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Leadership can be defined as a process by which one individual influences others toward the attainment of group or organizational goals. Three points about the definition of leadership should be emphasized. First, leadership is a social influence process. Leadership cannot exist without a leader and one or more followers. Second, leadership elicits voluntary action on the part of followers. The voluntary nature of compliance separates leadership from other types of influence based on formal authority. Finally, leadership results in followers' behavior that is purposeful and goal-directed in some sort of organized setting. Many, although not all, studies of leadership focus on the nature of leadership in the workplace.

Leadership is probably the most frequently studied topic in the organizational sciences. Thousands of leadership studies have been published and thousands of pages on leadership have been written in academic books and journals, business-oriented publications, and general-interest publications. Despite this, the precise nature of leadership and its relationship to key criterion variables such as subordinate satisfaction, commitment, and performance is still uncertain, to the point where Fred Luthans, in his book Organizational Behavior (2005), said that "it [leadership] does remain pretty much of a 'black box' or unexplainable concept."

Leadership should be distinguished from management. Management involves planning, organizing, staffing, directing, and controlling, and a manager is someone who performs these functions. A manager has formal authority by virtue of his or her position or office. Leadership, by contrast, primarily deals with influence. A manager may or may not be an effective leader. A leader's ability to influence others may be based on a variety of factors other than his or her formal authority or position.

In the sections that follow, the development of leadership studies and theories over time is briefly traced. Table 1 provides a summary of the major theoretical approaches.

Table 1
Leadership Perspectives

Historical Leadership Theories
Leadership Theory Time of Introduction Major Tenets
Trait Theories 1930s Individual characteristics of leaders are different than those of nonleaders.
Behavioral Theories 1940s and 1950s The behaviors of effective leaders are different than the behaviors of ineffective leaders. Two major classes of leader behavior are task-oriented behavior and relationship-oriented behavior.
Contingency Theories 1960s and 1970s Factors unique to each situation determine whether specific leader characteristics and behaviors will be effective.
Historical Leadership Theories
Leadership Theory Time of Introduction Major Tenets
Leader-Member Exchange 1970s Leaders from high-quality relationships with some subordinates but not others. The quality of leader-subordinates relationship affects numerous workplace outcomes.
Charismatic Leadership 1970s and 1980s Effective leaders inspire subordinates to commit themselves to goals by communicating a vision, displaying charismatic behavior, and setting a powerful personal example.
Substitutes foe Leadership 1970s Characteristics of the organization, task, and subordinates may substitute for or negate the effects of leadership behaviors.


Three main theoretical frameworks have dominated leadership research at different points in time. These included the trait approach (1930s and 1940s), the behavioral approach (1940s and 1950s), and the contingency or situational approach (1960s and 1970s).


The scientific study of leadership began with a focus on the traits of effective leaders. The basic premise behind trait theory was that effective leaders are born, not made, thus the name sometimes applied to early versions of this idea, the "great man" theory. Many leadership studies based on this theoretical framework were conducted in the 1930s, 1940s, and 1950s.

Leader trait research examined the physical, mental, and social characteristics of individuals. In general, these studies simply looked for significant associations between individual traits and measures of leadership effectiveness. Physical traits such as height, mental traits such as intelligence, and social traits such as personality attributes were all subjects of empirical research.

The initial conclusion from studies of leader traits was that there were no universal traits that consistently separated effective leaders from other individuals. In an important review of the leadership literature published in 1948, Ralph Stogdill concluded that the existing research had not demonstrated the utility of the trait approach.

Several problems with early trait research might explain the perceived lack of significant findings. First, measurement theory at the time was not highly sophisticated. Little was known about the psychometric properties of the measures used to operationalize traits. As a result, different studies were likely to use different measures to assess the same construct, which made it very difficult to replicate findings. In addition, many of the trait studies relied on samples of teenagers or lower-level managers.

Early trait research was largely atheoretical, offering no explanations for the proposed relationship between individual characteristics and leadership.

Finally, early trait research did not consider the impact of situational variables that might moderate the relationship between leader traits and measures of leader effectiveness. As a result of the lack of consistent findings linking individual traits to leadership effectiveness, empirical studies of leader traits were largely abandoned in the 1950s.


Partially as a result of the disenchantment with the trait approach to leadership that occurred by the beginning of the 1950s, the focus of leadership research shifted away from leader traits to leader behaviors. The premise of this stream of research was that the behaviors exhibited by leaders are more important than their physical, mental, or emotional traits. The two most famous behavioral leadership studies took place at Ohio State University and the University of Michigan in the late 1940s and 1950s. These studies sparked hundreds of other leadership studies and are still widely cited.

The Ohio State studies utilized the Leader Behavior Description Questionnaire (LBDQ), administering it to samples of individuals in the military, manufacturing companies, college administrators, and student leaders. Answers to the questionnaire were factor-analyzed to determine if common leader behaviors emerged across samples. The conclusion was that there were two distinct aspects of leadership that describe how leaders carry out their role.

