularly surface in Congress (especially

in the House of Representatives), proponents of freer international trade have generally prevailed

over protectionists on most major

Major trade policy initiatives (e.g., the creation of the North America .Trade Agreement ,general

agreement on tariffs and trade and world trade Organization trade negotiations, and acceptance of

China world Trade Organization).

Other broad features of U.S government and politics are listed below:

Long-standing constitutional democracy that tries to balance tt-if legislative, and judicia l

powers of government.

Arm’s-length relationship between business and government.’, neither professional nor

adversarial less corporate welfare - (subsidies, bailouts, .preferential purchases) than in

other advanced industrial countries.

Orderly political succession; low political risk for business ground rules don't change

without extensive debate and deliberation.

Political pluralism accommodates diverse viewpoints and 'interests such as consumer,

labor, environmentalist, business); leading business spokes groups includes the Business

Roundtable, Business Council, National Association of ,American Business Conference,

Chamber of Commerce of the USA, National Federation of Independent business, National

Small business associations and many small sectoral trade associations.

Common law legal tradition (roots in the English legal tradition)

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Adversarial legal framework; proportionally more lawyers an countries; high incidence of

class-action lawsuits; than in most countries ;high incidence of law suits; stiff negligence

liability penalties (trot law)

Much business law is the domain of state and local government rather than national

(federal, central) government; aggressive federal (central) government protection

aggressive individual civil rights in the workplace and for free and fair competition

(antitrust rules).

An independent and active corps of press and television journalists keep public officia ls,

politicians, and business leaders alert to ethical and responsive behavior

Less extensive and less intrusive federal labor law than in most countries; fewer legal

restraints on laying off employees for economic reasons; more protection for equal

opportunity in the workplace.

Political clout of unions has been weaker than in most advanced industrial countries.

Though mainly adversarial; union’s management relation are much less confrontationa l

than in the past.

Less unionized workforce than most countries; in 2008, about 12% of wages and salary

employees were union members (vs. 36% in 1983) and less than 'Private sector fewer labor

disputes than in most other advanced industrial countries

Comparison with Pakistan.

As compared to U.S the political situation of the country is very unstable. The frequent floods,

mobs, rallies and suicide bombing has a really bad effect on the economy of the country. Many

business are affected under this. Some have the ability to survive while others go completely

bankrupt. Not only has this but the war in its neighboring country Afghanistan has made the

situation evened more worst. Foreigners have stopped investing because of this. They see no future

of their organization in the country.

Legal system is even worse. There are laws but there is no proper institution to oversee the

fulfillment of these laws. The corruption level of police and politicians is too great. Taking benefit

of this fact many big organizations including small ones have very harsh and low income jobs and

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wages. If there is an even slight idea of discrimination or the employee working environment not

healthy the organization can be sued and demanded changes in United States where as in Pakistan

institutions can be simply bribed into giving the decision in their favor. Organizations may have a

cost effective pay system as compared to their home country standards but ethically these might

The Economy

The U.S. economy is based predominantly on private property and initiative; its internal markets

for labor, goods, and capital are freer t those in most of the world.' It generates about one fourth of

the annual gross world product with one twentieth of the world's workforce. Job creation and

destruction have been high. Government taxation and spending’s have been lower relative to

national income than in most advance industrial countries. I.e. 33.1% of total Government

expenditures and 36.6% of Total Government revenue in United States.

Economic Aspects of McDonald

McDonald is a multinational fast food chain which has its headquarters in United States. Like any

other business organization it is affected by economic issues prevalent in the host country.

McDonald’s, the largest fast-food chained, has been known for the ability to increase its profit

even in rough economy. However, in year 2013, McDonald’s officials informed that the company

was facing consumers’ confidence issues. It all started in Southern Europe, which had been most

affected by the economic crisis; but consumers’ confidence issues became known world-wide.

McDonald’s anticipated and took corrective measures. Since then the sale figured had increased

every month.

McDonald’s growth in rough economy is owed to its highly professional CEOs. They reinvented

the most known burger chain, remodel location as well as add new menu option have been main

reasons for out-pacing its rivals, Wendy’s and Burger King. The healthy changes to the menu was

an answer to the rise of chains. The company had put more pressure on marketing and promoting

its values.

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The bad economic situation in Pakistan has not affected McDonald revenues. McDonald targets a

specific segment of the society which is generally not affected by poor economic situation in the

country. McDonald is also contributing towards economy of Pakistan by providing employment

opportunities to hundreds of people. It depends on raw material which is mostly provided by

Pakistani suppliers and thus it also contributes positively towards economy of Pakistan.

