The purpose of this report is to find out the differences in the organization structures and approaches in management and organizational behaviour of two local restaurants, Pizza Hut Hong Kong and McDonalds Hong Kong.
Besides, the report is to find out the information of the restaurants through identifying and analyzing the following: motivation, leadership, human resource management, culture and diversity, information technology, communication. 2. Business Background Business background of Pizza Hut: Pizza Hut, Inc. is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes. Pizza Hut is a subsidiary of Yum! Brands, Inc. , the world's largest restaurant company.
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According to the corporate website, there are more than 11,600 store locations in 94 other countries and territories around the world. About their history, the legacy of Pizza Hut began in 1958, when two college students from Wichita, Kansas, were approached by a family friend with the idea of opening a pizza parlor. Although the concept was relatively new to many Americans at that time, the two brothers quickly saw the potential of this new enterprise. After borrowing $600 from their mother, they purchased some second-hand equipment and rented a small building on a busy intersection in their hometown.
The result of their entrepreneurial efforts was the first Pizza Hut restaurant and the foundation for what would become the largest and most successful pizza restaurant chain in the world. Hong Kong Pizza Hut provides dine-in, takeout and delivery service. At present, there are over 80 stores in Hong Kong and Macau. In recent years, McDonald’s has invaded the delivery food service market, so Pizza Hut’s market share has also been thinned. This is Pizza Hut Hong Kong was facing the challenge. Business background of About McDonalds:
McDonalds Corporation is the world's largest chain of hamburger fast food restaurants, serving in 119 countries and more than 30,000 restaurants. From a neighborhood restaurant established in Des Plaines, Illinois in 1955 to today, more than 30,000 restaurants in more than 100 countries worldwide, McDonald's is the largest quick service restaurant organization in the world. McDonald's recognized that to be successful, it would have to be flexible and adapt to societal changes. In 1975, McDonald's opened its first drive-thruTM window in Sierra Vista, Arizona to accommodate a more mobile society.
The company realized there was a need for a fast, quality morning meal and in 1973, the Egg McMuffinTM was introduced. In Hong Kong, there are over 200 McDonald's restaurants, and more than 10,000 McDonald's staff. In few years, Hong Kong McDonald launched delivery service, officially invaded the delivery food service market. Although McDonald Hong Kong had a lot of charity work, moreover they established of the Ronald McDonald Houses, McDonald prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
Organization Structure and Design .Organization Structure of Pizza Hut Figure1. Hierarchy Division of Pizza Hut: Supervisor: A supervisor is a team leader in a position of trust in business. He / She always are an assistant to Manager. They have possession of part of the manager power, such as the allocation of the daily workflow, and void order of power. Restaurant General Manager: Restaurant General Manager is responsible for all problem of the restaurant. Not just manage all employees, but also they need to manage restaurant facilitates and service quality etc. In addition, they need to set daily sales target to fulfill organization goal.
Operations Manager: They responsible for ensure that business needs to use as few resources as possible to meet customer requirements efficiently and effectively. Moreover, they need to establish operation policy to all operations department staff, included all restaurants manager. Chief executive officer: is the highest-ranking corporate officer (executive) or administrator in charge of total management of an organization. An individual appointed as a CEO of a corporation, company, organization, or agency typically reports to the board of directors. At present, Hong Kong Pizza Hut chief executive officer is Henry Yip.
Figure2. Functional Division of Pizza Hut: Finance department: Finance department is often simply defined as money management or the management of the fund. The major objectives of corporate finance are maximizing shareholder value. Marketing department: Commercial marketing of individuals or organizations, including commercial enterprises, governments and institutions to promote their products or services sold to other companies or organizations, in turn, resell their practice, and use them as components in their products or services, or use them to support their actions. Organization Structure of McDonald Figure3. Hierarchy Division of USA Headquarter McDonalds: Figure4. Hierarchy Division of Hong Kong McDonalds: Trainer: Trainer in McDonalds not the same in supervisor, they are same in senior staff to be an assistant to support Supervisor. Team Leader: Team Leader in McDonalds is the same in supervisor. Crew: Crew in McDonalds response for differences work in restaurant, it included Kitchen, cleaning, cashier, customer service representative and first line quality control. Figure5. Area division: Figure6.
Functional Division of McDonalds: Human Resources Management Department: Human Resource Management is an organization of employees or the management of human resources. This attractive, is responsible for staffs election, training, appraisal, rewards, and is also responsible for organizational leadership and culture, and to ensure that employment and labor law. Held in the employee's wishes and legally authorized collective bargaining agreement, human resources usually also will serve as the company's principal liaison with staff representatives
Purchasing Department: Purchasing refers to the business or organization to attempt to obtain good or services, in order to achieve business goals. Although there are several organizations trying to set standards in the purchasing process, the difference between the processes organizations.
