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Ray Kroc
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Background of Ray Kroc (Pace, 1984)

Mr. Ray Kroc was born on 5th October, 1902 in Oak Park.

Ray Albert Kroc did not have the diploma of high school, so during World War I, he served as an ambulance driver like his fellow Oak Parker.

Then, after he tried to do myriad things, he began to work in the Lily Tulip Cup Company to sell paper cups. Seventeen years later, he had become sales manager for the Middle West in this company.

In 1941, Mr. Kroc became the exclusive sales agent for a machine that could prepare five milkshakes at a time.

In 1954, Mr. Kroc realized that one of his largest customers Richard and Maurice McDonald owned a fast-food emporium in San Bernardino, California. After that Mr. Kroc considered to open franchise outlets patterned on their restaurant, which sold hamburgers, fries and milkshakes in quite low prices.

In 1955, after the communication with the McDonald brothers, he paid them a small percentage of the gross of his operation and opened his first restaurant in Des Plaines, another Chicago suburb.

Within a year, in California, Mr. Kroc opened the second and third restaurants because of the excellent business of the first one.

In five years, there were 228 restaurants belonging to Mr. Kroc, and in 1961 he bought out the McDonald brothers.

By the year of 1965, McDonald's would boast more than 700 sites.

Mr. Kroc met his wife, Joan in 1956 and they were married in 1968. Joan found Operation Cork in 1976 which was financed by McDonald's revenues through the Kroc Foundation. Operation Cork was a national program to help the families of alcoholics.

Mr. Kroc died of a heart ailment at Scripps Memorial Hospital in San Diego on January 14th, 1984. He had been senior chairman of McDonald's at his death.

  

Traits

Courage

Mr. Kroc gave up piano playing and instead he was working as a good salesman in selling paper cups. When he was 35 years old, he decided to strike out on himself. He opened a company selling milk-shake-mixer by borrowing a great amount of money. When his wife was worried about the risks of his business, Mr. Kroc told her confidently, “you have to take risks, and in some cases you must go for broke.” Due to Mr. Kroc’s self- confidence, eventually he was successful in the field of milk-shake-mixer market. (Hattwick, 2001)

Great insights

In 1950, Mr. Kroc found that the mixer business had reached its peak period, so he had to develop new products to sell. Just at that time, he heard the stories of the McDonald brothers who had done an excellent business of a drive-in restaurant. He tried his best to find out how did the McDonald brothers operate the business, and finally made a deal with them that Mr. Kroc could own and franchise similar restaurants across the country. (Hattwick, 2001)

Motivation

For example, in 1956, 11 new franchised stores were opened, while in 1957 another 25 more were opened. Mr. Kroc made a decision that he should hire a full time operations man. As there were 657 McDonalds’ chain stores with grossing $129 million in the beginning of 1965, so McDonald decided to provide trainings for new operators at its Hamburger University. This method motivated local store operators effectively to maintain quality standards. (Hattwick, 2001) This training course was called “Bachelor of Hamburgerology with a minor in French fries.” In this course instructors taught new McDonald's owners how to clean grills, how to flip a hamburger and how to tell when one was done- “It starts turning brown around the edge.” (Pace, 1984)

 

Situational Leadership

    After Mr. Kroc opened his own restaurants, he learned that franchising should under the control of corporate headquarters, because without direct supervision, the franchises disobeyed Kroc's rules of uniformity and went their own way. As McDonalds’ system was successful, in Mr. Kroc’s opinion, he did not need to re-invent the existing rules by the McDonald, just copying the model. Mr. Kroc said that “When something works and is proven, you have a big head start.” These rules of the McDonald's system that the franchisees had to follow could ensure the business on good process. The first operating manual included food-preparation instructions and cleaning procedures in details. And it offered “detailed information ranging from the amount of onions to be used on a hamburger (a quarter ounce) to the correct temperature of hot chocolate (170 degrees Fahrenheit).” In addition, Mr. Kroc also followed one of the rules of the McDonald brothers- he did not hire women servers in order to avoid that they might attract high school boys. (Anonymous, 2005) Mr. Kroc’s restaurant had almost the same operating systems as the McDonald bothers’ one. In the beginning of establishing the new restaurants, Mr. Kroc should spend time on the more important things, so copying the existing model was the best choice.

 

Transformational Leadership

    Mr. Kroc had done a good work to motivate their followers to have their own ambitions towards the business. He had said that, “I guess to be an entrepreneur you have to have a large ego, enormous pride and an ability to inspire others to follow your lead.” His thinking had great effects on their followers’ behaviors, so his leadership unending urged their followers to build and excel the leaders’ expectations. “Some people reach their level of expectations pretty quickly,” he once observed. “We want someone who will get totally involved in the business. If his ambition is to reach the point where he can play golf four days a week or play gin rummy for a cent a point, instead of a tenth, we don't want him in a McDonald's restaurant.” That is why many McDonald’s executives decorated their offices by hanging scrolls with their favorite inspiration dictum. (Pace, 1984) When the followers had their own ambitions, they would think they had belonged to the team and they were important to the development of the whole organization, so they would try their best to help the leaders to achieve the final goals. (Anonymous, 2005) 

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