Name: 1.

ALIF IRFAN BIN FARIDDUDIN

2. NUR ATHIRAH BINTI HASLIS
3. NUR DINI NAJJATI BT ABDUL JALIL
4. NURAIRIN SYAHIRAH BINTI MOHAMMAD NOOR MUHARRIM
5. NURUL ANISAH BINTI MOHAMAD SHUIB

Id Number: 1. AM2211012463
2. AM2211011980
3. AM2211012971
4. AM2211011995
5. AM2211011989

Lecturer: NORHAYATI BINTI WAHIB Lab group / Tutorial group / Tutor (if applicable)
NOT APPLICABLE

Course and Course Code: MGT 2323 Submission Date: 3 MARCH 2023
PRINCIPLE OF MANAGEMENT

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 TABLE OF CONTENT

NO. CONTENT PAGE

1. Background of the company 3-6

2. Function of management
2.1 Planning 7-9
2.2 Organising 10-14
2.3 Leading 15-17
2.4 Controlling 18-19

3. Conclusion 20

4. References 21
BACKGROUND OF COMPANY

McDonald's is the leading quick-service restaurant chain in the

world, with more than 36,000 outlets in more than 100
countries serving more than 70 million customers daily.
McDonald's serves about 13.5 million consumers every month
in Malaysia at more than 320 locations. McDonald's employs
more than 15,000 Malaysians across its outlets, providing
employment, training, and growth possibilities (McDonald’s
Background & History n.d.)

● History of the McDonald’s

The birth of McDonald's began with Raymond Albert Kroc. Ray Kroc was the authorised dealer
of the Multimixer milkshake maker. In the 1950s, Richard and Maurice McDonald, brothers,
owned and operated a hamburger restaurant in San Bernardino, California. Ray Kroc heard how
well the McDonald brothers were doing using his Multimixers to serve their customers. He met
with them and bought the franchise rights to operate McDonald's restaurants from them.

Ray Kroc started McDonald's Company in 1955 and opened the first restaurant in Des Plaines,
Illinois. He bought out the McDonald brothers in 1961. As the saying goes, the rest is history.
McDonald's expanded to become the largest restaurant chain in the world. There are currently
over 33,000 McDonald's outlets throughout 119 countries. Ray Kroc passed away in 1984, yet his
legacy lives on. His success story continues with the employees, franchisees, and suppliers of
McDonald's. His dedication, commitment, and accomplishments continue to live on in
McDonald's restaurants throughout the globe. (McDonald’s Backround & History n.d.)
 ● McDonald’s Malaysia Corporate Milestone

Tan Sri Dato' Vincent Tan, of the Berjaya Corporation Group, was the first person in
Malaysia to bring the McDonald's franchise to the country in the early 1980s. This was done
through a joint venture that was given the name Golden Arches Restaurants Sdn. Bhd.

McDonald’s first restaurant in

Malaysia opened at Jalan
April 1982 Bukit Bintang, Kuala Lumpur

November 1987 Ayam goreng Mcd first

introduced in Malaysia

December 1988 First drive-thru restaurants at

Malaysia was opened at Jalan
Pahang, Titiwangsa

January 1993 First franchised restaurants

was opened at Sibu

1994 Prosperity Burger was created

and launched in Malaysia.
 March 1994 Delivery service was
introduced.

February 1995 McDonald’s was the first

quick service restaurant in
Malaysia to obtain the Halal
Certificate from JAKIM.

Jun 2007 McDonald’s launched

24-hours services at over 70
restaurants nationwide

McDonald’s McCafe

When it comes to cafés and fast food

franchises, the coffee at McDonald's has
consistently ranked at the top of the list
among devoted coffee drinkers around.
Drinks from McCafé are widely consumed in
many parts of the world and continue to win
over audiences everywhere. The company
makes available a comprehensive selection of McCafe beverages, which includes eight unique
coffee blends. The business has a significant presence in a variety of nations throughout the world.
It features locations in South Africa, Europe, and the United States of America. Moreover,
McCafé may be discovered in some of the nations that form Asia. (McCafe Background &
History n.d.)
 ● History of McCafe