One of the reasons that poor economy of Pakistan has not affected McDonald’s business in

Pakistan is the effective marketing. In most of its outlets it has gaming areas for children which

attracts the families to come frequently to its outlets all over Pakistan. McDonald has also

introduced different types of deals which suits all the segments of its target market. Quick home

delivery is another aspect that poor economy of Pakistan has not affected McDonald’s business in

Pakistan.

McDonald being an economic giant has contributed significantly towards the economy of Pakistan.

It is one of the biggest tax payer of the Country and by providing employment opportunities, a

healthy environmental outlet it has helped Pakistan to grow its economy.

Culture

American culture encompasses the customs and traditions of the United States, includ ing

language, religion, food and the arts. Nearly every region of the world has influenced American

culture, as it is a country of immigrants, most notably the English who colonized the country

beginning in the early 1600s. U.S. culture has also been shaped by the cultures of Native

Americans, Latin Americans, Africans and Asians.

The United States is sometimes described as a "melting pot" in which different cultures have

contributed their own distinct "flavors" to American culture. Just as cultures from around the world

have influenced American culture, today American culture influences the world. The term Western

culture often refers broadly to the cultures of the United States and Europe.

As the third largest country in the word with a population of more than 315 million, the United

States is the most culturally diverse country in the world. The Northeast, South, Midwest,

Southeast and Western regions of the United States all have distinct traditions and customs. Here

is a brief overview of the culture of the United States.

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Language

There is no official language of the United States, although 31 of 50 states have made English their

official language or given it exceptional status. More than 90 percent of the U.S. population speaks

and understands at least some English, and most official business is conducted in English.

While almost every language in the world is spoken in the United States, Spanish, Chinese, French

and German are among the most frequently spoken non-English languages. Each region of

the United States, in particular the South, has its own spin on the language with unique

pronunciations and phrases.

Religion

Nearly every known religion is practiced in the United States, which was founded on the basis

of religious freedom. More than 75 percent of Americans identify themselves as Christians. About

half are Protestant, about one-quarter are Catholic, and a small percentage are Mormon. After

Christianity, Judaism is the second most-identified religious affiliation, at about 1.4 percent of the

population. About 20 percent of the population has no religious affiliation.

American Culture

Clothing styles vary by region and climate, but the American style of dressing is predominantly

casual. Denim, sneakers and cowboy hats and boots are some items of clothing that are closely

associated with Americans. Ralph Lauren, Calvin Klein, Michael Kors and Victoria Secret are

some well-known American brands. American fashion is widely influenced by celebrities.

McDonald’s organizational culture

Formal Education

Senior manager in large U.S companies have substantially more formal higher education than does

the general public. In 2007, about 10% of the U.S population over age 25 held a master degree or

higher, compared with 67% of fortune 500 CEOs. Ninety eight percent of the latter held bachelors

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(in diverse principles but above all in engineering (21%), economics (15%), and business

administration (13%)). For post graduate degrees the MBA was the most prevalent (40%),

followed by law degrees (10%).

Management is more widely accepted as an academic discipline in the United States then

elsewhere. Now where else has not there been so much higher education for business nor so much

of it linked to universities. In 2004-2005, about one-fifth (22%) of the 1439264 U.S universit ies

undergraduate degrees and one-fourth of the 574618 masters degrees were in business or

management. Formal higher education for business and management evolved more slowly in

Europe with enrollment there lower than in the United States, but growing.

Management as Profession

The perception of management as profession is more evident in the United States than elsewhere.

A profession typically is a career field with a well-established body of knowledge, requires

certification of mastery and often has a profession bound code of ethics. By these criteria

management isn’t a true profession. Managerial professionalism is also reflected in the high

mobility of U.S managers between employers.

Managerial Mobility

If you look at the resumes of 28-30 years old today, they have got three jobs listed already. Ten

years ago someone with three jobs was a job hopper. Today someone who is 30 and has had ten

years with one company, you ask if they are too conservative.

In theory a component manager could lead any organization, and it unusual for seasoned U.S CEOs

to change employers. Many Fortune 50o CEOs have held similar posts as two or more companies

and some at three or more.

External hiring has become increasingly common in tandem with shortening CEO tenure. In

fortune 500 companies externally recruited CEOs reached a record high 43% of the total in 2005,

up from 34% in 2004. In the S&P 500, 40% of new CEO hires in 2005 were external hires.

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Before 2001, U.S CEO Succession turnover was higher than in Western Europe but they have been

roughly equal since 2002. Their turnover rates have been lower than those in Japan because CEOs

there are much older when they attain their positions and thus have less opportunity for long tenure.

Gender

In United States the recruitment process is based on professional lines. While recruiting no

importance is given to gender or no gender biased policy is adopted. Women folk are generally

employed at the reception and at the point of sales. It is to give an attractive reception to its

customers. This is not being gender biased but it capitalizes on the outlook. CEO majorly are males

but Ratio of female corporate owners are rising mark ably since late 90’s.