Two factors, termed consideration and initiating structure, consistently appeared. Initiating structure, sometimes called task-oriented behavior, involves planning, organizing, and coordinating the work of subordinates. Consideration involves showing concern for subordinates, being supportive, recognizing subordinates' accomplishments, and providing for subordinates' welfare.

The Michigan leadership studies took place at about the same time as those at Ohio State. Under the general direction of Rensis Likert, the focus of the Michigan studies was to determine the principles and methods of leadership that led to productivity and job satisfaction. The studies resulted in two general leadership behaviors or orientations: an employee orientation and a production orientation. Leaders with an employee orientation showed genuine concern for interpersonal relations. Those with a production orientation focused on the task or technical aspects of the job.

The conclusion of the Michigan studies was that an employee orientation and general instead of close supervision yielded better results. Likert eventually developed four "systems" of management based on these studies; he advocated System 4 (the participative-group system, which was the most participatory set of leader behaviors) as resulting in the most positive outcomes.

One concept based largely on the behavioral approach to leadership effectiveness was the Managerial (or Leadership) Grid, developed by Robert Blake and Jane Mouton. The grid combines "concern for production" with "concern for people" and presents five alternative behavioral styles of leadership. An individual who emphasized neither production was practicing "impoverished management" according to the grid. If a person emphasized concern for people and placed little emphasis on production, he was terms a "country-club" manager.

Conversely, a person who emphasized a concern for production but paid little attention to the concerns of subordinates was a "task" manager. A person who tried to balance concern for production and concern for people was termed a "middle-of-the-road" manager.

Finally, an individual who was able to simultaneously exhibit a high concern for production and a high concern for people was practicing "team management." According to the prescriptions of the grid, team management was the best leadership approach. The Managerial Grid became a major consulting tool and was the basis for a considerable amount of leadership training in the corporate world.

The assumption of the leader behavior approach was that there were certain behaviors that would be universally effective for leaders. Unfortunately, empirical research has not demonstrated consistent relationships between task-oriented or person-oriented leader behaviors and leader effectiveness. Like trait research, leader behavior research did not consider situational influences that might moderate the relationship between leader behaviors and leader effectiveness.


Contingency or situational theories of leadership propose that the organizational or work group context affects the extent to which given leader traits and behaviors will be effective. Contingency theories gained prominence in the late 1960s and 1970s. Four of the more well-known contingency theories are Fiedler's contingency theory, path-goal theory, the Vroom-Yetton-Jago decision-making model of leadership, and the situational leadership theory. Each of these approaches to leadership is briefly described in the paragraphs that follow.

Introduced in 1967, Fiedler's contingency theory was the first to specify how situational factors interact with leader traits and behavior to influence leadership effectiveness. The theory suggests that the "favorability" of the situation determines the effectiveness of task- and person-oriented leader behavior.

Favorability is determined by (1) the respect and trust that followers have for the leader; (2) the extent to which subordinates' responsibilities can be structured and performance measured; and (3) the control the leader has over subordinates' rewards. The situation is most favorable when followers respect and trust the leader, the task is highly structured, and the leader has control over rewards and punishments.

Fiedler's research indicated that task-oriented leaders were more effective when the situation was either highly favorable or highly unfavorable, but that person-oriented leaders were more effective in the moderately favorable or unfavorable situations. The theory did not necessarily propose that leaders could adapt their leadership styles to different situations, but that leaders with different leadership styles would be more effective when placed in situations that matched their preferred style.

Fiedler's contingency theory has been criticized on both conceptual and methodological grounds. However, empirical research has supported many of the specific propositions of the theory, and it remains an important contribution to the understanding of leadership effectiveness.

Path-goal theory was first presented in a 1971 Administrative Science Quarterly article by Robert House. Path-goal theory proposes that subordinates' characteristics and characteristics of the work environment determine which leader behaviors will be more effective. Key characteristics of subordinates identified by the theory are locus of control, work experience, ability, and the need for affiliation. Important environmental characteristics named by the theory are the nature of the task, the formal authority system, and the nature of the work group. The theory includes four different leader behaviors, which include directive leadership, supportive leadership, participative leadership, and achievement-oriented leadership.

According to the theory, leader behavior should reduce barriers to subordinates' goal attainment, strengthen subordinates' expectancies that improved performance will lead to valued rewards, and provide coaching to make the path to payoffs easier for subordinates. Path-goal theory suggests that the leader behavior that will accomplish these tasks depends upon the subordinate and environmental contingency factors.

Path-goal theory has been criticized because it does not consider interactions among the contingency factors and also because of the complexity of its underlying theoretical model, expectancy theory. Empirical research has provided some support for the theory's propositions, primarily as they relate to directive and supportive leader behaviors.

The Vroom-Yetton-Jago decision-making model was introduced by Victor Vroom and Phillip Yetton in 1973 and revised by Vroom and Jago in 1988. The theory focuses primarily on the degree of subordinate participation that is appropriate in different situations. Thus, it emphasizes the decision-making style of the leader.