Although it is a part of the McDonald's business, McCafe is run as its own separate branch
and is a completely separate brand. As compared to other popular chains such as Starbucks, Costa
Coffee, or Tim Horton's, the company is still in its early stages of development. When it first
opened in 1993, McDonald's McCafe made the conscious decision to veer away from the
traditional concept of fast food and the standard McDonald's menu drinks. It pioneered a novel
model for the contemporary coffee shop we know today. Not only do they provide a selection of
excellent baked goods and pastries, but they also provide a range of different coffee beverages to
choose from. ( McCafe Background & History n.d)
FUNCTION OF MANAGEMENT

2.1 PLANNING

Planning is a process of establishing strategies to accomplish goals, defining goals, and creating
plans to integrate and coordinate activities (Stephen P. Robbins, Mary Coulter, 2020). Planning is
essential in an organization in order to achieve its mission and vision and ensure smooth and
prosperous business operations.
There are few types of planning such as strategic plans, operational plans, long term and short
term plans.
Firstly, Mcdonald’s mission is to make delectable, feel-good moments accessible to all.
They serve delicious food that makes people feel good, with convenient locations, hours, and
prices, and by working hard to meet their customers' expectations for speed, variety, and
customization. As for McCafe, the mission is to deliver advanced food services to the customers.
It was designed to mix a better placed, efficient service, and delectable offerings all into one. It is
important for the customers to feel comfortable there. In addition to increased revenue, the
introduction of the new business model also contributed to heightened brand awareness of the
emerging coffee chain.
As for McDonald’s, the company uses a strategy called Plan to Win This strategy consists
of 5 P's, price, promotion, product, place and people (McDonald’s Marketing Plan and Strategy |
Report Example, 2022). The notion behind this strategy is for McDonald's to no longer be the
largest fast food restaurant business, but rather the best. McDonald's strategic goals and expansion
plans in Malaysia continue to prioritise efficiency, promptness, and convenience by stepping up
our Drive-Thru, McDelivery, Digital Platform, and McCafé business sectors. As Dato’ Azmir
Jaafar, Managing Director and Local Operating Partner of McDonald’s Malaysia said, the growth
of the company relies on our mission to always deliver tasty feel-good moments to customers
anytime anywhere (Hong, 2022).
In addition, McDonald’s aims to offer 50,000 job and career opportunities to all
Malaysians since the company will invest RM 1.35 billion to open new restaurants throughout
Malaysia by 2026. The company stayed true to its 'Malaysians Serving Malaysians' motto as it is
hiring the truly Malaysian to join the workforce. The company also offers the training and
guidance to youth who are interested in working with this fast food restaurant along with the
minimum wage that has been set by the government. This is one of the excellent methods to
reduce poverty levels in Malaysia (Hong, 2022).
 On the other hand, we will be discussing the operational plans of this company. Generally,
an operational plan outlines the organization's primary objectives and goals, as well as the means
to achieve them.
Firstly, their communication practices and communication with the customers. This fast
food restaurant does not sell or share customer data except as described in this Privacy Statement.
McDonald’s Malaysia uses online services such as text, email and the apps to communicate with
their customers by sending marketing, transactional and other messages (McDonald’s Malaysia,
n.d.).
Next, sending orders to restaurants, this applies when the customer places an order online
such as a website or application. Before customers place the orders, they need to register an
account on McDonald’s apps and set a payment method either online banking or using a card. It is
the customer's responsibility to ensure that they are of legal age to use any registered credit cards
and they have the necessary authorization from the card issuer. Besides, customers can choose to
pick up their order through Drive-Thru, Takeaway, Dine-In or Drive-In. The next discussion is
about offers and loyalty points. There are few general terms that apply to the offers such as
serving time and the offers are not transferable (McDonald’s Malaysia, n.d.).
There are rules that every employee must follow and obey. The first rule is about
employee uniforms. New employees will be given uniform shirts, hat and name tag but pants. The
employees of McDonald’s need to take care of their appearance and they are responsible for
keeping their uniforms clean. As for meals, while on duty, the staff can purchase the meals at half
price during break. Finally, the employee loitering. The employees need to arrive early at the
workstation and leave the premises immediately after their shift is finished (McDonald’s
Malaysia, n.d.).
Lastly, the SWOT analysis which helps the company to achieve their mission and vision. For your
information, SWOT involves strength, weakness, opportunities and threats. Table below shows
the SWOT analysis of the company.

Strength: Key resources, Assets and values Weakness: Lacking resources, Assets and
giving a competitive edge. values preventing further growth.