Gender at McDonald

1. Gender has been an issue which has been given a great importance both at United States

and Pakistan as it is elsewhere in the world. There is no differentiation once it comes to the

employment at McDonalds outlets.

2. In United States the recruitment process is based on professional lines. While recruiting no

importance is given to gender or no gender biased policy is adopted. Women folk are

generally employed at the reception and at the point of sales. It is to give an attractive

reception to its customers. This is not being gender biased but it capitalizes on the outlook.

3. Crew Members are the core team members always ready to serve the customers on the

floor with a shining smile unique with the services. This job is offered either as a Delivery

Rider or a Crew Member with a flexible work schedule (Part or Full time) as per your

availability. The fun & enthusiasm prospect apart from extensive learning will make you a

key member of the team serving our customers. Starting your job as McDonald's Crew is

a great learning opportunity because a sizeable percentage of our management today has

started their jobs as a Crew Member initially and the growth & development prospects of

the job has led their way to McDonald's Management. In all these aspects no gender bias

is shown.

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4. In Pakistan also no bias is given to gender. Today McDonald has strength of

about 2200 people who learn tremendous things. The best part of working with

McDonald’s is that one isn't just delegated to do some work, but he/she also gets

complete autonomy - that is what makes one entrepreneurs. In all this

phenomenon no bias is given to gender. The training is scheduled in such a way

that men and women folk get training together, the gain of more and more

excellence.

5. In Pakistan also no bias is given to gender. Today McDonald has strength of about 2200

people who learn tremendous things. The best part of working with McDonald’s is that one

isn't just delegated to do some work, but he/she also gets complete autonomy - that is what

makes one entrepreneurs. In all this phenomenon no bias is given to gender. The training

is scheduled in such a way that men and women folk get training together. In USA the

masculinity is low as compared to high masculinity in Pakistan. In USA the emphasis on

relationship and they work as team. Ladies staff generally remain on forefront as compared

to Pakistan where the relationship is not very cordial and male staff generally given a

dominant role to play. At McDonald in USA in case of conflict arising within the staff or

with the customers are solved through negotiations as against Pakistan the conflict within

the staff and particularly with the customers are solved in a non-friendly manner. In

Pakistan at MacDonald the wage gap between men and women is high and in USA the

wage gap is less. 5.

6. When comparing the management women at MacDonald in USA are given more

important management portfolios as compared to Pakistan where the management role

remains the domain of men folk. The quality of life and the environment at MacDonald in

USA is friendly as against the less friendly environment at MacDonald in Pakistan. The

working hours at Mac Donald in USA, being low masculine are less as against higher

number of working hours at Mac Donald in Pakistan which is high masculine.

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Pay Scale

U.S CEO Pay in big companies has been much higher than in other countries has been much higher

than in other countries. Consultancy Peral meyer & Partners reported average in 200 largest U>S

companies (2005) to be $11.3 million, about 2.5 times that of the largest 100 companies on the

100 companies on the FTSE index of the London stock Exchange(Bush, 2006). For mid-sized

businesses, Towers perri reported average U>S CEO pay (year 2005) for the firms at least $500

million in sales to be $ 2.16 million, on average in the UK, Franch, Ltaly, and Germany.

One reason for the high no salary component of U.S. CEO pay is a $1 million annual cap (since

1993) on the tax deductibility to the U.S.

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Pay Scale America - Average Salary for McDonald's Corporation Employees

Post / Designation Average Salary (Min.) Average Salary (Max.)

General Manager, Restaurant $31,997 $53,907

Assistant Manager, Fast Food $22,775 $37,388

Operations Supervisor $38,520 $91,728

Restaurant Manager $36,634 $46,584

Director of Operations $53,000 $100,000

Finance Manager $80,981 $91,111

Pay Scale Pakistan - Average Salary for McDonald's Corporation Employees

Post / Designation Average Salary

Restaurant Manager ₨50,000 - ₨55,000/-

1st Assistant Manager ₨35,000/-

2nd Assistant Manager ₨25,000/-

Trainee Manager ₨20,000/-

Crew Member ₨10,000/-

Ali, who joined Mc in 2012 as a trainee manager says he worked there for almost 2 years, and here

is what he experienced and suggests some pros and cons

Pros: -You will learn good management skills -People handling skills -communication skills -

Provident fund facility -Medical coverage for parents -2 bonuses in a year depending on

performance.