There are five types of leader decision-making styles, which are labeled AI, AII, CI, CII, and G. These styles range from strongly autocratic (AI), to strongly democratic (G). According to the theory, the appropriate style is determined by answers to up to eight diagnostic questions, which relate to such contingency factors as the importance of decision quality, the structure of the problem, whether subordinates have enough information to make a quality decision, and the importance of subordinate commitment to the decision.

The Vroom-Yetton-Jago model has been criticized for its complexity, for its assumption that the decision makers' goals are consistent with organizational goals, and for ignoring the skills needed to arrive at group decisions to difficult problems. Empirical research has supported some of the prescriptions of the theory.

The situational leadership theory was initially introduced in 1969 and revised in 1977 by Hersey and Blanchard. The theory suggests that the key contingency factor affecting leaders' choice of leadership style is the task-related maturity of the subordinates. Subordinate maturity is defined in terms of the ability of subordinates to accept responsibility for their own task-related behavior. The theory classifies leader behaviors into the two broad classes of task-oriented and relationship-oriented behaviors. The major proposition of situational leadership theory is that the effectiveness of task and relationship-oriented leadership depends upon the maturity of a leader's subordinates.

Situational leadership theory has been criticized on both theoretical and methodological grounds. However, it remains one of the better-known contingency theories of leadership and offers important insights into the interaction between subordinate ability and leadership style.


Although trait, behavioral, and contingency approaches have each contributed to the understanding of leadership, none of the approaches have provided a completely satisfactory explanation of leadership and leadership effectiveness. Since the 1970s, several alternative theoretical frameworks for the study of leadership have been advanced. Among the more important of these are leader-member exchange theory, transformational leadership theory, the substitutes for leadership approach, and the philosophy of servant leadership.


Leader-member exchange (LMX) theory was initially called the vertical dyad linkage theory. The theory was introduced by George Graen and various colleagues in the 1970s and has been revised and refined in the years since. LMX theory emphasizes the dyadic (i.e., one-on-one) relationships between leaders and individual subordinates, instead of the traits or behaviors of leaders or situational characteristics.

The theory's focus is determining the type of leader-subordinate relationships that promote effective outcomes and the factors that determine whether leaders and subordinates will be able to develop high-quality relationships.

According to LMX theory, leaders do not treat all subordinates in the same manner, but establish close relationships with some (the in-group) while remaining aloof from others (the out-group). Those in the in-group enjoy relationships with the leader that is marked by trust and mutual respect. They tend to be involved in important activities and decisions. Conversely, those in the out-group are excluded from important activities and decisions.

LMX theory suggests that high-quality relationships between a leader-subordinate dyad will lead to positive outcomes such as better performance, lower turnover, job satisfaction, and organizational commitment. Empirical research supports many of the proposed relationships (Steers et al., 1996).


Beginning in the 1970s, a number of leadership theories emerged that focused on the importance of a leader's charisma to leadership effectiveness. Included within this class of theories are House's theory of charismatic leadership, Bass's transformational leadership theory, and Conger and Kanungo's charismatic leadership theory.

These theories have much in common. They all focus on attempting to explain how leaders can accomplish extraordinary things against the odds, such as turning around a failing company, founding a successful company, or achieving great military success against incredible odds. The theories also emphasize the importance of leaders' inspiring subordinates' admiration, dedication, and unquestioned loyalty through articulating a clear and compelling vision.

Tranformational leadership theory differentiates between the transactional and the transformational leader. Transactional leadership focuses on role and task requirements and utilizes rewards contingent on performance. By contrast, transformational leadership focuses on developing mutual trust, fostering the leadership abilities of others, and setting goals that go beyond the short-term needs of the work group.

Bass's transformational leadership theory identifies four aspects of effective leadership, which include charisma, inspiration, intellectual stimulation, and consideration. A leader who exhibits these qualities will inspire subordinates to be high achievers and put the long-term interest of the organization ahead of their own short-term interest, according to the theory. Empirical research has supported many of the theory's propositions.


Kerr and Jermier introduced the substitutes for leadership theory in 1978. The theory's focus is concerned with providing an explanation for the lack of stronger empirical support for a relationship between leader traits or leader behaviors and subordinates' satisfaction and performance. The substitutes for leadership theory suggests that characteristics of the organization, the task, and subordinates may substitute for or negate the effects of leadership, thus weakening observed relationships between leader behaviors and important organizational outcomes.

Substitutes for leadership make leader behaviors such as task-oriented or relationship-oriented unnecessary. Characteristics of the organization that may substitute for leadership include formalization, group cohesiveness, inflexible rules, and organizational rewards not under the control of the leader. Characteristics of the task that may substitute for leadership include routine and repetitive tasks or tasks that are satisfying. Characteristics of subordinates that may substitute for leadership include ability, experience, training, and job-related knowledge.

The substitutes for leadership theory has generated a considerable amount of interest because it offers an intuitively appealing explanation for why leader behavior impacts subordinates in some situations but not in others. However, some of its theoretical propositions have not been adequately tested. The theory continues to generate empirical research.


