Service Management Report 3
Introduction 3
McDonald’s Service Management 3
Motivation 3
Leadership 5
Learning and leadership management 5
Human resource management 6
Culture and diversity 7
Information technology 7
Communication 8
Apple’ Service Management 9
Agility to allow innovation into completely new areas 10
Build and enforce a performance culture... 12
Conclusions and recommendations 14
Service Management Report
Introduction
This report aims at demonstrating the manner in which organizations provide services to their clients and how their approaches differ with each other. For purposes of this paper, two business organizations will be analyzed. These are the McDonalds Corporation, a fast food restaurant and Apple, a technology firm.
McDonald’s Service Management
In 2007, McDonald’s was a global fast food restaurant with more than 30,000 branches serving over 50m people in 119 countries on daily basis (Hayes & Laudan, 2009, p. 366). According to Harris (2009), more than 58 million customers visit the McDonald’s food chains every day. With this size, there needs to be a very specialized and well thought out service management system. When the two brothers, Richard and Maurice McDonalds opened up the first McDonald’s food chain in San Bernardino in California in the 1940s, they chose to develop a fast service system in service delivery. The company then adopted the description ‘Drive-In Restaurant Services in 1961 for its stores in the United States. This welcomed customers to drive into its stores and grab something before walking out.
McDonald’s mainly sell chicken products, hamburgers, soft drinks, salad, French fries, shakes and ice cream. Its restaurants are distributed in more than 100 countries across the globe. However, Reuter’s recent reports inform that the company’s menu has lately been associated with obesity (Baertlein, 2013). This has occasioned it to revise its products. McDonald’s apply several service management theories to help improve its operations and service delivery to its millions of customers ( Parikh and Gupta, 2006).
Motivation
McDonald’s fully utilizes the human resources at their disposal. This brings the most significant advantage that has ensured that the company continues to occupy its leading role in the global food chain restaurant. McDonald’s relies on its strategy of integrating its employees into its problem solving structures. Employees are at the center of problem solving missions and would therefore progress in productivity and quality. This motivates them and enhances their commitments to service delivery and management. In order to achieve this, the company is committed to the pursuant of four simple principles. The company must elaborate various departments and systems motivation besides having achievable and clear goals that is common to everyone (Schermerhorn, 2006). McDonald’s also seeks to change its aim constantly by giving managers bi-annual common goals. Additionally, salary raise must have employee sensibility at all the time.
There are three components of motivation system that are applied at McDonald’s. These include social policy, financial encouragement and non-financial encouragement. Maslow describes these motivational system components in his hierarchy of needs as motivation theory. The hierarchy has five levels with the most important component being at the base. One has to complete one level before moving to the other. McDonald’s has structures and strategies that are intended at meeting the employees’ needs in order to increase their performance. Although the company may not necessarily satisfy all these levels, it strives to ensure that its employees are sufficiently motivated. McDonald’s is aware that salary raise, status and security alone do not guarantee employees satisfaction. Employees can still be dissatisfied despite all these (Simola, 2003, p. 355).
Leadership
Successful service management and delivery in nay business organization can only be effective if there is vibrant and robust leadership. At McDonald’s, leadership aspect in service management is encouraged at all levels. This calls for the development for leadership skills to include such factors as annual review of performance management, service planning, board self-evaluations, committee self-evaluations and director orientation and education. Annual review of performance management is done jointly by independent directors and the Compensation and Governance Committee chairman. In succession planning, McDonald’s Board engages in periodic review of leadership development and other initiatives that will help in the improvement of service delivery (Griffin, O'Leary-Kelly, and Pritchard, 2004).
In the Board self-evaluations, McDonald’s Governance Committee assesses the whole board’s performance on an annual basis (Corporate Governance of McDonalds 2016). Assessment of individual directors happens on a regular basis. In committee self-evaluations, the company annually evaluates the Commission’s performances through the auditors, governance and competition committees. Director orientation and education allows directors who are not part of the management team to participate in regular learning processes in order to gain the right knowledge for addressing the operations, strategy and corporate governance practices of the company (Preble, 2005, p. 420).