● Strong brand recognition ● Franchise model

● Consistency ● Standardization affects product design.
● Technology integration

Opportunities: Contextual opportunities that Threats: Contextual threats can seriously

can speed up growth. harm growth.
● Brand image rebuild ● Health trends and competition
● Investment in McCafe ● Cultural insensitivity
● Environmental concerns
Table 2.2.1 McDonald’s SWOT Analysis
2.2 ORGANISING

What is organizing? Stephen P. Robbins and Mary K. Coulter (2021) When you think of
organizational structure, you’re likely to think about things like rules and regulations, how jobs
are defined, and an authority chain of command. A “well-oiled” organization is thought to have a
comprehensive set of formal rules, designated departments, and a clearly defined authority
hierarchy. But this needn’t be the case. ING, a Dutch banking firm, has recently transitioned into a
free-form structure that flattens the organization, minimizes the number of managers, and relies on
small teams to get the work done. Specifically, ING has replaced its functional departments with
350 nine-person autonomous teams. They have end-to-end responsibility for handling clients’
needs. The company credits this new structure with improved response speed, increased employee
engagement, and higher productivity (p.306). Organizing is a managerial role that entails planning
and organising works in order to fulfil the objectives of the organisation.

The organisational structure of McDonald's Corporation was developed to facilitate effective

management and efficient handling of the company's operations across the globe. The
organisational or corporate structure of the fast-food company outlines the organisational design
and system through which organisational components cooperate in order to achieve business
goals. The corporate structure of McDonald's makes it easier to manage operations in the food
service industry based on how well the business is doing. The corporation, which operates the
most fast food restaurants in the world, is constantly improving its organisational structure to
respond to new and existing challenges in the industry. The organisational structure of
McDonald's carries out strategies and is flexible enough to change with the business environment.
McDonald’s Company Hierarchy

In addition to the owners, directors, and other key

executives, McDonalds' restaurant level executives
operate each location globally. These executives
oversee branch management at this level
Organizational Structure McDonald

There is a divisional organisational structure at McDonald's Corporation. In this sort

of corporate structure, the restaurant business is segmented into different components, each of
which is assigned responsibilities according to the operating requirements. Each division is in
charge of a specific operational area and the strategic goals that correspond to it, all of
which are connected to McDonald's overarching mission and vision. One of the goals of the
divisional corporate structure is to encourage autonomy and organisational flexibility in
order to serve the business objectives of a variety of food service markets.

1. Geographical
McDonald's has a global hierarchy for all of its businesses under the McDonald's
Corporation. The divisional organisational structure stresses corporate control
through managerial control. Strategic decisions, orders, and instructions are
transferred down the chain of command from the CEO to the heads of various
business areas, higher and intermediate managers within those groups, and finally to
restaurant managers and staff in company-owned restaurants and franchise
operators.
 2. Regional
The Regional groups are one of the most unique parts of the divisional structure of the
McDonald's Corporation. Currently, there are three divisions is United States of
America, International Operated Markets, and International Developed Licensed
Markets. The restaurants in the United States are part of the United States of
America group. The International Operated Markets group is made up of the
company's five largest international markets that it owns outright. The IOM
Business Unit is made up of the company's other international markets that it owns
outright. The International Developed Licensed Markets group is in charge of the
remaining restaurants in the 80 markets where McDonald's has given strategic
partners the rights to open franchises.

3. Functional
The divisional structure of McDonald's Corporation includes functional groups. Among
these are Learning and Development, Communications, Compliance, and
Sustainability. McDonald's is set up so that a corporate executive or senior manager
is in charge of each functional group. These groups help McDonald's do important
business tasks like managing human resources, driving sustainability initiatives, and
strengthening the company's organisational culture more effectively.

Decision Making McDonald’s International

0
McDonald's decentralised organisational structure reflects its global perspective. It occurs
when a business's lower levels have several locations and the main office cannot reasonably
control or make choices for all of them. McDonald's operates in over 100 countries, making it
impossible for the CEO to oversee all activities. Each country has its own head, manager, and
other staff members who run certain departments.