This approach to leadership reflects a philosophy that leaders should be servants first. It suggests that leaders must place the needs of subordinates, customers, and the community ahead of their own interests in order to be effective. Characteristics of servant leaders include empathy, stewardship, and commitment to the personal, professional, and spiritual growth of their subordinates. Servant leadership has not been subjected to extensive empirical testing but has generated considerable interest among both leadership scholars and practitioners.

Leadership continues to be one of the most written about topics in the social sciences. Although much has been learned about leadership since the 1930s, many avenues of research still remain to be explored as we enter the twenty-first century.


Bass, Bernard M., Bruce J. Avolio, Dong I. Jung, and Yair Berso. "Predicting Unit Performance by Assessing Transformational and Transactional Leadership." Journal of Applied Psychology 88 (2003): 207–218.

Blank, Warren, John R. Weitzel, and Stephen G. Green. "A Test of the Situational Leadership Theory." Personnel Psychology 43 (1990): 579–597.

Fiedler, Fred E. A Theory of Leadership Effectiveness. New York, NY: McGraw-Hill, 1967.

Graeff, Claude L. "The Situational Leadership Theory: A Critical View." Academy of Management Review 8 (1983): 285–291.

Graen, George, and William Schiemann. "Leader-Member Agreement: A Vertical Dyad Linkage Approach." Journal of Applied Psychology 63 (1978): 206–212.

Greenberg, Jerald, and Robert A. Baron. Behavior in Organizations: Understanding and Managing the Human Side of Work. Upper Saddle River, NJ: Prentice-Hall, 2000.

House, Robert J. "A Path-Goal Theory of Leader Effectiveness." Administrative Science Quarterly 16 (1971): 321–339.

House, Robert J., and Ram N. Aditya. "The Social Scientific Study of Leadership: Quo Vadis?" Journal of Management 23 (1997): 409–473.

Kirkpatrick, Shelley A., and Edwin A. Locke. "Leadership: Do Traits Matter?" Academy of Management Executive 5 (1991): 48–60.

Kinicki, Angelo, and Robert Kreitner. Organizational Behavior. Boston, MA: McGraw-Hill Irwin, 2006.

Luthans, Fred. Organizational Behavior. Boston, MA: McGraw-Hill Irwin, 2005.

Podsakoff, Philip M., et al. "Do Substitutes for Leadership Really Substitute for Leadership? An Empirical Examination of Kerr and Jermier's Situational Leadership Model." Organizational Behavior and Human Decision Processes 54 (1993): 1–44.

Steers, Richard M., Lyman W. Porter, and Gregory A. Bigley. Motivation and Leadership at Work. New York: McGraw-Hill, 1996.

Stogdill, Ralph M. "Personal Factors Associated with Leadership: A Survey of the Literature." Journal of Psychology 25 (1948): 335–71.

Stogdill, Ralph M., and Bernard M. Bass. Handbook of Leadership: A Survey of Theory and Research. New York, NY: Free Press, 1974.

Vroom, Victor H., and Phillip W. Yetton. Leadership and Decision Making. Pittsburgh, PA: University of Pittsburgh Press, 1973.

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Leadership Styles and Bases of Power Lean Manufacturing and Just-in-Time Production

Observation of Leadership & Organizational Behavior at McDonald's

  • Eric Goldman
  • Tiago Santos
  • Sara Tully

This article is also available in the following languages:
9 Nov 2008   ::   Non-Technical   ::   #Leadership#Organizational Behavior#McDonalds



McDonald’s is comprised of more than 30,000 local restaurants and serves 52 million people in more than 100 countries each day1 The company is the largest food retailer in the world and is part of the American way of life. In order to remain competitive and an iconic American institution, McDonald’s has developed programs and strategies for motivating employees and teaching leadership. As a result, our group believes that McDonald’s presented an excellent opportunity to observe organizational behavior in action.

In this observational study, we sought to discover what leadership techniques and group skills were actually practiced by McDonald’s employees Our field study entailed visiting four different McDonald’s stores in the greater Rochester area during distinct shifts ranging from early morning to late night. During each visit, a group member made a purchase and sat at a table where one could observe the behavior of managers and employees and customer interactions, without interfering with normal operations. Due to the fact we were restricted to a small sample of McDonald’s restaurants, we could not capture the complete spirit of the corporation. However, we were able to relate our findings to leadership and organizational behavior theories and some of McDonald’s corporate values. Through a series of observations and corporate research we discovered that McDonald’s employees demonstrate quality leadership and that the organization as a whole puts significant effort into motivating and working for its employees.

Corporate & Work Culture

When analyzing an organizations leadership and teamwork skills, it is useful to first analyze the organization.s work culture and how this culture is maintained. The work culture of McDonald’s seems highly dependent upon the particular line manager in charge at any given point in time. One would imagine that the manager would almost always use position power and would use a telling style of leadership since the typical employee is young or inexperienced. Indeed, some managers were observed as running the operations in a machine like manner, especially during peak business periods. However, in the majority of cases the managers were relatively relaxed and sometimes were indistinguishable from the other employees. One manager in particular used a selling approach, which indicates a higher readiness level of her team (Daft, 2008, p. 73). She did not simply give orders, but accepted feedback and alternatives to her decisions. While it was obvious she was the manager, her team was obviously in the later stages of development and was comfortable outside of their predefined roles.