Learning and leadership management
McDonald’s believes in consistent learning and education for its employees to equip them with the most up to date knowledge and skills regarding its services, products and customer behavior. Regular training helps the employees at McDonald’s adjust their specific career paths and empower them with systems management and change management courses. Some of these trainings happen in the University of Hamburger where knowledge and skills are dispensed. All cadres of employees are required to take learning and knowledge acquisition seriously so as to build on their counseling and leadership skills. This will empower them to operate effectively and hence deliver quality services to their customers. The learning environment at the University of Hamburger offers trainees with excellent opportunities to consult with other players in the industry and eventually improve on service delivery (Boella, 2000, p. 96).
Human resource management
As the largest fast food restaurant chain in the globe, McDonald’s has emerged to be the second biggest employer in the United States. The company has more than 500, 000 employees that are spread throughout its 90,000 branches globally. This implies that the company requires the greatest skills and knowledge when it comes to human resource management as compared to any other company in the world. The human resource management for the McDonald’s goes beyond administrative capacity of employees’ welfare ( Rannenberg, 2004, p. 81). Human resource management will only be successful with effective service management theories. This is in view of the fact that management theories are carried out with a sole aim of enhancing service quality and organizational productivity. Apparently, customers will be happy and coming back if the McDonald’s are consistent in their provision of quality services and organizational productivity. Some of the management theories related to this include contingency theory, systems theory and chaos theory. Islam (2012) the contingency theory allow managers to be guided by the prevailing situations in making decisions while systems theory allows managers to acknowledge the effects of various systems on an employee and vice versa. Chaos theory (Levy, 2007) opines that some events and circumstances within an organization cannot be controlled.
The human resource management’s scope has been enhanced by the rebounds on the job markets and revaluation of members of staff for the McDonald’s. A greater premium has therefore been placed on the HR department by the chief executive officer to identify and preserve talent and set up succession planning as well. A company can only remain competitive if it has a full range of experiences in human resource management. This includes talent search and retention ( Griffin and Moorhead, 2014). McDonald’s has perfected the art of employee performance management, reward and retention strategies to effectively deliver its services to clients (Weihrich, Koontz and Cannice, 2010, p. 49).
Culture and diversity
McDonald’s believes in inclusivity and diversity for all its employees and ownerships of its restaurants in different countries across the world. This is a key contributor to the success of the fast food chain restaurant. The management of the business organization believes that embracing diverse cultures within its operations gives its stakeholders a sense of belonging and integration. This is in view of the fact that the company’s products will be embraced from whichever part of the world the McDonald’s restaurant store is located. Some of the approaches employed by the McDonald’s in ensuring that it is diverse include doing external partnerships, employee business networks, strong and diverse educational course training and partnering with minority organizations (Kovner, Elton, Bilings and Short, 2000, p. 30).
Performance is constantly evaluated in order to ensure that the organization is strongly represented at all levels including nationality, gender and race. This is what brings out the diversity aspect at McDonald’s. Women and minority owners represent a significant ownership population for the fast food restaurant across the world. Additionally, the McDonald’s allows supplies from a diverse backgrounds and businesses. Minority and disenfranchised populations receive more than $4 billion from the McDonald’s for purchasing food, packaging materials, uniforms, toys and uniforms (Fenton-O'Creevy, Gooderham and Nordhaug, 2008, p. 160).
Information technology
McDonald’s has proved to be so successful in the use of information technology to improve the experiences of its customers and employees. Customer experiences and employee relationships have been enhanced by the use various information technology applications. Information technology has ensured that the organization receives real time transmission of information as it happens in its activities of sales and marketing. Orders and payments from customers are handled efficiently with new improved technology. The data that is generated can then be collected in POS machine for future use especially in helping analyze customer’s behaviors (Fenton-O'Creevy, Gooderham, & Nordhaug, 2008, p. 161). This helps the McDonald’s to adjust itself accordingly and aim to satisfy the customers’ needs. Additionally, the internet has also played a significant role in enhancing customers’ experiences and stakeholder connection. Through the internet, McDonald’s can not only advertise its products and services online but also let customers share their experiences so as to identify the most critical areas for improvement (Han, 2008, p. 10).