Cons: - 24hr Rotating shifts (9 hours each shift) -Physical Work, not a white collar job - Limited

Career growth as most of the people hired at trainee level. - Low salary packages in hospitality

industry. Even though McDonalds is the highest paying employer in industry. - Good for people

with 14 years of education but not for those more than this. - No gazette holidays such as Eid, --

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your success depends on how you have contacts with your boss. Salary does not justify workload

year bound. They have high employee turnover. Mostly now they are promoting managers from

crew level who are not much educated and for them it’s a good opportunity.

Figure 1: Pay scale of USA

Career path USA

Mc Career path USA the general career path from entry-level crew positions to restaurant

management is available around the world. Employees often enter at the crew member level. After

completing required training and mastering certain skills, they can obtain the qualifications needed

to advance to the next level and may eventually move into restaurant management positions and,

ultimately to operations consulting and beyond. An example of how this comes to life in

McDonald’s

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Opportunities at McDonald's

Management Development Program Join us and your first step will be an intensive 18 week

management development program this is commercial management training at its best, designed

to help develop the talents you need for a long-term management career.

As well as a thorough grounding in the operational side of the business, you will learn skills in

areas such as finance, marketing, leadership and HR.

Trainee Business Manager Once you have finished the program, you will work alongside a

restaurant management team. Many of our restaurants have a multi-million Euro turnover and

employ teams of 60 or more people.

Business Manager by the time you have become a business manager (often within three years),

there will be trainee business managers to assist you in running your very own business. Your

ideas, initiative and personality will shape and drive the success of your own restaurant.

Career PK

When you join the McDonalds team, you are joining a diverse team of people who are on a solid

career path that offers outstanding training, fun working environment, excellent pay and benefits.

That’s true whether you are just starting out, returning to the workforce or changing careers.

You can choose to start your career from McDonald Restaurants and can get the opportunity to

develop your skills in diversified areas related to People, Business, Customer Service, Equipment

Handling and others.

Trainee Manager

Applying for Trainee manager is the starting point in any McDonald’s restaurant PK. which further

leads to assistant manager and finally restaurant manager. - requires a bachelors BBA/B.sc

qualification.

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Figure 2: Pay scale of Pakistan

International experience

USA CEO are generally has less international work, travelling, and study experience than their

European peers. For instance, in one study comparing U.S CEOs (Fortune 100) with British CEOs

(FTSE 100), one third of the Americans and two thirds of the British had lived or worked abroad.

This often required in the US, as noted by the corporate recruiter Elisabeth Marx of Hedrick &

struggles:

Many US companies do not have a policy requiring executive to have had and international

experience in order to obtain the senior position. In the U.K, better companies make it requirement

to have one or two.(Guerrero & Pimlott,2007a,p.21)

In study for the previous important of previous travel in international relocation, 27% of European

executives saw this to be extremely important (compared with only 15% of their North American

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peers). Also, 54% of North Americans (compared with 31% of the Europeans) said it wasn't at all

important ("Executives Hold Traditional Values," 2007). Another survey sought executive opinion

about learning foreign languages, finding that "nearly 85% of [executive' recruiters in Europe, 88%

of recruiters in Asia and 95% of recruiters in Latin America either 'strongly agreed' or 'somewhat

agreed' that being at least bilingual is critical to succeed in today's business environment. Among

recruiters in North America, the percentage was just 34%" (Executive Recruiter News, 2005). Few

Americans lead large firms in non-English-speaking countries.' Reasons include their more limited

international backgrounds, legal restraints abroad on hiring of noncitizens, and lower pay. Also,

large firms elsewhere are more likely to remain family owned longer, and are less inclined to hire

outsiders, either local or foreign, for senior managerial posts. American-born CEOs of firms in

non-English-speaking settings have included Frederick Reid (Germany's Lufthansa), Jeffrey Katz

(Swissair), Peter Schutz (German-born, American-raised, former head of Germany's Porsche),

John Mack (co-CEO, Credit Suisse), John Brock (Interbrew, Belgium), James Schiro (Zurich

Financial, Switzerland), Thomas Middlehoff (Bertelsmann, Germany), Nancy McKinstry (pub-

lishing house Wolters Kluwer, the Netherlands), Simon Kukes (Yukos, Russia), Steven Theede

(Yukos), Ben Lipps (Fresenius, German medical care firm), Gordon Riske (Deutz, German motor

manufacturer), and William Ameho (Lenovo, Chinese firm based in Singapore). By contrast, it is

far more usual to find foreign-born leaders heading U.S. companies. Some examples in the present

and recent past include the following CEOs: Antonio Perez (Spain) at Eastman Kodak, Sam Gibara

(Egypt) at Goodyear Tire & Rubber, Indra Nooyi (India) at Pepsico, Rono Dutto (India) at UAL,