Compare the Similarities and Differences of Organization Structure between Pizza Hut and McDonald’s
Similarities of Organization Structure between Pizza Hut and McDonalds: Pizza Hut and McDonalds are the same using the Functional Division and Hierarchy Division.
The relationship between the function is the position of the specialist, and other areas. In general, specialist will have the authority to adhere to the line manager, to achieve any of their instructions. In many large and global companies are always using Functional and hierarchy division to descript their company structure. In addition, these structures can make employee clear their job opportunities. Similarities of Organization Structure between Pizza Hut and McDonalds: Although the two companies are well-known company in the world, But in Hong Kong’s business size are different.
Pizza Hut owned by Yum! Brands, Inc, but the business in Hong Kong is operated Franchise by Jardine Matheson. Region on district administration is relatively simple, because of only china regional business. On the other hand, Hong Kong McDonalds is not operated franchise of the way. Hong Kong McDonalds business was monitored by the management of the Asia (Figure5. ). Asia McDonalds Managed by the U. S Headquarters of non-Franchise operating worldwide business. So the difference of these companies is Hong Kong McDonalds was implemented area division models for global company structure.
Approaches to Management ; Organizational Behavior 5. 4 Motivation Motivation is the degree to which an individual wants and chooses to engage in certain specific behavior. People’s behavior is determined by what motivates them. Their performance is a product of both ability level and motivation. Therefore, the two companies are using the extrinsic and Intrinsic Motivation methods motivate employees. In the past, McDonalds had to hire employees with too low salaries, so that McDonalds scolded by social. On the contrary, Pizza Hut’s hourly rate is high within the food service industry.
Since Hong Kong Government has implemented a minimum wage, McDonalds has also begun to focus on the welfare of the employees. Pizza Hut was using two motivation methods: extrinsic motivation and intrinsic motivation to motivate employees. For the extrinsic motivation, Pizza Hut’s crew salary increased to HK$ 28 from HK$ 21 (After the implement of minimum wage). Moreover, Pizza Hut’s salaries included restaurant Tips, Tips depend on customers given to restaurant and divide by the total number of employees of the restaurant. Not just salary, but also Pizza Hut given bonus to all full time employees per year.
And then, Pizza Hut established the outstanding staff award to motivate employee. About the award recommended by the restaurant manager, the winner will have HK$ 300 bonus. In addition, according to Hong Kong’s legal, Pizza Hut also provided Mandatory Provident Fund (MPF) to employee. Lastly, Pizza Hut provided differences fringe benefits for employees, included Medical benefit, insurance discount, and 20% off staff discount. Staff discount not just included pizza hut, but also is included all related Jardine Matheson subsidiary companies, for example: Maxim's Caterers Limited and Wellcome.
For the intrinsic motivation, Pizza Hut will be timing implementation of the job rotation method to training staff. Employees not just learn their basic work, but also they have the opportunities to learn cashier or kitchen. Finally, staff can study the distribution of work management to support supervisor. Give rise to sense of challenge, receiving appreciation and positive recognition. Moreover, the employee begin to work, supervisor will report the company’s new information to staff, and the daily sales targets.
In addition supervisor will be highly praised the staff for good performance at the briefing. McDonalds was the same using two motivation methods: extrinsic motivation and intrinsic motivation to motivate employees. For the extrinsic motivation, McDonalds’s crew salary increased to HK$ 28 from HK$ 19 (After the implement of minimum wage). Moreover, the salaries included Profit sharing and restaurant cash incentive, like pizza hut tips bonus. And then, McDonalds established the outstanding staff award to motivate employee too. In addition, according to Hong Kong’s legal, McDonalds provided MPF to employee.
Lastly, McDonalds provided differences fringe benefits for employees, included Group Term Life, Group Medical Insurance, Group Dental Plan, Education Sponsorship Program, and Professional Management Training both locally. About fringe benefits, McDonalds better than Pizza Hut. For the intrinsic motivation, McDonalds was the same in pizza hut intrinsic. In Fact, all of the food service industry company is using these methods to rise to sense of challenge, receiving appreciation and positive recognition etc. 5. 5 Leadership Hierarchy Division of Pizza Hut:
Hierarchy Division of McDonalds: Human Resource Management Human Resource Management is the strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objective of the business. The Human Resources Management Process: For the McDonalds in people philosophy, they have a specific people vision "To be the best employer in each community around the World. " Being the best means “opportunities, training and development; satisfaction, rewards and recognition”.
