Principles of Management Project
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The principles of project management are concerned with the duty of planning, managing and organizing the organization’s resources in order to achieve an ultimate success in the company’s goals and objectives. Completion and success of a project requires total commitment and coordination of a team who work together to create products or service. The products from such teams are then used to add value or benefit to the consumers of such products and thereby fulfilling the common goal of an organization. Efficient realization of goals in any organization or company requires the application of good management skills in all the different sections, activities or process that comprise the whole procedure of creating a product or a service. This enhances the specific roles and personal responsibilities of all the participants or employees of a company. Principles of project management are usually learnt from experience and it is the responsibility of the managers to exercise them in the different departments of a company (Adams, 2007, p12). This paper undertakes research on two companies within the food and beverage sector. The study seeks to explain how each of these companies has utilized and applied the principles of management to realize their success in the public domain.
McDonald is a corporation that forms one of the largest food chains in the world. The company started its operations in 1948 with a restaurant started by two brothers Dick and Mac McDonald in California (Kroc, 1992, p05). Over the years the restaurants have expanded to the international market. The company generally deals in selling fast foods such as cheeseburgers, hamburgers, French fries, breakfast food, milkshakes, drinks, desserts and chicken products. It has also introduced the sale of wraps, salads and fruits. A majority of the restaurants are operated by individuals who hold franchise agreements or joint ventures with the corporation. Only 15% of them are owned and operated directly by the corporation (McDonald’s RFIA, 2009)
McDonald being a large entity in the international market has its defined mission, corporate ethics and an organizational structure that guide the daily running of the restaurants. McDonald’s mission statement is to be the world’s best quick service restaurant. Its definition of best refers to providing quality, clean and a valued service that will lead to customer satisfaction. To achieve this mission it has focused on three strategies. This includes being the best employer within the community, delivering excellent service to customers and ensuring profitable growth through expanding its operations and adoption of innovations and technology. Its corporate ethics is all about living its values every day, taking actions, achieving of results and to enhance communication with its customers and its key stake holders. McDonald ethics also involve commitment customer values, giving back to community, good conduct and striving to maintain the company profitability. It also bears itself with a social responsibility of giving back to the community. It is for example involved in a lot of sponsorship programs and charities such as the McDonald’s House & Ronald McDonald’s children’s charities.
Since it started its operations it has given millions of dollars back to the community. It is also greatly involved in disaster relief and other partnerships within the society. Other social responsibilities include energy efficiency, sustainable packaging and waste management and a green restaurant design. The foundation of the company is balanced among three key groups namely the owners or operators, suppliers and the company employees. Having this three key foundations the company then lays down an organizational structure that defines relationships, controls, procedures and the decision making process within the company. All the restaurants that are under the McDonald are structured along functional lines. They are headed by a chief Executive who over sees the activities of five major areas. These includes the operations which handle the equipments and the franchising, development which handles property and construction, finance which deals with the supply chain and new product developments, Marketing and finally the human resource whose duty is to deal with matters related to customer service, hygiene, security and personnel. Each of these five sectors is headed by managers answerable to the Chief Executive (McDonald’s RFIA, 2009).
In practice of ensuring quality service, McDonald ensures adherence to its personnel policies. All the employees are trained how to prepare and also how to present meals to the customers. All the procedures are strictly observed by all the employees. The personnel policies are geared towards programs that attract, reward, energize and retain talented individuals who enhance the realization of business goals. They also offer very competitive packages and benefits to their employees. Such benefits include health insurance benefits, compensation programs, and investment programs among others. The company also enforces control procedures to ensure that the company’s values are met. The control procedures are affected within the whole system specifically on the products, employees, suppliers and also on all the processes in the supply chain. The raw materials are always checked regularly on intervals to ensure of their quality and safety. Controls procedures of all raw-materials and food stuff are imposed on all the suppliers, transporters and also on the staff of all the restaurants. Other controls include ensuring quality service to customers, cleanliness and continuous training of its staff (McDonald’s RFIA, 2009).
The company is today the largest food chain in the world. It has its operations in 121 countries and it serves almost 47 million customers every day. It has over 31,000 restaurants and has been an employer of about 1.5 million people. Due to its large size, the company manages to get very high income from its operations. The main revenue of McDonald comes from rent, fees and royalties that are paid by the franchisees and also from the sales of the company operated restaurants. In the year ending 2008, the company managed to earn revenue totaling $ 6.1B in the first quarter, $6.3B in the second quarter, $5.6B in the third quarter and $ 5.6B in the fourth quarter. This lead to annual revenue of $ 23.4 B as reported on 01/26/2009. This was a 3.2% increase from the 2007 annual revenue. (McDonald’s RFIA, 2009)
Generally McDonald does not make any contributions to the political parties or any political affiliations with political organizations. This however does not mean that the political policy issues do affect the company. Sometimes the company finds it in interest to contribute to politics but such contributions are made inform of gifts, loan or deposits. Other political factors include influences from government policies and regulations, trading policies, international pressures as well as wars and conflicts in the countries it operates. There is also the economic influence such as the economic situation currently in the US. Economic booms and depressions as well as factors such as interest rates, inflation, taxation and other fiscal and monetary issues affect its performance.