Fernando Aguirre (Mexico) at Chiquita Brands, Roberto Goizueta (Cuba) and Douglas Daft

(Australia) at Coca-Cola, Anthony O'Reilly (Ireland) at Heinz, David O'Reilly (Ireland) at

Chevron, Alex Trotman (Scotland) and Jacques Nasser (Lebanese-born Australian) at Ford, Eric

Benhamou (France and Algeria) at 3Com, Durk Jager (Netherlands) at Procter & Gamble, Andrew

Grove (Hungary) at Intel, Rajat Gupta (India) at McKinsey & Co., Eckhard Pfeiffer (Germany) at

Compaq Computer, Michael Spindler (Germany) at Apple Computer, Rakesh Gangwal (India) at

U.S. Airways, Enrico Pesatori (Italy) at Tandem Computer, and Piers Marmion (United Kingdom)

at Heidrick & Struggles. Others include Fred Hassan (Pakistani) at Schering-Plough, Michael

Patsalos Fox (Greek-Australian) at McKinsey & Co., Robert Bishop (Australian) at Silicon

24

Graphics, Charles Bell (Australian) at McDonald's, E. Neville Isdell (Irish) at Coca-Cola, Sidney

Taurel (Spain) at Eli Lilly, and Alain Belda (France and Morocco).

It is noteworthy that U.S CEO’s international experience has been rising. For instance, CE

magazine reported the prior work experience abroad was at 37% and 30%, respectively, for the

Fortune 100 and Fortune 700 CEOs in 2003.For 2007, among CEOs of the largest 100 S&P firms,

47 had experience abroad. (Spencer Stuart, 2007)

Planning

The process and function of planning focuses on organization purpose and objectives by evaluation

the best possible path to achieve them. Plans could be broad (long term / strategic) or narrow (short

term / budgets and operational plans). These plans could be achieve via using formal or informal

way. The structure could be centralized or de-centralized while practicing various manager ia l

styles.

U.S corporations practices the following styles in contrast to other counterparts of East Asia and

Western Europe.

More formalized and log-range planning

More Resources to external consultants

More willingness to accept challenges

Organizing

It is the process of bringing together physical, financial and human resources and

developing productive relationship amongst them for achievement of organizational goals.

According to Henry Fayol, “To organize a business is to provide it with everything useful

or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business

involves determining & providing human and non-human resources to the organizationa l

structure. Organizing as a process involves:

Identification of activities.

25

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.

Frequent Organizational Change

The open U.S. economy and intense business competition contribute to many change-driven

actions, such as mergers, acquisitions, split-ups, organization development interventions,

structural reorganization, spin-offs, buyouts, startups, and bankruptcies. As one broad indicator of

change over time, of the 500 U.S. companies in the S&P 500 index in 1957, only 74 remained in

1997 (Foster, 2000.16 Most of the world's biggest merger and acquisition (M&A) advisors (e.g.,

investment banks), and equity buyout firms originated in the United States. For years, their U.S.

activity was much greater than in Europe, but the M&A gap is now largely eroded. One practice

conducive to U.S. mergers and acquisitions has been high severance payouts (golden parachutes)

to senior managers displaced by change in ownership. According to one source, 60% to 70% of

large U.S. firms had such parachutes in 1999, compared with only 15% of British ones and even

lower numbers on the European continent. Also, the prevalence of managerial stock options has

been conducive to organizational change and risk taking. These options have high potential for

personal financial gain if change is successful but little risk if it isn't. Another contributing factor

is broad U.S. cultural acceptance of change (low score on Hofstede's uncertainty avoidance).

Directing

It is that part of managerial function which actuates the organizational methods to work efficient ly

for achievement of organizational purposes. It is considered life-spark of the enterprise which sets

it in motion the action of people because planning, organizing and staffing are the mere

preparations for doing the work. Direction is that inert-personnel aspect of management which

deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement

of organizational goals. Direction has following elements:

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Supervision

Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of

watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.

Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of

subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person

to another. It is a bridge of understanding.

Control

Managerial control assesses whether organizational objectives are being met and calls for

corrective actions when need. It could be broad or narrow. Very broadly, enterprises are controlled

by the external environmental factors such as capital, products and labor market. For example if a

sale is declining or about to decline so the company bares decline in debt rating normally falls. In

such a situation, a manager take proactive actions in order to minimize the effect of declining upon

company’s profitability.

Management is creative problem solving with the desired result of using organizational resources

in a way that accomplishes its mission and objectives. These results are obtained by four

management functions to which’ll turn next in context with the McDonalds.

