MacDonalds External Environment

In this document, we shall refer to external environment as just “environment”. This article will be discussing external environment as part of Organizational Theory in the book “Organizational Theory and Design”. It is chapter four in the book by Daft and Armstrong. We shall see how external environment is applied in the field of business. the discussion of External Environment will be analyzing McDonald Company. However the general environment stills affects the Organization in different ways. The government, sociocultural, financial resources, technology and economy are all aspects of general environment. This is an overview of the Company. McDonald business was started by two brothers. They gave the name the McDonald. There is was little interaction with McDonald’s employee during service.

This is because everything at McDonalds is automated. There is little or no wastage of time at all. When I moved to Canada for a vacation, I still got outlets of McDonalds located in major cities. The layout was the same and even there was little deviation if any in services. Another economic factor is disposable income. When the amount of disposable income is reduced, people have very little cash to spend on goods and services. This in turn has got an effect on McDonald. On the other hand fall in inflation rates also leads to fall in prices of goods. As a result McDonald finds no incentive to buy foodstuffs whereas the demand goes up since people are in need of foodstuffs.

No organization can assume the external factors Another environmental factor is technological factor. Technology is rapidly changing. Those organizations which have managed to embrace technology are thriving in the midst of their competitors. Technology in food and service industry is applied in recipes and even the process of making certain meals. Organizations are spending on research and innovations so that they are always ahead of the rest. Besides this, people have different preferences depending on the culture. This has affected McDonald as well. It is serves people across various countries that have different cultures. The Company must therefore customize its menu in different countries so that it meets the taste of different people. McDonald has had to change menu across different regions.

All these techniques shows that McDonald is so much advanced to be able to realize the needs of its customers so to respond effectively in a way that meets their needs, through this, it has been able to win the loyalty of its customers. There is also a threat of new entrant into the market. This competitive industry just require any aggressive player who can offer better services that the prevailing market services in order to take over the existing businesses. However as per now, it is not easy for a new entrant since McDonald has already won the customers through a good reputation. It is therefore hard for the new entrant to get into the market accomplishing the same level of success that McDonald is doing.