PART A:ENTREPRENEURSHIP, CONFLICT MANAGEMENT AND ETHICS1.
Ray Kroc is a salesman who istrying to sell multi-mixers in order to make some money. He is unsuccessful atthe beginning of the film, but then receives an order for six of his milkshakemixers, from McDonald’s owners Mack and Dick McDonald. Ray then decides todrive up to their restaurant, and discovers great potential there. He is eagerto work with the two owners, and comes to know their secret to success – the’speedy system’.
It is through this that Ray is inspired by the idea and seizesthe opportunity to cause the business to thrive. Mack and Dick, however, aren’tso keen to work with Ray after learning of his risky ways of doing business, asthe two would much rather stick with their current methods of operatingMcDonald’s. Ray is strongly opposed to this idea, and begins to franchise thebusiness and find people who would be able to run the stores in differentstates. Ray divorces his wife due to his obsession with business success, andmanages to pull the company completely from the original owners, leaving himwith one of the most successful businesses in the world.2.
1. The entrepreneurialsuccesses of Ray Kroc began with his persistence in the beginning. It’s becauseof this that he was finally able to break through with his mixers, hencediscovering McDonald’s as a new opportunity in the process. The McDonaldbrothers, however, gave up very easily on franchising their business aftertheir first endeavour at franchising failed.Ray Kroc was able to identify theright people for the new stores thathe opened up, and he made the most out of people once he saw that they couldadd value to his advancement in McDonald’s. He firstly chose wealthy people tobe franchise owners, but then realised that they tended to do things their ownway, and so went on to choosing middle-class people who had the motivation towork and were inspired by the business’ concept. The McDonald brothers, on theother hand, seemed adamant to run their business on their own, and since thefailure of their attempt at franchising McDonald’s, shrunk their visions forthe business drastically and so were only able to have small successes.Ray Kroc was also very open,flexible and adaptable to other products or services that would save McDonald’smoney, maintain or enhance the quality of their products, and furthermore makethe workload easier for his employees.
He demonstrated this when he took on theidea of powdered milkshakes, which were much simpler to make, tasted the same,and cost McDonald’s less money. However, the McDonald brothers chose to staytrue to their traditional milkshakes, as they believed that that was what wouldmake the business more unique and assist to maintain customer loyalty.Ray Kroc’s main objective was toincrease the profits of McDonald’s, just as with any other business. However,the way he achieved this was very clever, in the sense that he consistentlysought out ways on how he could advance the business with minimal effort. TheMcDonald brothers were more concerned with keeping their brand name andpreserving the quality of their food. It’s because the two parties never hadthe same mindset in terms of furthering McDonald’s, which resulted in Ray Kroctaking over the business and causing the brothers to lose out. This would beseen as Kroc’s success and the brothers’ shortfall.The drastic furthering ofMcDonald’s through the use of Ray Kroc’s methods, was definitely a risk forhim.
It did, however, pay off very well, because of the way that he invested inas many restaurants as possible despite his lack of money, in the hopes thatsomething would turn out in the favour of McDonald’s. The McDonald’s brothers,however, were too focused on running one business, and because of Kroc takingrisks that turned out favourably, e.g. creating Franchise Realty Corporation,their partnership came to an end.2.
2. ProfessionalismThe McDonald’s brothers weren’tprofessional in the sense that they spoke a lot about and relating to contractsthat involved Ray Kroc, when Kroc disappointed them. They should’ve taken legalaction, but became too emotional for the difficult situation that they were in,and this worked out in Kroc’s favour as now they had minimal power over him.The scene where the brothers shook hands with Kroc over the 1% of royaltiesthat they were going to get, shows a great lack of unprofessionalism, as we arenow unable to justify whether or not there was a legitimate agreement made.EthicsRay Kroc was greatly unethical inthe way he handled and acted upon contracts made throughout the film. He wasobliged to stick to certain rules concerning McDonald’s, but took advantage ofthe McDonald brothers’ emotions and overruled the contracts made between bothparties. It was unethical for him to steal the McDonald’s name when statedotherwise in the contract.EffectiveBusiness Practices There was a great lack ofcommunication, especially communication at the right time between both parties.
Either one would call the other to discuss an issue, when the damage hadalready been done. For example, when Ray Kroc had already sent out the powderedmilkshakes to all the McDonald’s stores, the McDonald brothers weren’t informedabout this until it was too late.Also, in the beginning of themovie, the McDonald’s brothers used a great technique to train their employeesin the speedy system of making their food.
The tennis court method was a verygood effective business practice that motivated employees to work efficiently,effectively and quickly. 2.3.
Communication skillsBoth Ray Kroc and the McDonaldbrothers struggled to stay in communication with each other, especially whencommunication was needed at a certain time. In order to avoid future conflict,it is important that both parties learn to communicate as the first steptowards resolving conflicts. If this is done, both parties will know what isexpected of them as well as what needs to be done in future, allowing them tomake steady progress in McDonald’s.Innovativeproblem-solvingNeither Kroc nor the brothersdealt with issues between the parties very well.