Planning is the ongoing process of developing the business' mission and objectives and

determining how they will be accomplished. McDonalds shares its ideas through its well-

developed vision. This vision statement serves as the binding glue between the employees

worldwide. They all aim to serve their customers by giving them the best quality products at their

27

convenience. This vision statement clearly indicates the future of the organization. At USA every

employee knows where they are heading towards and what their individual contribution. The

vision acts as the binding force which gives the employees a sense of purpose and commitment.

The second aspect of planning is to have a clear defined mission. As mission defines their business

and their place in the life of its customers.

In focus: McDonald’s

Planning at McDonalds identify the goals and objectives and develop their strategies and tasks to

accomplish these goals. Planning at McDonalds is aligned with the changes in the external

environment; it also faced many challenges like local taste of people, cultural values, and traditions

of specific area in which they want to enter. The planning process maintained the core values at

all franchisees, however the local demands were taken into account to indulge in their culture

completely. Strategies were modified to suit the needs of the area in which they entered. This was

reflected in the operations as well as the resource utilization.

One aspect that highlights McDonalds effective planning is how they manage their supply chains.

Timely delivery and quality raw materials were the result of establishing good relations with the

supply chain partners.

As a result of this strategic planning, McDonalds went into the business of a 24/7 restaurants. This

was to match the demands of the all types of customers and to boost the profits by extending the

store hours. This was accompanied with introducing breakfast at McDonalds which further added

to the menu. McDonalds was now offering all three meals of the day along and was thinking along

the lines of adding snacks to the menu. With clearly defined purpose of the business, embedded

values that dictate the vision and emphasis on the role of planning, McDonalds is able to achieve

sustainable profits.

Organizing is establishing the internal organizational structure of the organization. The focus is

on division, coordination, and control of tasks and the flow of information within the organizat ion.

It is in this function that managers distribute authority to job holders. In today’s society it is

important that management considers the employees and customers as the most important asset of

the organization. Having a rigid structure undermines the creativity of the employees, thus the

culture of empowerment and delegation is what currently prevails in the competitive environment.

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McDonalds uses the collaborative management approach which connects all the global franchisees

worldwide under the umbrella of single company name (Long, 2006). Management encourages

the practice of working and assisting with each other’s franchisees to deliver the best to their

customers by coping up with external challenges and representing a collaborative responsible

culture. In order to ensure consistent quality, the standards are uniform for all franchises.

Thus a centralized structure prevails in terms of training programs, supplies and operations. The

formal structure at McDonalds divides the organization in the departments and every individua l

knows his tasks well at which he needs to be specialized. However, these standard procedures do

not give rise to bureaucratic rigidity in the organization; each employee is committed to achieve

their goals. The organizational structure chosen supports the performance and is aligned with the

strategy of the restaurant of providing consistent quality and great service experience.

Leadership at McDonalds, the CEO is seen as the focal point from which the leadership emerges.

Jim skinner, the current CEO of McDonalds has been entertained with this title for the past thirty

five years (Dentch, 2009). Skinner is said to be an excellent leader with charismatic and

transformational leader. He has said to revitalize the organization and introduced a new fast food

business with his new vision.

The turnaround at McDonalds can be fully attributed to his creative and innovative leadership. He

was one of those who introduced ‘plan to win’ initiative that emphasized the significance of store

operations. Having a diverse background and expertise, he adapted strategies to keep his

employees motivated and committed. Under his leadership, he places great importance on

customer satisfaction; customers come before his employees and restaurants. He promotes

creativity but does not let his employees focus the primary motive of his organization. He believes

in finding the talent therefore he assigns different tasks to his employees and the best one is

awarded and granted with more responsibility. Skinner places importance on values and ethics.

When McDonalds was blamed for obesity, he did not hide behind passing on the blame; instead

he took actions to positively handle the situation. Thus he can be seen as a moral leader who makes

McDonalds a better place for both employees and customers.

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Controlling at McDonalds is the amalgam of motivated workers and the clear policies which keep

them right on the track. The line manager is in charge of keeping the employees working according

to the standards. At a broader perspective, every franchise must follow quality standards and abide

by the strict supplier policies (Long, 2006). This is to ensure that the brands name is not in danger

by irresponsible activities at individual franchise level. McDonalds Corporation believes in

training its employees at Hamburger University. This is to ensure that employees are clear about

the benchmark and how they modify any shortcomings in their performance to meet these

standards.

Flexible work schedule, fun loving culture, training and a healthy work life balance is what keeps

the employees motivated. Though McDonalds is known for its tight control and bureaucratic

structure, it in no way inhibits employee productivity or commitment to the organization.

McDonald’s Operations Strategy

“To provide unmatched consistency in operations in support of high product quality, this must be

accomplished with adequate speed, low cost, and process innovation to accommodate changes in

consumer tastes.”