In general, the managers did not try to put any strong vertical barriers between themselves and their employees Managers usually seemed to display real concern and interest in the emotions and well being of their employees, which was not expected in this environment. For example, one manager was observed asking an employee cleaning the floors about her weekend and her kids. There seems to be legitimate efforts in order to motivate employees even at the line worker level. Herzberg’s two-factor theory explains that good working conditions only go so far, and that employees require higher level fulfillment such as motivation and recognition in order to be satisfied with their position (Daft, 2008, p. 231). Even in a low- skill position, low turnover is desired. In addition, happy employees lead to happy customers.

McDonald’s corporate management believes in training and leadership at all levels through Hamburger University On Hamburger University’s website2, they quote McDonald’s founder Ray Kroc’s training focused ideology: “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent”. This ideology demonstrates that McDonald’s does not believe its restaurants’ crew members are just gears in a machine that can be easily replaced. Because training is not just offered to executives or managers, McDonald’s is able to spread and reinforce its culture and values in all directions, not just downward. McDonald’s corporate values also have “people” as one of its pillars (McDonald’s Corporation, 2008). Corporate policy says that employees should be paid at or above the local market rate, and should also value both their pay and their benefits. By addressing employees higher needs by providing training they make employees feel important and valuable. Training also serves to reinforce the culture at all levels through education and fostering a positive image of the employees’ importance to the company.

McDonald’s Motivating Factors

Of the McDonald’s restaurants we observed, the culture was generally inviting for new employees In addition, other factors make McDonald’s an ideal employer for many individuals. A primary motivation for working in a McDonald’s restaurant is that it presents a laid back environment and the job itself is not very stressful. Even during the observed lunch and dinner rushes, the employees never appeared particularly stressed or anxious. When there was a lull in the restaurant the employees would clean their stations, chat with other employees, or get a drink from the soda fountain. They were very relaxed and for the most part did not seem to fear their managers or other bosses. As Daft explains, fear can weaken trust and communication, and is usually impedes employees rather than motivates them (Daft, 2008, p. 152). For a high school student who is busy with school work and other extra-curricular activities, it may be ideal to work in a laid back environment like McDonald’s. A student’s life may be highly stressful, and a low-skill, low-stress job offered by McDonald’s may provide a break from an otherwise stressful life. Also, for the elderly employees, the low stress environment may also be desirable because they would not be overwhelmed with responsibilities that might be new to them.

Another possible motivator is the social opportunity presented by such a job As noted above, employees tended to have a very casual environment where they could talk and socialize while they worked. For example, many of the employees who work during the evening shifts are high school students. These employees are often the same age and often share common cultural interests. They are also presented with the opportunity to meet new people and develop friendships that can continue to develop outside of work. They will also have a bond with these employees because they share a common experience, and are likely from a similar background. Employment at McDonald’s also offers social opportunities for those employees who are young but do not attend college and for the elderly. Many of these employees do not have the opportunity to participate in clubs or other organizations, and interact with people of their own age or anyone in general. It may even be possible to develop a romantic relationship with another employee, as McDonald’s is not a work environment where this could be seen as a problem by management.

A third reason for working at McDonald’s is the flexible schedule McDonald’s offers many different shift schedules so they accommodate everyone. This can help employees find a healthy work-life balance. Some individuals require fulltime work, which is available through the standard day shift, while part time workers can pick up their hours after school ends, on weekends or around other social obligations. Since the company requires in some levels a low skill job, another employee can easily take one’s shift over, allowing the later to take on other obligations and not be completely tied to the workplace. Part time employees can rotate their hours according to who has requested to have a certain day off. This gives employees a sense of empowerment because they have same say in their schedule and are less likely to call in sick to avoid work, which would lower team morale and the respect between the managers and the employee (Daft, 2008, p. 242). Even though the average employee is unskilled or does not require skills, empowering an employee helps him feel important and makes him feel better about his job. In addition to the flexibility offered by a position at McDonald’s, the convenient location might serve as another motivator. There is a McDonald’s store in most every town, and it may be relatively close to an employee and the only available job which does not require a skill or advanced training. As a result, employees who do not have cars can walk to work or take public transportation. In light of the recent economic downturn and the high price of gas, having a job in your own neighborhood is a huge benefit, especially for a young person or a person trying to earn their first paycheck.

Finally, an additional motivator is the numerous growth opportunities available McDonald’s offers training to employees at various levels. In addition, if any employee stays at McDonald’s for a long period he could advance into an assistant manager or manager position. While typically a McDonald’s job is seen as temporary for young people, it may be the only job available for an impoverished person, recent immigrant, or someone with no learned skill. Since there is a high rate of turnover, employees have the chance to advance within a few years of working at a restaurant. This opportunity could be very appealing for those who cannot attend college for some reason. If during his high school years an employee was a hard worker, he or she could easily move into a manager position and continue his career with the company or gain experience to move into another job without a formal education.

