McDonald’s organizational structure (company structure) reflects an organizational design that coordinates operations in foodservice markets. The fast-food restaurant chain’s structural design evolves to address current and emerging market issues.
McDonald’s organizational structure supports business growth despite competition with other fast-food businesses, such as Burger King, Wendy’s, and Subway, as well as McCafé competitors, like Starbucks, Tim Hortons, and Dunkin’.
Strategies are implemented through McDonald’s business structure, which adapts to market dynamics and external forces. These external factors include the opportunities and threats explained in the SWOT analysis of McDonald’s.
This business structure sets the arrangement of company divisions and their interactions affecting the implementation of McDonald’s generic competitive strategy and intensive growth strategies for profitable products, like hamburger meals, fries, and drinks.
McDonald’s Structure Type and Features
McDonald’s has a divisional organizational structure. In this company structure type, the divisions of the restaurant business are business units based on operational requirements. McDonald’s organizational structure has the following characteristics:
- Business Units (the organizational structure’s main defining factor)
- Global hierarchy
- Function-based departments
Each division or business unit handles an operational area and strategic goals linked to McDonald’s mission statement and vision statement. This divisional business structure aims for multinational foodservice efficiency and growth to fulfill the company’s mission and vision.
1. McDonald’s Business Units
Before its reorganization in 2015, McDonald’s organizational structure had geographic divisions (U.S.; Europe; Asia/Pacific; Middle East and Africa; Other Countries). These geographic divisions focused on regional fast-food market differences.
After the 2015 reorganization, McDonald’s business structure had performance-based divisions (U.S.; International Lead Markets; High-Growth Markets; Foundational Markets and Corporate). These divisions optimized the business based on fast-food market performance and potential.
In 2023, further reorganization and adjustments were made to enhance the fast-food business through the company structure. Today, McDonald’s company structure has the following business units:
- McDonald’s USA
- International Operated Markets
- International Developmental Licensed Markets
- Global Business Services
The U.S. market generates the biggest regional sales revenues for the fast-food restaurant chain. Based on this factor, operations in the U.S. are a single business unit or division in McDonald’s organizational structure, separate from the rest of the company’s market operations.
The other business units are based on franchising/licensing agreements outside the U.S. International operations (company-owned and licensed/franchised) are managed under the International Operated Markets unit of McDonald’s company structure.
The International Developmental Licensed Markets unit involves the operations of developmental licensees in opening and developing restaurant locations in local or regional markets.
The Global Business Services (GBS) unit provides support for higher efficiency and collaboration throughout McDonald’s structure. This business unit leverages the company’s global scale to improve the effectiveness of the fast-food business and its long-term success.
These business units of the organizational structure coordinate, integrate, and grow the fast-food restaurant chain through strategies suited to the economic opportunities and related trends enumerated in the PESTLE/PESTEL analysis of McDonald’s.
These business units are structural characteristics that influence strategic formulation. For example, McDonald’s marketing mix (4Ps) reflects how this organizational structure’s business units influence marketing strategies and tactics.
2. McDonald’s Global Hierarchy
McDonald’s Corporation has a global hierarchy for all its operations. This feature of the organizational structure emphasizes corporate control, authority, command, and direction in managing the restaurant chain’s development.
McDonald’s CEO and other senior executives direct and guide all business areas through this structural characteristic. For example, the headquarters’ strategic directives and guidelines for menu innovation are disseminated through this business structure’s hierarchy.
From the headquarters, directives and guidelines go through middle managers in McDonald’s organization and are disseminated to restaurant managers and personnel at company-owned and franchised/licensed locations.
With its hierarchy, this structural design facilitates a top-down approach to McDonald’s operations management at all organizational levels of the company structure, ensuring cohesive strategic management throughout the business organization.
3. McDonald’s Function-Based Departments
McDonald’s company structure has function-based groups or departments. For example, in corporate activities, the company has a People group for human resource management and a Supply Chain group for supply chain management.
This organizational structure also includes a Global Impact team, which addresses McDonald’s stakeholders and sustainability goals for ESG, corporate social responsibility (CSR), and corporate citizenship.
Each function-based group in McDonald’s organizational structure is under the leadership of a corporate executive or senior manager. These leaders ensure the effectiveness of business functions in the fast-food restaurant chain.
Through these departments of the company structure, the organizational design addresses essential business functions, such as human resource management and the related reinforcement of McDonald’s organizational culture (company culture).
When reorganization happens, groups may be added or changed to respond to foodservice market trends and the external factors and competitive dynamics discussed in the Five Forces analysis of McDonald’s.
Advantages of McDonald’s Organizational Structure
An advantage of the hierarchy in McDonald’s business structure is its support for controlling and monitoring global operations. The fast-food restaurant chain’s scale presents managerial challenges, which are addressed through such a hierarchy.
Also, the business units of McDonald’s organizational structure have the advantage of focusing strategies on market-specific indicators. For example, the company can apply a set of strategies for the U.S. fast-food market, and separate strategies for developmental licensed markets.
These advantages show that McDonald’s corporate structure facilitates foodservice business success despite strategic issues linked to organizational size, global business scale, and market diversity.
A Disadvantage of McDonald’s Structure
A disadvantage of McDonald’s organizational structure is the potential generalization of strategies for markets and locations that belong to the same geographical business unit or division.
This business structure issue may limit the company’s business flexibility in responding to market-specific variables, such as sociocultural differences influencing consumers or diners in these fast-food markets.
Nonetheless, McDonald’s can improve its organizational structure by ensuring that these business units implement strategies that are fine-tuned to regional, domestic, or local foodservice market factors.
References
- Malenko, N. (2024). Information flows, organizational structure, and corporate governance. In Handbook of Corporate Finance (pp. 511-546). Edward Elgar Publishing.
- McDonald’s Corporation – Corporate Governance.
- McDonald’s Corporation – Form 10-K.
- McDonald’s Corporation – Where We Operate.
- Pang, Y., Wu, H., Wang, X., & Shi, M. (2025). Impact of organizational structure and in-organization resource allocation on trust and trustworthiness. Journal of Business Research, 186, 114995.
- The McDonald’s Leadership Team.
- Yang, K. (2024). Golden Arches across cultures: Understanding McDonald’s global and local consumer behavior. Advances in Economics, Management and Political Sciences, 68, 85-91.