From the statement of McDonald’s operations strategy, it is clear that both consistent and high-

performance quality is considered order winners, while speed, cost, and innovation are considered

order qualifiers.

McDonald’s Operations Strategy

Dimension Strategy

Capacity Growth as needed through additional stores - but capacity added

carefully

Well-utilized - franchisee's well-being depends on it being used

heavily

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Facilities Distributed facilities, each facility being very similar to the next,

all focused around the same menu - although the uniformity is

beginning to change

Process

Technology

High degree of process understanding, emphasis on "fool-proof"

processes

A leader in the technology of fast-food delivery

Vertical

Integration

Partnership arrangement

Long-term relationship with suppliers to promote innovation and

quality improvement

Workforce Franchisees: well-trained, carefully selected, entrepreneurs

Operators: high-turnover, cheap

Organization Guidelines provided by corporation, but franchisees push to

locally optimize

Control

Systems

Centralized buying

Bulk contracts

"Push" system for basic supplies, "pull" system day-to-day in the

restaurants

Evaluation of the operations strategy:

Internal and external consistency - Looking at the operations strategy along the seven

dimensions, they all support the operations mission and the business strategy from the previous

page.

Contribution to competitive advantage - Systemic strategy creates unmatched consistency in

operations that has been difficult to imitate.

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McDonald’s operations strategy in India

Think Global Act Local

McDonald employs a transnational strategy in terms of local responsiveness and global integrat ion.

They recognized that overseas market required an extremely high degree of local responsiveness

and since their business has grown too big they also need to manage business spread across

different regions effectively and efficiently which would not be achieved through any of the other

strategies. The value chain needs to be constructed taking into consideration of local culture, legal-

political and economic environments in mind.

Local Management

McDonald’s emphasize on local management for better responsiveness to the external

environment. Moreover hiring locals would bring more acceptance of the company in local market

by customers and company can gain easy access to bureaucracy associated with local government.

This brings up the culture of innovation, accountability, and better customer responsiveness.

Having local management also enables franchisee to address employees’ issues more effective ly

taking into consideration of local culture. Through franchise model McDonald’s are able to reduce

the cost of setting up new businesses in different region.

Political Sensitivity

Political risk is that political decisions, events or conditions which may affect country’s business

environment in ways that may affect the investments badly or may have to accept lower returns.

The political risk factor is quite important for McDonald’s since there can be several countries

which might not allow FDI in fast food industry or disallow franchise kind of business model.

Countries like India where 80% population do not eat beef and some religion does not allow eating

pork, therefore McDonald’s had to customize their product offerings to the local needs and in a

way avoided any political conflicts.

32

Environmental Friendliness

The strategy of being environmental friendliness is a new emerging concept. Many developed

countries enforce certain environmental laws to make companies comply with the norms. E.g.

there are specific kinds of directions for the disposal of wastes generated by the business

operations. Environmental friendliness in effect brings goodwill to the company and also provides

opportunity to build a brand. McDonald’s also engage themselves in CSR activity like sustainab le

supply chain management, healthy and nutritious food products etc. Recently McDonald’s have

come up with products which have low calorie content, nutritious to the health of customers.

System and Process Standardization

As a transnational company it is essential to have a standardized system and process in place for

effective and efficient management of the businesses running in different territories. E.g.

McDonald’s force standard operating procedures like make to order make to stock and just-in- time

processes. Implementation and integration of ERP system across businesses of various countries

and with business associates would standardization in their business processes. This would help

McDonald’s reduce their cost, reduce manual work, more transparency and efficiency in

information sharing, better responsiveness to stakeholders etc.

Pricing Strategy

Companies entering into different countries for business have to evaluate their pricing of products

based on income distribution of citizens, local inflation and other factors like currency exchange

rate. Because of exchange rate it is possible that you end up paying different prices for same

product in different countries. McDonald’s mainly open their shops in major cities targeting

middle and upper class citizens as they can afford the prices. After this they start targeting lower

middle class citizens.

Growth Strategy

McDonald's growth strategy is based on three elements

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Increasing number of restaurants

Maximizing sales and profits at existing restaurants

Improving international profitability

Maximizing sales and profits at existing restaurants will be accomplished through better

operations, reinvestment, product development and refinement, effective marketing and lower

development and operating costs. McDonald’s believes that its long term sustainability and growth

depends on stakeholders – franchisees, suppliers, and customers. They believe that as long as

franchisees and suppliers are profitable, so would the company.

Improved international profitability is realized as economies of scale are achieved in individua l

markets and as the company benefits from the global infrastructure.

McDonald’s is earning from two sources, one from home country US and another from foreign

markets. With the globalization, the share of foreign earnings is growing rapidly. The chart below

gives number of stores in host countries to home country.