Through our observations we were unable to determine the exact theories of motivation mangers used, but it was clear that the theories were of a needs-based nature In general, the average employee does not commit to McDonald’s for a long term, and high turnover is expected. Thus, for the majority of the employees the goal is to satisfy their lower needs. Using Maslow’s hierarchy, the main goal is to provide the basic needs such as a safe environment where they can earn the money they needed to provide for their physiological needs (Daft, 2008, p. 228). However, there are typically no real fringe benefits (besides free food) associated with the job, and there is no contract or other guarantee of continued employment. In some cases though, there was observed belongingness through friendships and team unity. In addition, the two-factor theory of motivation seems to be employed (Daft, 2008, p. 231). McDonald’s seeks to reduce dissatisfaction by having good hygiene factors - adequate pay and organizational policies. In many cases, there does not appear to be a high focus on implementing motivators; employees did not seem unhappy, but there seem to be very few opportunities for recognition and growth except for those who plan to be long term employees.

The Best Employee

In continuation to what was observed in the visited McDonald’s stores, one cannot neglect to address the leadership style displayed by the line managers in these restaurants Conforming to the informal and relaxed atmosphere emphasized by the manager.s calm attitude and the McDonald’s “100% customer satisfaction” goal; one could expect a “middle-of-the-road” type of management in which the leaders behave as compromisers (Northouse, 2007, p. 75), exhibiting both people and task oriented behavior. Indeed, during this field study the line managers seemed to be very expedient, approaching a station whenever there was a problem and giving directions to the subordinates. The managers appeared to be moderately concerned with the people who did the tasks, yet they were focused on production and ultimately product quality. There were no noticeable conflicts between leaders and followers and an equilibrium state was achieved between them.

The line managers’ leadership behavior reflects a task-oriented style for the crew members The commitment and positive attitude towards a given task are derived from the employees’ motivations and leader behavior According to the Path-Goal Theory, for tasks which are characterized as repetitive, unchallenging, mundane and mechanical, the group members tend to be unsatisfied and in need of affiliation and human touch (Northouse, 2007, p. 134). Therefore, the most suitable leader behavior for this type of environment is the supportive leadership that provides nurturance and makes the work pleasant for subordinates.

McDonald’s Corporate believes its success is attributed in part to the talented restaurant crew Also, Corporate claims to be engaged in talent management: attracting, developing and retaining talented people from all levels3. The leader behavior observed in the McDonald’s stores corresponds to the employment experience values promoted on their website. From the field study experience, one can surmise the McDonald’s leader-follower relationship as the following: “The task is simple. We provide all necessary tools for you to accomplish your job. Show commitment and perform your duties properly. I am here to help if necessary. I will not trouble you”. For the McDonald’s case, a comfortable and friendly environment reinforced by the line manager is paramount for the employee’s satisfaction.

Good customer service is one the most important aspects in the fast food industry It is crucial for the employees in this sector to display courtesy, genuine concern and diligent service towards the clients. Unsurprisingly, this trend was commonly found in the visited McDonald’s stores. Most of the cashiers there would greet the customer with a smile and a “how are you today, sir”, followed by a “thank you” once the transaction was done. Behind the scenes, the workers cooking fries and flipping burgers made sure their products were been delivered in a steady pace and in accordance to the company’s quality standards. Finally, the line manager’s role was to make sure things were running smoothly, fill gaps whenever necessary, assist crew members and perform other managerial duties such as inventory control, managing budget and human resources.

As in any assembly line, the employees performance is heavily measured by his or her efficiency level. It amounts to how many items the worker delivered in a given period, following a certain quality standard. Of course, there are others important points to be considered in order to determine who are the best employees. Initiative could be a means of distinguishing the workers in this sort of environment. This could be exhibited by a cashier who cleans the counter if idle, a cook who starts cleaning the kitchen earlier, or even a manager who presents to the company a new product or service concept. Also, cooperation plays a big role, because McDonald’s relies on groups and teams. Each employee relies on another line worker in the assembling process. In the end, any worker who demonstrates these qualities could have his/her picture hung on the wall as the “employee of the month”. this is a classic example of how McDonald’s stores motivate and reward their employees.

The best McDonald’s manager/leader is the one that promotes a pleasant atmosphere for his/her subordinates to counter the limited jobs motivating factors. However, the manager should also focus on maximizing production and delivering a good service to the customers. The ideal McDonald’s leader must apply a coaching leadership style, showing both high directive and supportive behaviors. From what was observed in some stores, the managers of the restaurants seemed to be in control of every aspect of the entire food service process. At some instances when things went completely out of control; the same managers exhibited a coaching style of leadership, directing the subordinate on how to achieve a specific goal. Whenever they overheard or saw someone doing something wrong or partially correct, they would step in giving directions to their subordinates and would never disrespect them.

