10 Introduction

McDonald’s Corporation is one of the biggest and largest fast food restaurants in the world.
For over 30 years the McDonald’s brand has been successful in selling hamburgers and fries.
Having committed employee and happy customers has been able McDonald’s to employ
many employees around the world, giving them a choice of career. Under the leadership of its
current President and CEO, Jim Skinner, McDonald’s have grown into a multi-billion
corporation with revenue of 22 billion as of fiscal year 2008.

Jim Skinner is the current President and CEO of McDonald’s corporation. Skinner worked
his way to the top where he began his career working at McDonald’s as a restaurant manager
trainee in 1971. Skinner never graduated from any universities or colleges but he has served
ten years for the United States Navy. Beginning his career with McDonald’s after serving the
navy, he quickly advanced and held many leadership positions during his 38 years with
McDonald’s. Because of his impressive and outstanding leadership, Skinner has been named
by many as one of the best CEO in the world.
20 Leadership

According to the book Organizational Behavior by Stephen P. Robbins, 2001, 9th edition,
there are numbers of leadership theories that can be use in an organization. In this report, the
student will look into Situation Leadership Theory outlining how Task Behavior and
Relationship Behavior can be used in different situations and Path-Goal theory outlining how
it can be used to influence subordinates. This report adopts the theories that have been
applied by McDonald’s and its leader in situation today.

2.1 Situation Leadership Theory (SLT)

Paul Hersey and Ken Blanchard developed a Situation Leadership Theory based on the idea
that leaders need to alter their behaviors depending on one major situational factor the
readiness of followers. SLT is a contingency theory that focuses on follower’s readiness
(Stephen P. Robbins, 2001). It focuses on two behaviors; Task Behavior and Relationship
Behavior.

Task Behavior is the leader’s tendency to spell out duties and responsibilities of the group
(Davidson and Griffin, 2003). And Relationship Behavior is how much the leader uses two-
way or multi-way communications, including listening, facilitating and supportive behaviors
(Davidson and Griffin, 2003). To determine which combination of behaviors is the most
appropriate for a given situation a leader must assess the readiness of the follower. This is the
follower’s willingness and ability to accomplish a task. The following diagram will outline
how the four leadership styles; telling, selling, participating and delegating can be used in
different situations (Appendix 1).

In using the Situation Leadership Theory, leaders decide the task areas they want to
influence, by assessing the individual’s readiness level and then selecting the leadership style
corresponding to that level.

2.2 Situational Leadership Theory at McDonald’s

Although McDonald’s as a company has provided the tools and materials for management in
their training, Jim Skinner has realized that it has lacked knowledge that people and times
have changed. From being a trainee manager to becoming a restaurant manager, Task
Behavior was a strong practice. Jim Skinner and McDonald’s head management spelled out
duties or responsibilities and also emphasized what the outcomes would be. Been able to
voice an idea or provide an opportunity to clarify issues was not possible. The question of
retention management was becoming a problem, as restaurant managers were becoming more
educated on what else could be done to improve situations and be a participant leader. It was
apparent that no effort was made to adjust their leadership style to accommodate for store
manager’s readiness.

Jim Skinner has stated that leaders in McDonald’s have to share their vision. Specifics like
operation decisions, having a say in store budgets, ideas of in-store promotions and local
store marketing were important decisions to be made by restaurant managers. Restaurant
managers knew the business better than department heads or consultants because the
restaurant manager was more involved in the day to day operations of the business. Although
some of the participating leadership styles were used by restaurant managers it was not
always favored by department heads or consultants.

Jim Skinner realized that minor delegating was practiced by the restaurant manager for in-
store activities, but was still restricted on what could be delegated, such as implementing
decisions to improve responsibilities. Jim Skinner strongly emphasized the need for
restaurant managers to use more of participant leadership style was important for the
company’s move in the future. Leaders such as consultants need to realize that a task would
be completed quicker and faster when a decision was made directly by a restaurant manager,
rather than going through variety of channels. Jim Skinner believes that creating that
satisfaction of self involvement in the business leads to happier followers. The following
table outlines a guide of the different leadership style that been used with different levels of
management in McDonald’s (Appendix 2).

2.3 Path-Goal Theory

House and Mitchell describe the Path-Goal theory as being leader behavior that can influence
motivation and job satisfaction of subordinates. Path-Goal Theory is the theory that a leader’s
behavior is acceptable to subordinates insofar as they view it as a source of either immediate
or future satisfaction (Stephen P. Robbins, 2001). This theory argues that the perception of
subordinates is affected by leader’s behaviors, directive, supportive, participative and
achievement oriented. Such flexibility will give leaders the ability to consider the impact their
behaviors would have on subordinate motivation, goal attainment and job satisfaction.