Decision Making McDonald’s Malaysia

The McDonald's franchise in Malaysia plans to centralise the management of its domestic
enterprises. All of the significant decisions and actions taken at a lower level, as well as all of the
subjects and actions taken at a lower level, are required to receive approval from top management.
The power to make decisions is concentrated in the uppermost levels of management. It is a
system in which the most important decisions are formulated by a select group of directors at the
very highest level of the organisational structure, and then those decisions are disseminated to
managers at lower levels for the purposes of execution. The chairman of the board will make the
call on which topics are the most important. The implementations will initially be transmitted
from these directors to the CEO, and then they will be passed down to the more specialised
divisions. The office work at McDonald's is made easier to arrange and flow smoothly because to
the many benefits of being part of a centralised organisation. Every business has an overarching
objective, and when that objective is managed by a single entity, it is simple and straightforward
to concentrate on achieving that objective.
2.3 LEADING

Strong leadership and management are important for a company or organization to reach
its goals. Leadership is the ability to motivate others to achieve goals, while leading refers to the
ability to influence those around you and have management power. A good leader of a group or
organization should not be overpowering. The leader must be able to set a good example and
enhance the abilities and skills of subordinates in areas such as working together as a team,
effective communication, resolving conflicts, and strategies for group problem-solving. If the
leader does this, the subordinates will be capable of contributing to the company's success
(Organizational Leadership. n.d.).

Malaysian McDonald's may use a type of power which is legitimate power and reward
power in their operation. The first can be described as "positional power," which is legitimate
power. Legitimate power is a formal authority that comes from a person's position in an
organization and is backed by rules and even laws. Legitimate power may be distinguished from
informal forms of power by its formal nature. It is possible for disciplinary action to be taken
against subordinates who do not cooperate with the requests of their superiors. So, individuals
must work together and acknowledge the authority of one another's perspectives.

As the managing director of McDonald's Malaysia, Azmir Jaafar is in charge of figuring

out what the company needs in terms of resources, setting a vision, organizing staff efficiently,
and giving subordinates a deadline for submitting the company’s annual goals. In addition, he is
assigned the duty of ensuring that McDonald's Malaysia complies with all applicable laws and
regulations. In addition, he is given the authority to choose the business's general course of action
and strategy. This is the same as the CEO's principal duty to oversee and lead business operations
and give advice to the board on strategic matters to realize the company's mission and vision.

Reward power is a leader's responsibility to encourage other people by providing them

with increases, promotions, desired tasks, opportunities for training, and even simple
compliments.
 Other than that, McDonald's also provides the National Dual Training System (SLDN).
SLDN is an industry-focused training program that mixes institutional and workplace training.
Trainees at McDonald's are supposed to receive 70% to 80% practical training at the restaurant
and 20% to 30% theoretical learning in the classroom over 18 months. Sijil Kemahiran Malaysia
(SKM) Level 2 and Level 3 certificates will be given by the Department of Skills Development
(DSD) after the assessment and final exam have been passed. This certificate qualifies students for
employment at McDonald's restaurants and future employment (McDonald’s Malaysia is now a
certified institution for the National Dual Training System (SLDN) n.d).
If McDonald's Company chooses to operate in this most effective manner, it will definitely
generate people who are dedicated to their work and who have the ability to do their
responsibilities effectively. Azmir Jaafar said that each trainee gets a RM1,200 monthly living
allowance, free meals, medical and insurance benefits, and is fully sponsored through the training
program. This will allow students to concentrate on studying and obtaining the necessary abilities
rather than having to worry about meeting their daily financial obligations (McDonald’s®
Malaysia, 2022).
McDonald's workers show outstanding leadership, and the company and the others work
hard to inspire and support their employees. Generally, when it comes to communication between
the manager and their staff, managers do not really put up too many boundaries. They care for
their subordinates and are considerate of their needs. So, even at the level of the line workers,
there appear to be actual efforts being formed to motivate people. As a result of this work
environment, employees will not face stress or depression while at work.
 According to the leadership behaviors the McDonald corporation uses autocratic
leadership in their daily operations. The definition of autocratic leadership is a management style
in which the leader makes all the choices on their own. This style of leading works well when
mistakes are difficult to make or when decisions need to be made right away because too many
viewpoints can produce long decision-making delays that can be harmful. Because of their
position and the duties that come with it, they are responsible for not only controlling the activities
of the group but also ensuring that they are carried out well, and they do this consistently in the
presence of close observation (Just a Moment. . ., n.d.).