Team Work at McDonald’s

While not all employees can be superstars, McDonald’s owes is success to its team functionality rather than the efforts of one individual McDonald’s does not have very highly integrated teamwork, but they would be unable to deliver their products and service without sufficient team unity and cooperation. The team on the floor of a McDonald’s restaurant is best described as a functional team (Daft, 2008, p. 297). Team members have one area that they focus on during their shift. If they leave their post or are not productive, other line members will not be able to accomplish their jobs and the production line will suffer. For example, when a customer enters the restaurant places an order with the cashier, the later inputs the order into the computer and the information is displayed in the kitchen at the sandwich and grill stations. The grill worker prepares the meat and then places the burger on a bun. The sandwich maker then assembles the sandwich according to the type of sandwich and any additional customer requests. If the sandwich maker leaves his post, another worker has to cover for him or the entire product delivery process shuts down. As a result, a McDonald’s restaurant team is sequentially interdependent (Daft, 2008, p. 301). Without everyone working together and having sufficient motivation to provide good and quick quality service, all members of the team fail. As a result of one person losing motivation or failing to adequately perform his duties, customers may complain and business can be lost. Even though most employees are trained to perform multiple tasks at various stations, they are not usually able to perform all of these tasks simultaneously.

The typical team was not self-reliant and required constant, direct input from the manager We observed that often times when morale began to wane, the manager was able to reinvigorate the team and increase efficiency. However, we also noticed that if the manager grew tired and lost motivation the rest of the team quickly followed suit. Managers were also instrumental in helping out struggling team members by motivating them. This attitude kept the production line moving adequately. The team effectiveness is directly related to the manager’s leadership efforts (Daft, 2008, p. 303). In order to ensure both efficiency and quality in the team’s work, the managers had to make some efforts to satisfying employees’ needs. This manifested as direct help, words of encouragement, not punishing undesired behavior every time, or awarding a break and taking over a worker’s responsibilities temporarily. Nevertheless, employee seemed well trained and autonomous as long as morale was at a sufficient level. The team operated mostly without speaking. Sometimes team members would yell an order to another member, but generally everyone knew what they had to do without much discussion. Because the team did not need constant retraining or correction, it is a sign that the employees are well trained and have been given the tools to adequately perform their roles.

The Overall Leader & Corporate Values Reflected

While McDonald’s is a large multinational organization, the CEO is often seen as a leader and symbolic driver of the corporate initiatives and ideals McDonald’s current Chief Executive Office is Jim Skinner. Mr. Skinner has been with McDonald’s for over thirty-five years, and has held many positions from “restaurant manager trainee” to many corporate positions throughout his tenure, before being elected as CEO (McDonald’s Corporation, 2008). Truly a charismatic and transformational leader, many attribute McDonald’s turn-around in the past few years to the efforts of Skinner; not only did he revitalize the organization, but he “reinvented the fast food business” with a new vision and direction (Hume, 2007). Early in the turn-around, he was one of the architects of the “Plan to Win” initiative which renewed McDonald’s core focus of store operations. His election to the CEO post provided some stability and faith for the organization. Hume notes that one of the key elements to his success was his vast experience with overseas markets that gave him great diversity exposure which was crucial for the global corporation. This diversity has definitely helped giving McDonald’s a competitive advantage, and was paramount in the global communication between employees and customers (Daft, 2008, p. 334). One of his noted achievements during his tenure in regards to leadership was fighting the “McJob” stigma; he made employees feel important and began to promote the various positions in a brighter light through advertising campaigns (Hume, 2007).

In terms of Mr Skinner’s philosophy, he is primarily focused on customer satisfaction. He believes that is necessary to first meet customer expectations and then focus on the restaurants themselves. The philosophy also includes keeping things simple and manageable for each store while making sure that “everyone is aligned around that one idea”. The idea is directed towards making a good appearance, caring about how the restaurant looks and how you present yourself. Another important aspect of his philosophy is the fear of complacency. Therefore, he encourages creativity, but also wants to make sure that people do not lose track of the chain’s primary objectives (Hume, 2007). Thus, there is a strong focus on coming up with good, creative strategies, and then putting the full effort into successful execution. For Mr. Skinner, a companywide initiative is always a must, and never a maybe. Skinner is also a man of values and ethics: When McDonald’s was blamed for the obesity problem, he helped direct the company to take responsibility and help create a solution rather than pass the blame. Thus, Skinner can be seen as a moral leader and symbol of doing the right thing for McDonald’s (Daft, 2008, p. 169). Finally, one of Skinner.s continuing main goals is “talent management and leadership development” (Hume, 2007). This involves critical tasks such as reorganizing individuals into different roles and identifying potential leaders to be awarded additional responsibility.

While many of the Mr Skinners values are not easily discernable on surface, his leadership was seen at the restaurants observed. The care regarding customer satisfaction was most obvious, employees were always polite and the restaurant was very clean. During some observations, employees were seen talking with regular customers beyond the normal service interactions, demonstrating some level of intimacy between them. In addition, almost all employees seemed well mannered and presented themselves well. There seemed to be a high level of morale, even with the more menial and custodial positions, which was unexpected in a fast food restaurant. In many of the locations visited, there were employee recruitment signs on the door that listed benefits; however, the application process was online. While more efficient, perhaps a stronger focus on in-person recruitment would help improving morale and result in more applications.