2.4 Path-Goal Theory at McDonald’s

Having a goal set with an incentive attached always seemed to be the way to have someone
complete tasks. However, in today’s age this is not so. Jim Skinner realized that McDonald’s
is faced with the question of “What else can we do to make our restaurant managers and the
subordinates happy and work for the company’s goal?” Incentives were great but not as
attractive any more, compared to what duties needed to be completed.

For a long time Jim Skinner has been adopting McDonald’s restaurant managers to be given
directive leadership which seemed to be quite a successful style. The reward and the
performance of a duty were linked to ensure that a restaurant manager had a reason to
complete the task. Expectancy to increase performance improved and so did the reward
expectancy. Granted, there has been a change in people’s lifestyle and the thought of working
twice as hard is not anymore as it was ten years ago. Incentives need to be favored to
individual needs and realistic to achieve, with a work load that does not affect the
individual’s lifestyle. But, a leader’s directive behavior sometimes is not attractive to
subordinates.

In today’s time, Jim Skinner believes that participative and achievement oriented leader
behaviors are what will motivate and job satisfy today’s restaurant managers in McDonald’s.
Both the behaviors require the involvement of both sides of management the leaders and
subordinates. Being able to involve both parties and encourage suggestions and consider
ideas during decision making in the participative behavior, increases the efforts of a
restaurant manager’s performance, making rewards seem much easier to achieve.

Jim Skinner believes that an achievement-oriented leader is a great example of what leaders
in McDonald’s have lacked for a long time. Leader that is able to have high level of
confidence towards the subordinates. As of today, we can see through the leadership of Jim
Skinner, we have seen leaders allowing restaurant managers make decisions at a store level.
Decisions like, what goals would be the most important to the store, what budgets should be
for the next year and who should be promoted. Implementing this style of leadership will
increase the performance job satisfaction of the restaurant manager and resulting in a
reduction in management turnover and long-term employees.

Jim Skinner’s decision to adopt a path-goal theory of leadership at McDonald’s has clarified
the path so subordinates know which way to go. In clarifying the path, it has helped to
remove ‘roadblocks’ for the subordinates. In removing these ‘roadblocks’, Skinner have
scour the path and help his subordinates move the bigger blocks.
30 Conclusion

It was found that Jim Skinner and McDonald are used to implement a directive leadership
style on its restaurant managers. Jim Skinner move to adopt and implement to become more
of a participative leader was a beneficial decision. Most of the leaders such as consultants,
realized that a task would be completed quicker and faster when a decision was made by a
restaurant manager rather than someone telling them, creating that satisfaction of self
involvement in the business, which lead to happier followers. Adopting a path-goal theory
was in some cases quite similar to the situation leadership theory. The theory argued that the
perception of subordinates is affected by leader behaviors, directive, supportive, participative
and achievement oriented. The theory gave restaurant managers the ability to consider the
impact their behaviors would have on subordinates motivation and goal. Today, under the
leadership of a man like Jim Skinner, McDonald’s have great strength of having quality
leaders in its restaurant, someone that can influence others to achieve organizational goal.
Fortunately, McDonald’s was not too late in implementing changes and these changes have
been essential in improving the company’s leadership styles. Effort has been made to remove
directive leadership behavior and to replace it with a participative leadership style.
Nonetheless, many of the qualities of yesterday’s leaders are hard to find in today’s leaders.
Thus, by adopting Path-Goal theory of leadership has what make Jim Skinner and
McDonald’s successful and Skinner’s leadership style of implementing achievement-oriented
leadership and participative leadership has been considered to be most successful at
McDonald’s.
Appendix

Appendix 1

Leadership Style Readiness

Telling Used in low readiness situations
Selling Used in low to moderate readiness situations
Participating Used in moderate high readiness situations
Delegating Used in high readiness situations

Source: (Davidson and Griffin, 2003)

Appendix 2

Leadership Style What is the Style Manager level

Telling Giving direction, what and Trainee manager / Assistant
how to do Manager
Selling Specific direction, willing Assistant Manager / 1st
and enthusiastic Assistant
Participating Two communications, Store Manager / consultant /
supportive Assistant Manager
Delegating - Store Manager, 1st Assistant
References

1. Stephen P. Robbins, (2001), Organizational Behavior, 9th Edition, Pearson Prentice

Hall, Pearson Education, Inc, Upper Saddle River, New Jersey.
2. Davidson and Griffin, (2003), Management, 2nd edition, Milton, Wiley.
3. http://en.wikipedia.org/wiki/McDonald%27s
4. http://en.wikipedia.org/wiki/Jim_Skinner
5. McDonald's publication. "Corporate FAQ