Social factors also play a major role in that they determine the social lifestyles of individuals, the population, and tastes, ethnic and religious factors, and advertising among others. Finally we have the technological factors which greatly influence the competition grounds of the company. Research is a major consideration in determining the technology used in a company. In the SWOT analyses the company has an advantage due to its large size. It bears the strengths of being a market leader and also having a very strong brand. However it suffers weaknesses such as low employee productivity, and high SG&A expenses especially in Europe. Another weakness is the occurrence of operating losses in non-Macdonald brands and in regions such as Latin America. It can make use of rising opportunities such as alliance with the Warner home video, make innovations in its menu and take advantage of the increasing Hispanic population. Some threats that face the company operations include rising prices of raw materials, health issues and saturation in the market (McDonald’s RFIA, 2009).
Another company within the food and beverage industry is the Burger King Company (BK). It is a company that deals with a chain of restaurants globally in the business of serving fast foods. The company started its operations in 1954 in Florida its pioneers being James Mclamore and David Edgerton. It has since used the franchise strategy to expand its business. The company is basically involved in the sale of fast foods such as Hamburgers, soft drinks, desserts French fries, sandwiches among other fast foods. It also has fish and chicken products in its menu. Other investment companies such as TPG capital, Bain Capital and Goldman own more than 30% of the company (McLamore, 1997, p08).
The mission statement of Burger King is to prepare and sell quick service food to fulfill their customer’s needs more accurately, quickly, courteously and in a cleaner environment than their competitors. Their mission also pledges to conduct their business ethically and with the best employees. The mission further indicates that the company strives to continue its profitability and provide career opportunities for the willing members in the organization. Its corporate ethics is directed towards an expanding tradition centered to good corporate citizenship. The organizational structure comprises directors, managers and team members at different sectors.
Burger King is committed to retaining the best employees within their premises. They are involved in continuous training of their employees on career and social matters. This ensures that the duties performed by these employees are updated to meet the quality and the needs of customers. The company has invested in very desirable personnel policies which are strictly observed within the company. The company strives to honor value and respect the differences between the employee’s franchisees, suppliers and customers. The management takes upon itself as a responsibility to maintain a harmonious environment for easy accomplishment of goals and objectives.
At the community level, the company has a social responsibility of strengthening the relationships between the company and the society mostly by investing in the people within the surrounding areas and also those who are beyond reach within the immediate society. Since its incorporation the company has supported various organizations and organizations which are committed to promote success in various individuals in different fields. It also gives back to the community by involving its self in various projects that are geared towards improving the quality of life for individuals in various communities. Control procedures are strictly maintained in products quality, company image, operations and also the design of the procedures. Approved procedures must be adhered to especially in food preparations and presentation. Other controls include updated staff training to ensure quality service to customers (BK Corporation, 2009).
Burger King is the second largest fast food restaurant with more than 11000 restaurants in 71 countries. 66% of these restaurants are in the US while about 90% are privately owned and operated. The company has employed more than 37,000 employees and serves more than 4 million customers per day. The company reported increased revenue in its fourth quarter ending last year. Total revenue for the fourth quarter was $ 646 million and the total revenue for the whole year was $ 2.455 million. This marked a great improvement from the performance in the year 2007. (BK Corporation, 2009)
In PEST analyses, the political and economic factors have always influenced the company operations, services, prices, related products and the market in general. Technological factors have come as a big challenge since the company has to install the recent technology that satisfies the customers. Technological factors also affect the business due to threats that may be posed by the competitors and upcoming businesses. Social factors affect the marketing of products due to the ever changing population especially the growing Hispanic population. This makes the management to focus on changes in products or menus that are marketable to the present community. In the SWOT analysis the company also has an advantage over many other restaurants due to its wide range of restaurants globally. The menu of burgers is also an advantage since they are flame broiled and not fried. The market is also not very saturated with the Burger King commercials and therefore this gives it a greater advantage of expanding business in such areas.
However the company suffers some weaknesses in that 90% of its restaurants are franchised and this makes it very difficult to change image of the company. Their menu has been described as outdated with no salad and also their old restaurants are not well maintained in terms of cleanliness. The company can however take advantage of other opportunities in the market such as merging or partnering with other food and beverage companies. It can also partner with other large retail shops to market its products. Burger King can also make improvements in its menu by incorporating more healthy foods that are not offered in other fast food restaurants. Even though the company may consider these opportunities, it may face market threats such as innovation which is important for any thriving business today, legal litigation against fast foods that creates a bad image for them and also the invasion of the market by other no-burger chains which have benefits in the burger market (BK Corporation, 2009).
In comparison both McDonald and Burger King are companies that deal with fast foods and are both operating in the international market. Both companies have used the franchise strategy to expand their business globally. McDonald is much bigger corporation than Burger King. It is older in the market and its expansion in the international market is greater. McDonald has a larger market command than Burger King. Its advantage in terms of size gives it a lead in revenue where the revenue for McDonald is way ahead of Burger King. Even though both companies have franchises, Burger King has other companies that have invested in it. Its mission and vision is more clearly defined than that of McDonald. Even though both companies are involved in social responsibility McDonald seems to be more focused in giving back to the community. Its company organization and level of controls is very clearly defined than burger king and this makes it very easy for it to succeed in project management.
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