If both parties couldintroduce new and inventive ways to solve certain concerns that may arise, theycan learn from these issues, move past them and make progress, as well as learnto use the methods that worked, in the future. It’s important to think outsidethe box when solving disputes between workers, and the creative solution oftenbegins with the willingness to hear each other out first.Hitconflict head-onMost of the conflict within thefilm was caused by delayed responses from both parties, as well as a delay insolving these problems, for example, when Kroc distributed the powderedmilkshakes without informing the McDonald brothers. The way this could havebeen sorted out is if Ray Kroc could have informed the brothers of his idea tosell powdered milkshakes, and then both parties could reason together on thecorrect and best solution so that neither party would experience an undesiredresult the hard way.Creatinga ‘Win-Win’ Outcome In most conflicts, if not all,both parties want their idea or proposal to be agreed with. With this in mind,it is important that Ray Kroc and the McDonald brothers learn to resolveconflict in such a way that it creates a win-win situation, be it that itrequires a lot of compromising and sacrifice from each side.
For example, theoutcome would’ve been different if Kroc had proposed the idea of the powderedmilkshakes to the brothers, and if the brothers agreed to experiment with it inone store, and discontinue with the product if it didn’t work or if customerscomplained.Viewconflict as opportunity Both parties in the movie becamerivalries more than anything, and it’s because of this that none of them wantedto hear the other out. Both Kroc and the McDonald brothers should begin seeingconflict as an opportunity for advancement within themselves, and henceMcDonald’s advancement in terms of profits.
If they started seeing conflictthis way, there would be less arguing and more reasoning and listening, as wellas being open to new ideas. Both parties in the end would need to celebrate thefinal decision, and see it as a stepping stone towards more success in McDonald’s. PARTB: LEADERSHIP AND TEAMWORK DemocraticLeadership Thistype of leadership assisted Ray Kroc in making McDonald’s a success, because heconstantly asked people who he thought would be good for the job, what theirthoughts were etc. This ensured buy-in from those who supported the concept ofMcDonald’s, and further increased the productivity of the business which led tosuccess.TransactionalLeadership TheMcDonald brothers at the beginning of the film, showed each employee whatneeded to be done very clearly, and they practiced how the running of thebusiness should take place until they got it right.
This form of leadershipmotivated their employees to want to work well in the business, because theywere able to see what part they were all playing in the success of McDonald’s.This led to an increase in production, and happy employees.TransformationalLeadershipBoththe McDonald brothers and Ray Kroc made a very clear emphasis on teamwork andthe need for family to be the centre of McDonald’s. This is mainly what stimulateda great build-up of confidence in employees, encouraging them to work betterfor the common goal. Emotion plays a big part in this type of leadership, andit led to a success for McDonald’s when Ray Kroc took the business under hiswing.Laissez-FaireTheworkers at McDonald’s had a high morale and were very much involved in theday-to-day tasks that kept the business going strongly. Kroc and the brotherswould constantly uplift their employees when checking the running of thebusiness, as well as alter mistakes the second they saw them.
They alsolistened well to those that worked with and under them, and considered most oftheir ideas. This led to success for McDonald’s because of the combination ofhaving everything clearly defined, and having motivated workers. Types ofManagement Styles Used in the Fast Food IndustryAutocraticIna restaurant setting, the owner can make all decisions on his/her own, withoutinput from anyone. This can be helpful in stressful incidents where a decisionneeds to be made quickly, as a discussion could potentially result in a loss ofa customer or worse.DemocraticThedemocratic management style can assist in building confidence in employeesworking at a restaurant. The owner can allow employees to decide how to handlecertain situations that may arise, such as an displeased customer. This buildsup confidence and integrity in employees, however, this management style canonly be effective in a good way if employees are able to discern what thecorrect solution would be to a problem.
ConsultativeThisis a combination of both the autocratic and democratic management styles, andtends to give both the owner and employees a certain level of satisfaction whenit comes to dealing with certain issues or managing things. A way in which thisstyle can be used is, for example, when the owner needs to make a decision onchanging something in the restaurant, and asks his/her employees what theythink but makes the final decision on his/her own.Comparison ofLeadership Styles in the Fast Food Industry to “The Founder”Theautocratic leadership style used in the food industry was barely used in ‘TheFounder’, as there weren’t many issues that people had with the food thatrequired an immediate decision for Ray Kroc or the McDonald brothers to make.Thedemocratic leadership style in a fast food setting, however, is similar to thestyle used in the movie in the sense that just as an owner asks for input fromhis/her employees in a fast food setting, so did Ray Kroc allow for input frompeople who worked for him in different stores, with the powdered milkshakeidea.Theconsultative leadership style in a fast food setting wasn’t used in the film,as a lot of the decisions made were rushed and didn’t allow ample space fordiscussion. The main similarity from the movie was when Kroc sought out advicefrom Harry J. Sonneborn, who managed to assist him in furthering McDonald’s.
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