This assignment is answering the task to "compare the organisational structure of two direct competitors in an industry of your choice. To what extent and how does the chosen organisational structure reflect the specific corporate strategy of these companies? Discuss the respective structures critically". The assignment is comparing McDonald's and Subway, the two main competitors in the fast food industry. The chosen companies are the two market leaders in the fast food industry. Since Hill and Jones point out that a corporate strategy formulation comes first followed by designing the organisational structure, the following sections will describe the corporate strategies of both companies first. Later on, it will be evaluated critically what kind of organisational structure each of the competitors are built on and which one has the better fit with regard to their strategy. In the end, concluding remarks and an outlook will be provided.
The organisational structure of any company can be understood as a vehicle that depicts the activities and connections of various divisions, business units and functions of that company. It helps managers to comprehend and to control the flow of activities. The organisational structure is highly important to be established appropriately because it presets the paths on which a company can create value and ultimately determines the efficiency of the value chain. There are various problems that can come up especially in large companies like a lack of coordination, information distortion and motivational problems. The weaknesses of a organisational structure are to be kept in mind when setting up a corporate strategy or else the structure needs to undergo changes in order to follow the strategy. The fit between a chosen corporate strategy and the structure of an organisation has an important influence on how smooth the different organs of a companys can work together to fulfil the corporates objectives.
Table of contents
1. Introduction
2. Company backgrounds
2.1. McDonald’s company background
2.2. Subway’s company background
3. Corporate strategies
3.1. McDonald’s corporate strategy
3.2. Subway’s corporate strategy
4. Organisational structures
4.1. McDonald’s organisational structure
4.2. Subway’s organisational structure
4.3. Comparison of the competitors organisational structure
5. How good do the structures reflect the corporate strategies of the competitors?
6. Conclusion and Outlook
Objectives and Core Themes
This assignment aims to provide a critical comparative analysis of the organizational structures of two fast-food market leaders, McDonald’s and Subway, and to evaluate how effectively these structures support their respective corporate strategies.
- Theoretical analysis of the relationship between corporate strategy and organizational design.
- Comparative review of historical developments and market backgrounds of McDonald’s and Subway.
- Evaluation of corporate growth strategies and operational business models.
- Critical analysis of current organizational structures and their agility in responding to market trends.
- Assessment of the link between organizational flexibility, franchising models, and long-term sustainability.
Excerpt from the book
1. Introduction
The organisational structure of any company can be understood as a vehicle that depicts the activities and connections of various divisions, business units and functions of that company. It helps managers to comprehend and to control the flow of activities. The organisational structure is highly important to be established appropriately because it presets the paths on which a company can create value and ultimately determines the efficiency of the value chain. There are various problems that can come up especially in large companies like a lack of coordination, information distortion and motivational problems. The weaknesses of a organisational structure are to be kept in mind when setting up a corporate strategy or else the structure needs to undergo changes in order to follow the strategy. The fit between a chosen corporate strategy and the structure of an organisation has an important influence on how smooth the different organs of a companys can work together to fulfil the corporates objectives.
This assignment is answering the task to "compare the organisational structure of two direct competitors in an industry of your choice. To what extent and how does the chosen organisational structure reflect the specific corporate strategy of these companies? Discuss the respective structures critically". The assignment is comparing two main competitor in the fast food industry: One is McDonald's and the other one is Subway. The chosen companies are the two market leaders in the fast food industry. Since Hill and Jones point out that a corporate strategy formulation comes first followed by designing the organisational structure, the following sections will describe the corporate strategies of both companies first. Later on, it will be evaluated critically what kind of organisational structure each of the competitors are built on and which one has the better fit with regard to their strategy. In the end, concluding remarks and an outlook will be provided.
Summary of Chapters
1. Introduction: This chapter defines the significance of organizational structure within a company and outlines the research objective of comparing the structures of McDonald's and Subway.
2. Company backgrounds: This section details the historical evolution of both fast-food chains, highlighting their growth from small businesses to global corporations.
3. Corporate strategies: This chapter explores the strategic growth plans and mission statements of both companies, focusing on McDonald's "Plan to Win" and Subway's franchising approach.
4. Organisational structures: This section provides a detailed analysis of the management hierarchies and organizational designs of both companies and compares their specific structural characteristics.
5. How good do the structures reflect the corporate strategies of the competitors?: This chapter critically evaluates how well the existing organizational structures align with the strategic goals, noting challenges in growth and profitability.
6. Conclusion and Outlook: This final chapter synthesizes the findings and provides an assessment of the future viability of both brands in light of current market pressures and the need for business practice changes.
Keywords
Organizational Structure, Corporate Strategy, Fast Food Industry, McDonald’s, Subway, Franchising, Strategic Management, Value Chain, Market Penetration, Business Development, Organizational Design, Sustainability, Growth Strategy, Operational Efficiency, Corporate Governance
Frequently Asked Questions
What is the core focus of this assignment?
The assignment provides a critical comparison of the organizational structures of two major fast-food competitors, McDonald’s and Subway, and investigates how well these structures support their corporate strategies.
What are the central thematic areas discussed?
The themes include the historical backgrounds of the companies, the formulation of their corporate strategies, their specific organizational hierarchies, and their adaptability to market changes.
What is the primary research objective?
The primary goal is to determine the extent to which the chosen organizational structure of each company effectively reflects its corporate strategy and to evaluate which firm exhibits a better strategic fit.
Which scientific methodology is applied?
The paper employs a critical analysis and comparison based on existing corporate reports, business literature, and industry data to evaluate organizational design and strategy implementation.
What is covered in the main body of the text?
The main body covers the historical development, the strategic growth plans, the functional and divisional organizational structures, and a critical analysis of current performance indicators.
Which keywords best characterize this work?
Key terms include organizational structure, corporate strategy, franchising, strategic management, and the competitive landscape of the fast-food industry.
How does McDonald’s organizational structure differ from Subway’s?
McDonald’s utilizes a more centralized, divisional approach with clear hierarchical layers, whereas Subway relies on a highly decentralized, lightweight franchise-based system that treats individual national markets more independently.
What conclusion does the author draw regarding Subway’s future?
The author suggests that while the lightweight structure facilitated rapid growth, it is now hindering the radical strategic changes required to face current market challenges, potentially threatening the brand's survival.
Does the author perceive McDonald’s strategy as more stable?
Yes, the author identifies McDonald's as having a more stable strategy backed by clear hierarchies and long-term planning, positioning it better for future growth compared to its larger competitor, Subway.
Why is the "fit" between strategy and structure emphasized?
The author argues that a misalignment between a chosen strategy and the organizational structure can lead to inefficiencies, poor coordination, and an inability to respond to external market trends like the growing health-consciousness of consumers.
- Quote paper
- Patrick Schneider (Author), 2019, McDonald’s and Subway. A critical comparison of their organisational structures and fit to the chosen corporate strategy, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/464712
