Question

McDonald’s Plans Corporate Job Cuts, ‘Eliminating Layers’

McDonald's corporation is planning a reorganization that will include a significant amount of corporate job cuts. In recent years, McDonald's has lost considerable business to rival fast food companies. They plan to focus on restructuring the organization from the bottom up by shrinking the corporate job chain. A number has not yet been set on how many jobs will be cut.

Several minor changes will be made to the way the food is prepared and to the upcoming menu. McDonald's is working to provide a healthier alternative to fast food. They will also cater to the tech savvy youth by allowing customers to place orders through a cell phone app. In the future they are hoping that these changes will bring back their loyal group of customers.

can you help me answering the following:

1.) As a large corporation, how do you know when there is a surplus of corporate jobs?

2.) As a growing business, how do you know when you need to expand and create an additional layer in the job chain?

3.) What are the pros and cons of a reorganization?

Answer 1

1. surplus of corporate jobs: when it will be easy to find workers/employees at a resonably lower wage rate/income, we can say there is surplus of workers in the market and corporate and easy find them, they will have the bargaining power. Whereas, when workers ae less, and bargaining power lies in the hand such that they can demand higher income and wage we can say that there are lot of jobs in the market(i.e demand is more than supply of the workers).
2. as and when project and work becomes tedious and grow, and you need to make the organisation more structured so that it is easy to tackle and do work more effciently, more layers in organisation more effective and efficient is the communication b/w employees and easy problem solving. For example , when projects undertaken by the organisation increases it will be easy to have number of managers looking for different projects seperately rather than single manager looking after everything.
3. pros- can be cost effective, more efficient, in line with the industry demand, technical upgradation cons- if cost benefit analysis is not correct it will affect the currenct cashflows of the organisation negatively, changes bought to the organisation may not be accepted by the customers and other stakeholders, it might lead to loosing of worthy staff members.