Conclusion

Global management of United States of America is remarkable and since early 90’s US managers

keenly considered Management as a key element of business. Thus, a list of Renowned Managers,

Professor, and executives came across the study who has brought revolution in business arena.

McDonalds is operating in Pakistan as very profitable organization. In this project we struggled

to study the management behavior of McDonalds starting from its history to its vision and mission

statements in which explained the historical of McDonalds of how it entered Pakistan’s market

and the expansion of its business in various cities. Moreover we also explained about it and

services which are offered in Pakistan by McDonalds as their revenue generating products and

services. I addition to that we researched all their product line. We also explained the

organizational structure of McDonalds. In that we explained the hierarchal structure of

McDonalds. As a gigantic organization of the world need to build their strong organizationa l

34

structure so does McDonalds. Its works on the basis of vertical and horizontal coordination. All

the executives from up to the lower management on making it a successful organization.

McDonalds is a global fast food chain known for its quality food and great customer experience.

Through strict and clear policies and under the charismatic leadership of Skinner, McDonalds have

been able to build a reputable image in the minds of its consumers. Actively responding to the

changing needs of its customers, it has been able to maintain its brand essence along with rising

profits. A perfect blend of the four management functions namely, planning, organizing, leading

and controlling has been the key driver behind McDonald’s success.

Discussion

The report unfolds the management practice in USA and a brief comparison with other countries.

Hence, it covers the aspects Political and Legal, Economics, Culture, Education, Gender, Pascale,

Career Path, International Experience, Operations. That influence directly or indirectly on

management.

USA is the top leading country in the field of technology and innovation that governs by strong

management skills. Political and legal frame support local corporations to go global. All politica l

and legal aspects supports not only the corporate system but provide equal rights to staff,

shareholders, and stakeholders. Strong taxation rules strengthen the economy stabilize it currency

value and discourages foreign investment.

With respect to culture United States is multicultural country. No such defined cultural boundaries

though masculinity is low and high power distance in organizational terms, low certainty

avoidance and high future orientation are practiced.

Economic stability influences on the country in minute and mega structural terms. Due economic

strength US is capable to get a lion’s share from global economy by setting its businesses across

national boundaries.

Fundamentals of management, education and practice provides at institutional level.

35

Majorly job and functional area mobility, is relatively low at CEO scale due to high responsibility

and personal ownership or family business. Certainly a managers gets skilled in one particular

area, it is comfortable for him to solve queries, manages resources and envisage confidentially.

All resources encourages corporation to expand their business and share their experience to the

world. This helps the manager to lean across cultures and practices different management styles

accordingly. Planning, organizing, directing and then controlling across national bounties requires

deep study regarding that particular culture in order to get successful results. Perhaps, to achieve

these goals management destines various operation which vary country to country. An operation

style is successful in one country May fails in other country.

So, a global manger must be well informant not only a particular area, country or culture but the

whole span. In this way a manager could extract the best informational resources and formulate

the successive strategies.

Recommendation

No doubt USA has the educational knowledge, intellectual capacity and market penetration ability

to rule over worlds market. Though in terms of MacDonald’s it should emphasize on Reduction

of employee training spending (lowering employee turnover). In order to reduce of employee

training spending and to lower turnover MacDonald’s must give the job just for highly motivated

people. It means, that they are going to be loyal and not to leave job so fast. New employees would

be trained by employees, who are working longer. In this way, company reduces training spending,

new employees are trained by the people, who are working inside the company and do the same

things every day.

To motivate employees and always take care about their expectations. It can be money premiums

for good working in the end of the month (or year), some employees parties, ‟Employee of the

week (month)”competition.

To make a line of organic food in their menu and take a look what is more popular and healthy

for their customers. If it is going more popular than usual menu food, it is more worth to make all

36

food in organic way, even it is more expensive. First of all, people like what is natural, and then

they are interested in the price.

Advertisement companies declaring organic food pluses and make it more popular. Many people

loves McDonald’s food, so it has an authority and can show good example of necessity of organic

food in people life and compare how organic and usual McDonald’s food effect customers‟ health

and all the nature about them.

Advantage of human health problems (improvement of products) McDonald’s is big food

supplying company, as all knows, how food affects our health. It is one of the main factors, what

built our body and strength our brains. Knowing that, McDonald’s should: Suggest just high

quality, improved products, which is full of vitamins and minerals.

So, it means that the company must improve their products, all the food must be certificated and

fit for all healthy food standards. Be in a contact with suppliers, who supply products for

McDonald’s food and always check if the products is natural, high standard and healthy for all of

age customers. Contact with doctors, scientist and improve their products to fit for all of age

customers, even they have some problems with their stomach. It means to make measures and find

what the best is for all possible customers.

37

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