Mcdonald's Organization Chart

MCD The type of chart that is exhibited is hierarchical. The organization is hierarchical, and the structure of the organization is based on function. The key units are "restaurant," HR, Operating, Financial and Marketing. There are four geographic units under operations. These reflect the largest markets for the company. Note that in this structure, marketing is global, not specific to any one geography.

This is actually something that the company recently had changed, where it used to do its marketing based on each individual country, now it tries to have a more globally cohesive marketing strategy. I would not suggest any changes to the organizational chart at McDonalds. Quite frankly, this is one of the best run companies in the world. Changing something that works just for the sake of change is bad management. There needs to be a reason for the change. Right now, McDonalds is not implementing any new strategy.

They are still trying to win their core restaurant business, using premium positioning in the quick service segment, and they are trying to grow globally. There is no one specific focus for geographic growth that would need to be singled out among the different geographic groups. Typically, the structure has smaller entities grouped in with larger ones -- so Africa (small) is in with Asia (large), and Canada (small) is in with Latin America (large). The major functional divisions represent the major functions that McDonalds performs (marketing, operations and HR).

There is an idea to feature online and social media marketing within the Global Marketing department, but the org chart for that department has not been revealed - this division might well exist. So given that the current organizational chart works well for McDonalds, and has done so for many years, and given that there is no major change in strategy that would require a new organizational structure, it is recommended that the company maintains the organizational structure that it already has.

Vacancies will, of course, need to be filled, and the people in place need to have specific areas of focus (so for example India can be a focus country in APMEA. The only thing that might be worth considering is creating a new post for EVP, Information Technology, something that is frequently recommended to give IT a boost in companies (Cullen & Pohlmann, 2007).

Given the importance of efficiency in the company's success, McDonalds is likely to gain significant benefit from having a high level of ability with respect to the collection, management and use of data (Johnson, 2013). There is undoubtedly a department somewhere within the company that handles this, but perhaps IT is something that should play a more important role in the company going forward. I like many aspects about the current chart. First, it is simple. The basic functions are the key divisions.

It doesn't look like there are any C-suiters who don't belong. Second, everything including marketing is considered to be global. This allows for a coherent brand identity to be created, something that has tremendous value, for example in enhancing the quality reputation of the company thereby allowing it a 20% net margin on low-priced goods. Operations being subject to regional decisions allows for things like supply chain coordination, but there is still national and regional-level flexibility further down the chart for things like menu decisions.

Having executive oversight of geographic regions, however, does create some oversight for the company in this area. The current organizational chart would best suit the company. There is a case to be made that the company should focus on a strictly geographic organizational chart, but the current approach allows.