If McDonald's applies alternative styles of leadership, such as the democratic style or the
laissez-faire style, this could lead to complications if other workers are more concerned about
their right to autonomy.In this autocratic style, the crew members were not involved and did not
have authority in decision-making.McDonald's leadership team will express the viewpoints of its
senior managers.In other words, only a dictatorial style of leadership can succeed at the top of this
international food chain.
2.4 CONTROLLING

McDonald's is the leading fast food restaurant chain in the world with more than 40,000 locations
servicing more than 69 million people each day in more than 100 countries as of 2021. In
Malaysia, McDonald's serves approximately 13.5 million customers every month in over 320
outlets and employs over 15,000 Malaysians. In order to maintain the quality and performance of
their brand, they must have an effective and reliable control system. Control systems are classified
into three categories which are feedforward controls, concurrent control and feedback control.

Feed forward controls are future-focused aims to foresee issues and provide justification for
responding to them in advance. In the McDonald's chain logistics, quality is always given the
most weight and is regarded as the most important component. (Food Safety RSS,2016) stated
that all products entering McDonald's procurement and logistics chain have to undergo a strict
series of quality assessments. For instance, McDonald's requires suppliers to deliver potatoes with
lengthy fruit, buds that can't be too deep, and the amount of starch and sugar that must be kept
within a specified range in order to fulfil the quality standards for frying French fries. In addition,
McDonald's Malaysia only conducts business with vendors that possess a JAKIM-issued Halal
Certificate or a foreign Halal Certification Agency that has been authorised by JAKIM. JAKIM
must approve all new menus, menu modifications, swaps of raw materials, and exchanges of
suppliers. To verify that the Halal standards established by JAKIM are met, each procedure
includes a checklist that starts in the field, travels to the slaughter facility, and finally ends at the
processing plant. This is to guarantee that the food is halal and of the highest quality from the
farm to the plate.

Aside from feed forward control, concurrent control is equally vital in business management. A
screening control is a particular check point that must first be passed before an activity can
progress any further. Before moving on to the following phase, the activity, procedures, product,
or service in question needs to receive approval or fulfil a certain requirement. At this level,
McDonald's uses only ingredients that have passed rigorous safety and quality checks, as well as
those that comply with other requirements like the Supplier Quality Management System (SQMS)
and the Hazard Analysis Critical Control Point (HACCP) system. Besides, the crew at the
restaurant receives training to ensure that proper standards of quality control and food safety are
followed at all times. Not only does the concept of inclusive halal food quality matter, but the
cleanliness. As for McDonald's Malaysia, they have JAKIM do regular inspections to make sure
that their storage, serving, handling, and packaging meet Halal requirements. Every day, they also
check the food's temperature and the date it goes bad on a Food Safety Checklist. This is done to
make sure that all of our food safety needs are met. Furthermore, they have control over and
ensure that their employees prepare customer orders quickly so that their customers do not have to
wait long. McDonald's has stated that food orders for dine-in, take-out, and drive-thru will be
ready in 5 minutes.

The third type of control mechanism is feedback control, which is also known as post action
control. Post-action control concentrates on the organisational outputs after the transformation
stage is finished.It provides insightful data that helps managers evaluate the success of their
planning efforts. McDonald's also delivers healthy meals for health-conscious customers. the
substitution of trans-fat oils for saturated oil in their healthy menu which is a better choice for
customers who practice a healthy diet. With a variety of menu options, McDonald's can retain
existing customers while also attracting new customers. Direct supervision is another component
of feedback control practised. This type of supervision requires managers to be present in the
work area and to engage in conversation with staff members in order to assess whether or not the
actual performance matches the planning target.
CONCLUSION

In conclusion, a management function is essential in an organization. For instance, it helps in

achieving the goals. This is due to the fact that business operations can run smoothly and
employees have clear guidelines to follow in order to implement and achieve the mission that has
been established. Besides that, these four management functions are interrelated with each other
and cannot be skipped because it is a continuous process.

Most of the time, leadership is seen as a skill that involves taking action. However, putting
a leadership strategy into action can sometimes require some careful thought. So, the right kind of
leadership style makes it easier for a business to grow, makes it easier for employees to be
dedicated about their jobs, and makes it easier to manage skills and human resources.

All in all, the fact that McDonald's has grown from having nine items on their menu to
having 145 items on their menu demonstrates that they have good management control beginning
with planning, organising, leading, and controlling.
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https://www.mcdonalds.com.my/company/history
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https://managementstudyguide.com/organizational-leadership.htm