Communication
Communication is an important tool for any business organization. McDonald’s has a custom communication tool referred to as ‘Happy Exercise and Love Touch Health’. This has enabled the organization to effectively engage its customers on the best nutritional recommendations for the outfit. Apparently, some lifestyles diseases such as cancer, diabetes and heart attacks are associated with consumption of fast foods. Global nutritionists have therefore carried out and sustained a campaign of avoiding such foods. This move has a potential of denting the reputation of the organization and driving customers from its products. It is only an efficient communication discipline that can help McDonald’s withstand this (Denning, 1996, p. 8).
Through efficient communication, the McDonald’s has managed to convince its customers that it is putting appropriate interventions in place to ensure that its products healthy. It has engaged local communities, nutritionists, fitness experts, media channels and health bodies like the World Health Organization for expert advice on how to ensure that its customers are not harmed by its foods. This has been efficiently achieved, thanks to the effective communication based interventions employed by the food chain.
Communication based interventions have ensured that McDonald’s change its image from the producer and seller of junk food to healthy and friendly food restaurant. This has enabled the organization to attract clients who are health oriented, focused and in pursuit of healthy lifestyles. As a result, the McDonald’s has significantly expanded its market share.
On the other hand, communication has enabled the McDonald’s to convince its clients to change their behaviors. Many customers became aware of junk foods and their destructive effects on the health of an individual. Consequently, they avoided other outlets known for such foods. The once fast food customers resorted to healthy living by engaging in exercises and eating healthily. These approaches have been so effective for the McDonald’s fast food chain restaurants. Although they can be generally applied by any organization, the McDonald’s has ensured that they have customized them with its operational procedures and type of customers ( Koontz & Weihrich, 2010).
Apple’ Service Management
The service management approaches exhibited by Apple are very different from those of the McDonald’s. As the most valuable firm in the world, Apple has cut a niche for itself owing to its extraordinary success.
Agility to allow innovation into completely new areas
Apple has demonstrated an unmatched ability to shift its focus into new areas and dominate them after every few years. Unlike the McDonald’s, which is only focused on a few food types, Apple has continued to come up with new products after every few years. Apple started as a computer company known as Apple Computer but has metamorphosed over the past decade into a music industry with its iPod device signature and channels for iTunes distribution. It then conquered and controlled the smartphone industry (Putnik and Putnik, 2012, p. 85). The iPhone and App Store remains the smartphone technology’s finest. It is currently working on the PC with an aim of upsetting the publishing industry. This kind of agility is not matched by any other firm including McDonald’s, Toyota, Procter & Gamble, Google or even Facebook (Berry and Rondinelli, 1998, p. 44).
This agility is reinforced by the vision and direction that its senior leadership has together with its unique corporate culture that stresses the need to be ready for ‘the next big thing’. At Apple, there is a cultural expectation that the company must move forward to explore a different thing after succeeding in one task. This implies that its employees are forced to learn and retool very fast. Apparently, this expectation is a driving force in itself and serves to remind employees that there is no room for laxity at Apple. This implies that the employees must prepare themselves mentally and keep on looking forward for the next big challenge regardless of the fact that there is no career path towards this endeavor. This is completely different from McDonald’s employees who are taken through training and told how to serve customers ( Sfodera, 2006, p. 70). At Apple, the company relies on the innovative brains of its employees. While employees at McDonald’s depend on team work for service delivery, the employees at the Apple work in several silos that are disjointed and compete against each other instead. They do not have a clear foresight of the intended or purpose of the use date of the project.
The fact that Apple is an agile company that is undergoing radical change implies that employees will rapidly be able to shift their work load and thereby not stay at one point of work for long. As a result, best brains in technology are attracted to work for the firm. At McDonald’s, one can work at the same position for a long time before he or she gets a promotion. This can lead to boredom and monotony and subsequently affect the output of an employee (Gomez and Probst, 2007, p. 318).
Apple has a lean talent management approach that contributes to extraordinary productivity. Apparently, most organizations always endeavor to have a workforce that is productive. This can best be measured by revenue per employee. In Apple, its products produce $2million revenue per employee. A second measure of productivity of the workforce is profit per year. This is approximately $478,000 at Apple. This is extraordinary. The management of the Apple has a strong belief that it can achieve more productivity with few employees. Consequently, it has understaffed and reduced funding in order to make the team more innovative and productive.