Improving Employee Effectiveness

One may initially believe that there is not really much that can or even needs to be done in order to improve efficiency in McDonald’s restaurants; however, good leadership involves constantly reinforcing a brighter vision of the future and increasing value for both customers and employees An employee should not think that just because they cook fries or flip burgers, that they cannot make a difference. Rather, by encouraging creativity and leadership even at this lowest level, the next great executive may emerge. It is important to turn each restaurant’s employee into a productive team member. In order to increase productivity and employee commitment, we propose several measures. The first measure would be to create a program to encourage creativity among restaurant managers, owners, and operators. In fact, the iconic Ronald McDonald was not developed by Ray Kroc or anyone at corporate, but by the owner of a local franchise (Walker & Scott). Rewards should be available for coming up with new ideas at the restaurant level. As owners and managers are the ones who are actively involved with the day-to-day operations, they have a greater vantage point for implementing successful changes. In order for such a program to be successful, there must first be some educational programs like workshops. At the regional level, managers and owners can be brought together and taught about creative ideas. This will encourage thinking “outside of the box”, and furthermore can introduce individuals to the practice of “creative swiping”, which is a process of copying the best ideas whether they be from within your industry or from completely unrelated fields (Peters, 1987). After properly motivating the owners and managers, there should be a trickledown effect to the restaurant’s employees.

In addition to the trickledown effect of targeting the managers, we would take steps to directly motivate individual employees as well On this front, one of the first steps is to truly understand each and every employee. Some employees may only be working at McDonald’s temporarily, but for others this may be the only available job opportunity. For such individuals, they want to maximize their job satisfaction. We would implement a program similar to those in large corporations where employees are able to set specific goals and explain their rationale for working at McDonald’s and what they expect from their employment. This process would show employees that they can do more than flip burgers, for example develop leadership and management skills which can be invaluable regardless of future career plans. Managers and/or owners would apply Vroom’s Expectancy Theory in this case; the attention and treatment of each employee should be personalized (Daft, 2008, p. 235). Managers would therefore develop a plan with each employee to increase his intrinsic satisfaction, while at the same time increasing that employee’s productivity.

Building on our focus on individuals, we would also implement a scholarship and education program We want our employees to represent us well within our restaurants and throughout the world. We would offer high school and college aged employees a greater number of college scholarship opportunities in return for quality work and demonstration of leadership potential. Younger workers are often harder to motivate directly, but the opportunity to have someone else paying for your education is always a great motivator. The program would reward quality work such as customer service and punctuality, as well as creativity and the ability to dream like a leader. Employees must be sponsored by a manager or owner and would have to write an essay answering a question that instigates them to think creatively about how we as a corporation could improve. This would motivate even the youngest and most inexperienced ones. In fact, this could create an upstream effect on the whole restaurant or corporation, increase team cohesiveness and help encouraging those who are older or in higher positions to also think about making the entire organization better (Daft, 2008, p. 239). The winners would make a positive impact on the organization and earn the extrinsic reward of a scholarship. In subsequent years, this would encourage other young employees to also pursue this opportunity, be a first-class worker and think creatively about the organization.


McDonald’s is a multinational corporation, which is perceived as many different things to different people Some people see McDonald’s as a decent, fast and inexpensive meal. Others may view the company chain as a low quality restaurant that employs uneducated and unskilled people. Nevertheless, McDonald’s has a cheery corporate image that prides itself on quality and cleanliness, as well as good food and good service. The company employs state-of-art technology to help its workers in their tasks and makes the production process faster, attending to the customers in a prompt manner. In terms of leadership, McDonald’s makes a strong corporate effort to develop leaders. There are growth opportunities within the corporation for those who are willing to work hard and develop their leadership skills. There is a great upward mobility for Macdonald’s employees. From what we observed in our field study, the work culture displayed in the McDonald’s stores is aligned with the firm’s corporate values.


Daft, R L. (2008). The Leadership Experience. Mason, OH: Thomson South-Western.

Hume, S (2007, December 1). McDonald’s CEO Jim Skinner - R&I’s 2007 Executive of the Year. Retrieved November 1, 2008, from Restaurants & Institutions: http://www.rimag.com/article/CA6553963.html [ http://web.archive.org/web/20090809181628/http://www.rimag.com/article/CA6553963.html ]

McDonald’s Corporation (2008). Corporate. Retrieved October 21, 2008, from McDonalds.com: http://www.mcdonalds.com/corp.html

Northouse, P (2007). Leadership: Theory and Practice. Thousdand Oaks, CA: Sage Publications, Inc.

Peters, T J. (1987). Thriving on Chaos: Handbook for a Management Revolution. New York: Knopf/Random House.

Walker, E, & Scott, W. (n.d.). Willard Scott as Ronald McDonald. Retrieved October 2008, 2008, from The Joy Boys : http://www.thejoyboys.com/ronald.htm

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