Moreover, McDonalds make a promise to their employee. To all their present and future employees, McDonalds’d like you to know that there are committed. “We value you, your growth and your contributions. On the other hand, McDonalds have in place 5 people principles to reflect McDonald’s values and commitment to their people. It includes: (1) Respect and recognition (2) Values and Leadership behaviors (3) competitive pay and benefits (4) Learning, development and personal growth (5) Resources to get the job done. About the human resources management, McDonalds focus on every employee more than Pizza Hut.
Recruitment: Pizza Hut and McDonalds are using these methods to attracting applicants. Internet-based Advertisement / Print-ad in Magazines or newspaper / Employee Referrals / Applicant Initiated / Job Fairs / Employment Agencies Selection: The process of screening job applicants to ensure that the most appropriate candidates are hired Pizza Hut and McDonalds are use differences types of selection Devices. Pizza Hut: Application form -> interview (restaurant manager) -> Reference checks McDonalds: Application form nd Questionnaire -> interview (restaurant manager) -> Reference checks Orientation: New employee orientation effectively integrates the new employee into your organization and assists with retention, motivation, job satisfaction, and quickly enabling each individual to become contributing members of the work team. Pizza Hut and McDonalds: Introduction (Rules, Policy, Organizational Structure and Company information) and a tour of the workplace Training: A basic operation in the work of the manager is to develop people and to direct, encourage and train employee.
Those companies are using these methods to improve the availability, quality and skills of staff. Pizza Hut and McDonalds are using e-Leaning of job description, establish Lesson for differences hierarchy level, such as crew need to study customer service standard, how to handling complain; senior need to study how to contribute work to another colleague; Manager need to study manage in restaurant etc. Performance management: Approach to developing the capabilities of employees Pizza Hut and McDonalds in addition will be kept by the supervisor to practice role play training to subordinate.
Moreover, the two companies will also hire external Mystery consumer companies to measure restaurant can achieve the setting of customer service standards, developed training plan or to enhance the training program based on test scores. Another will be conducted annually upward appraisal, Managers are appraised by their staff. 5. 7 Culture & Diversity Organizational Culture between Pizza Hut and McDonalds: Organizational culture is the collective behaviour of people that are part of an organization, it is also formed by the organization values, visions, norms, working language, systems, and symbols, it includes beliefs and abits.
Strong culture can create a stronger employee commitment to the organization. As the result, every organization must have their differences organizational culture. For the Pizza Hut, the mission statement is “With Customer Mania corporate culture, we ensure every dining occasion is a delightful experience. We promise” and the vision are to be the Leading Casual Dining Restaurant in Hong Kong and Macau – bringing our customers enjoyable yet affordable European cuisine by capitalizing on our brand equity and to be the No. 1 Pizza Delivery Provider offering world class pizza delicacies always hot and on time.
Slogan of Pizza Hut: “With Customer Mania corporate culture, we ensure every dining occasion is a delightful experience. ” In order to fulfill its mission, Pizza Hut has develop some unique, policies, principles, rules, processes and procedures, the sum total of which from the Pizza Hut culture:
- Open door Policy: Managers doors are open to employees at all levels, because the manager dose not just do all about manage restaurant. During the peak hours, manager will work with general staff together. Therefore, manager can easier to listen to the voice from the employee.
- Role culture – Bureaucratic control: roles and job description is most essential than the individual and position is the main source of power, control by procedures and rules, coordinated by a few senior managers.
- On the Pizza Hut, everything always have their standard for staff to fulfill, such as food quality standard, dress and grooming standard etc. If their staff cannot meet the standard, they will blame by the manager.
- Ethical Culture: Pizza Hut has a very powerful and positive influence on employee behavior, focus on means as well as outcomes.
- Customer Responsive Culture: Since Pizza Hut is very focus on increase customer satisfaction.
They hiring the type of employees, for example ones with a more interest are helpful and friendly personality to serving customer. Having great listen skills to have ability to listen to and understand messages sent by the customer. Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction. Having conscientious, caring employees willing to take initiative even outside their normal job duties For the McDonalds, the mission and values statement is to be our customers' favorite place and way to eat.
Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience. In order to fulfill its mission, Pizza Hut has develop some unique, policies, principles, rules, processes and procedures, the sum total of which from the McDonalds culture:
- Customer Responsive Culture: McDonalds same with Pizza Hut, they are focus on increase customer satisfaction. They hiring the type of employees, for example ones with a more interest are helpful and friendly personality to serving customer. Having great listen skills to have ability to listen to and understand messages sent by the customer. Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction. Having conscientious, caring employees willing to take initiative even outside their normal job duties
- Workplace spirituality: Recognize that their employees have an inner life, moisturize and nourish meaningful work, a place within the community. Since McDonalds focus on charity work, such as established Donald McDonald house Charities to offering a supportive environment, parents are able to care for their sick children during an incredibly stressful time. In addition, McDonalds often motivate employee to participate more about charity work.
- People Orientation: Degree to which management decisions take into account the effects on people in the organization. Organizational Diversity between Pizza Hut and McDonalds: Managing diversity accepts that the workforce consists of a diverse population of people.
The diversity consists of visible and non-visible differences which will include sex, age, background, race, disability personality and work style. It is founded on the premise that harnessing these differences will create a productive environment in which everybody feels valued, where their talents are being fully utilized, and in which organizational goals are met. According to the Hong Kong legal’s on eliminating age discrimination in employment, employers have the prime responsibility for encouraging equal employment opportunities and for eliminating discrimination in the workplace, so Pizza Hut and McDonalds are also comply with the law.
Employees are Pizza Hut and McDonald’s greatest asset. But two companies have their own organizational diversity. For the pizza hut, there are more than 4,000 people, since pizza hut focus on customer satisfaction and customer service quality than McDonalds, so that Pizza Hut dose not employs any persons with intellectual disabilities in secretly. Contrary, McDonalds hire people not because of the people physical abilities and quality. For example, McDonalds staff Wong Man Yu awarded “Outstanding Disabled Employees Awards” by the Labour Department in 2006.
It reflect McDonalds support their employees have any physical problem. 5. 8 Information Technology Information Technology is the use of computers and software to manage information. In some companies, this is referred to as Management Information Services (or MIS) or simply as Information Services (or IS). The information technology department of a large company would be responsible for storing information, protecting information, processing the information, transmitting the information as necessary, and later retrieving information as necessary.
Nowadays, many organizations are using information technology to increase work efficiency and effectiveness. Since information technology can increase business performance, better decision making based on information and greater accessibility to coworkers. So that, Pizza Hut and McDonalds are use many information technology to support their business: (1) Information Systems: accounting information system to record or calculate all about sales, salaries etc… inventory system to monitor store inventory and though internet to purchase daily restaurants needs.
Point of sales systems. Office automation systems, transaction processing systems, distribution systems, etc. (2) Electronic Commerce System: this part is very important in business, they’re use to selling, delivering, servicing and paying for products and services using internet. For the payment, Pizza Hut using credit card reader and Visa Pay wave; McDonalds using octopus and Visa pay wave. (3) Networked Computer system: Linking individual computers to create an organizational network for communication and information sharing.
They are using e-mail, instant messaging, Voice-mail to dealing with online delivery business, Fax machines to receive order confirm from food supplier. Electronic Data Exchange (EDI). Teleconferencing. Videoconferencing. 5. 9 Communication Communication between managers and employees provides the information necessary to get work done effectively and efficiently in organizations. Communication major functions are Control, Motivation, Emotional Expression and Information. Communication is very important part of business. Pizza Hut and McDonalds use interpersonal methods.
For example: Face-to-face, Telephone, Group meetings, Formal presentation, Memos, Traditional Mail, Fax machines, Audio-and videotapes, Daily briefing, Hotline, E-mail, Voice mail and Teleconference to communicate with employee. Face to face, telephone and Memos are basic tools to connect employee and management. But about the organization contact restaurant, they are use daily briefing, E-mail to update information about organization.
Through identifying and analyzing the following: motivation, leadership, human resource management, culture and diversity, information technology, communication. I found that:
For the organization structure, the difference of these companies is Hong Kong McDonalds was implemented area division models for global company structure. On the other hand, Pizza Hut just implemented hierarchy and functional Division. For the approaches to management & Organizational behaviour, about the motivation, McDonald’s hourly salaries have been low for long. Yet, ever since Hong Kong Government has implemented the minimum wage, the corporate has no choice but to increase salaries of the workers. On the contrary, the average hourly wages of Pizza Hut workers are relatively higher than McDonalds.
About the Leadership, Human Resources Management, Information technology and communication, Since Pizza Hut and McDonalds are the same industry in food service restaurant, which means their organizational behaviour always the same. But about the diversity, McDonalds is better than Pizza Hut, it is because McDonalds hire people not because of the people physical abilities and quality. If Pizza Hut and McDonalds can solve above problem, they can improve their business more.
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