The lean approach to management ensures that innovation costs are reduced as more trial and errors are avoided. It instead improves innovation since everything is tried and this leaves little room for re-dos and misses. With unrealistic deadlines that Apple employees are operating on, the projects must be done and problems solved within specific periods of time. Apparently, a lean team is forced to be more coercive and productive with minimal slippage. Unfortunately, this cannot happen at the McDonald’s since employees are many ( Duysters, Manb, & Wildeman, 1999, p. 187). The lean approach at Apple ensures that every employee must adopt a leanness mentality even huge cash resources.
Build and enforce a performance culture
Apple leans in an industry that is focused in the production of results. The performance emphasis at the firm emanates from reinforced operational practices and processes. The company for instance has emphasized taking on taking stock of its employees to motivate and reward them by recognizing their programs. The rewards only include successful products and not based on trials (Choo, 2002).
A culture that is based on performance requires momentous differentiation that is based on performance. At Apple, top performers who are engaged on critical products mission get more special treatments as compared to other employees. The company has a culture of rating ‘the top 100 most important employees’. This way, some employees feel that they are being treated differently at Apple and this can frustrate their performance impacts. Additionally, different functions at Apple are funded differently. Functions that have the potential to have more impacts on the organization receive more funds as compared to others that are deemed to be not performing so well. These might include overhead functions that do not directly produce products like the human resource management. This is different from McDonald’s approach of human resource management. The human resource management at McDonald’s operates on the principle of equality of all employees. This ensures that all employees are rewarded with the same packages such as holidays, trainings and many more. As a result, chances of some employees being disgruntled are avoided by the company ( Lindič, Baloh, Ribière, & Desouza, 2011, p. 185).
Academic qualifications from prestigious universities or colleges or success at a past placement are not perquisites for employment at Apple. Steve Jobs himself did not have a degree. The most important thing is how one can compete favorably and showcase their competence.
Instead of balancing between work and life balance, Apple emphasizes on work
Many human resource management practitioners across the world emphasize on balancing between work and life. At Apple, one has to be extremely committed to hard work and nothing else. A closer look at its website reveals that the company states firmly that, this isn’t your cushy corporate nine-to-fiver.”
Hard work message severally reinforced in its website including “Making it all happen can be hard work. And you could probably find an easier job someplace else. But that’s not the point, is it?
Apple was built with strong ethical values, some of which defied the known traditional management styles. The founder of the Apple, Steve Jobs built his company with uncompromising and egotistical styles.
In management, consensus should not be confused with collaboration. Good and successful businesses are not built on consensus between employees and the management. The experiences of employees at the Apple demonstrate that when employees are pushed too hard they can accomplish results that they do not believe they could have achieved. Apparently, that is a unique way through which somebody can demonstrate leadership. This is a good business lesson for many small scale businesses. One only needs a clear vision, not necessarily an agreement. When you make vision a reality, the business will be turned profitable. Both McDonald’s and Apple have demonstrated different manager-employee relationship ( Pollitt and Bouckaert, 2004, p. 56).
Conclusions and recommendations
Leadership should not be confused with management. Uncompromising leadership style can be accepted but management must be as inclusive as possible. Managers with weak leadership styles can also collaborate with others to complement with others. For instance, Steve Jobs of Apple had very poor leadership skills but he was a good manager. However, he made up for this by selecting a stellar team of great managers like Jonathan Ives, Phil Schiller, Tim Cook and Eddy Cue. These people complimented his leadership and managerial style. On the other hand, the McDonald’s believes in giving every person a chance and therefore has empowered various people across the globe to own and run restaurants independently. With a strong and consolidated management team, the management can easily complement its strength like it was done at the Apple. Unfortunately, McDonald’s fragmented management styles make it hard to track undesired decisions that can harm the business (Grace, 1995).
References
Baertlein, L. (2013). Want fruit with your burger? McDonald's expands anti-obesity push. Retrieved April 23, 2016, from http://www.reuters.com/article/us-mcdonalds-menu-obesity-idUSBRE98P1DI20130926
Berry, M. A., & Rondinelli, D. A. (1998). Proactive corporate environmental management: A new industrial revolution. Academy of management Perspective, 12(2), 38-50.
Boella, . J. (2000). Human resource management in the hospitality industry. Cheltenham : Stanley Thornes.
Choo, C. W. (2002). Information management for the intelligent organization : the art of scanning the environment. Medford, N.J. : Information Toda.
Corporate Governance of McDonalds. (n.d.). Retrieved April 23, 2016, from https://www.scribd.com/doc/37832592/Corporate-Governance-of-McDonalds
Denning, S. (1996). Why the best and brightest approaches don't solve the innovation dilemma. Strategy & Leadership, 33(1), 4 - 11.
Duysters, G., Manb, A.-P., & Wildeman, L. (1999). A network approach to alliance management. European Management Journal, 17(2), 182–187.
Fenton-O'Creevy, M., Gooderham, P., & Nordhaug, O. (2008). Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy? Journal of International Business Studies , 39, 151-166.
Gomez, P., & Probst, G. B. (2007). ORGANIZATIONAL CLOSURE IN MANAGEMENT: A COMPLEMENTARY VIEW TO CONTINGENCY APPROACHES. Cybernetics and Systems: An International Journal, 20(4), 311-320.
Grace, G. (1995). School Leadership: Beyond Education Management : an Essay in Policy Scholarship. Oxford: Psychology Press.
Griffin, R. W., & Moorhead, G. (2014). Organizational behavior. Mason, Ohio : South-Western ; Andover : Cengage Learning [distributor].
Griffin, R. W., O'Leary-Kelly, A., & Pritchard, R. D. (2004). The Dark Side of Organizational Behavior. Hoboken : John Wiley & Sons.
Han, J. (2008). The Business Strategy of Mcdonald’s. International Journal of Business and Management , 3(11), 1-11.
Harris, P. S. (2009). None of us is as good as all of us: How McDonald's prospers by embracing inclusion and diversity. Hoboken, NJ: John Wiley & Sons.
Hayes, D., & Laudan, R. (2009). Food and nutrition. New York: Marshall Cavendish Reference.
Islam, J. (2012). A review of literature on contingency theory in managerial accounting. Afr. J. Bus. Manage. AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 6(15). doi:10.5897/ajbm11.2764
Koontz, H., & Weihrich, H. (2010). Essentials of management. New Delhi [u.a.] : McGraw-Hill.
Kovner, A. R., Elton, J. J., Bilings, J., & Short, J. H. (2000). Evidence-based management. Frontiers of Health Services Management, 16(4), 3-46.
Levy, D. (2007). Chaos theory and strategy: Theory, application, and managerial implications. Strat. Mgmt. J. Strategic Management Journal, 15(S2), 167-178. doi:10.1002/smj.4250151011
Lindič, J., Baloh, P., Ribière, V. M., & Desouza, K. C. (2011). Deploying information technologies for organizational innovation: Lessons from case studies. International Journal of Information Management, 31(2), 183–188.
Parikh, ., & Gupta, R. K. (2006). Organisational Behaviour. New Delhi : Tata McGraw Hill Education Pte. Ltd.
Pollitt, C., & Bouckaert, G. (2004). Public management reform : a comparative analysis. Oxford [u.a.] : Oxford Univ. Press.
Preble, J. F. (2005). Toward a Comprehensive Model of Stakeholder Management. Business and Society Review, 10(4), 407–431.
Putnik, G. D., & Putnik, Z. (2012). Lean vs agile in the context of complexity management in organizations. The Learning Organization, 19(3), 248 - 266.
Rannenberg, K. (2004). Identity management in mobile cellular networks and related applications. Information Security Technical Report, 9(1), 77–85.
Schermerhorn, J. R. (2006). Organizational behavior. Hoboken, N.J. : Wiley ; Chichester : John Wiley [distributor].
Sfodera, F. (2006). The spread of yield management practices : the need for systematic approches. Heidelberg ; New York: Physica-Verlag.
Simola, S. (2003). Ethics of Justice and Care in Corporate Crisis Management. ournal of Business Ethics, 46(4), 351-361.
Weihrich, H., Koontz; , H., & Cannice, M. V. (2010). Management : a global and entrepreneurial perspective. New Delhi : Tata McGraw-Hill.
