Assignment # 01

Principles of Management (4204)

Submitted To

Ms. Sadia Afroze

Assistant Professor
Department of Accounting & Information Systems
Faculty of Business Studies, University Of Dhaka

Submitted by

Date of Submission: 28.02.2015

Faculty of Business Studies

University Of Dhaka

Critical Evaluation of the

Evaluation of Management
Theories
Theories are viewpoints with which individuals understand their reality encounters. Formally, a
theory is a lucid gathering of presumptions set forth to clarify the relationship between two or
more recognizable certainties. John Clancy calls such viewpoints "undetectable forces" to
underscore a few critical employments of theories, the "inconspicuous" routes in which we
approach our reality.
To start with, theories give a stable center to comprehension what we encounter. A theory gives
criteria to figuring out what is important. To Henry Ford, a substantial and consistent work power
was one significant element as he estimated about his business. At the end of the day, his theory
of administration included, not to mention a variety of other things, this supposition about the
supply of work.
Second, theories empower us to impart proficiently and subsequently move into more
unpredictable associations with other individuals. Envision the dissatisfaction you would
experience if, in managing other individuals, you generally needed to characterize even the most
fundamental presumptions you make about the world which you live. Since Ford and his chiefs
completely comprehended Ford's theory about assembling cars, they could cooperate effortlessly
as they confronted daytoday challenges.
Third, theories make it possible indeed, challenge us to continue finding out about our reality. By
definition, theories have limits; there is just so much that can be secured by any one theory.
When we are mindful of this, we are better ready to inquire as to whether there are elective
methods for taking a gander at the world (particularly when our theories no more appear to "fit"
our experience) and to consider the outcomes of receiving option

The Classical Management Perspective

The principal essential thoughts to rise are currently called the classical management perspective.
The classical management perspective had two essential purposes. Scientific management
concentrated on representatives inside associations and on approaches to enhance their profit.
Noted pioneers of scientific management were Frederick Taylor. Frank and Lillian Gilbreth,
Henry Gantt, and Harrington Emerson. Administrative management concentrated on the
aggregate association and on approaches to make it more productive and successful. Prominent
administrative management theorists were Henri Fayol, Lyndall Urwick, Max Weber, and
Chester Barnard.

Scientific Management
Scientific Management theory arose in part from the need to increase productivity. In the United
States especially, skilled labor was in short supply at the beginning of the twentieth century. The
only way to expand productivity was to raise the efficiency of workers. Therefore, Frederick W.
Taylor, Henry L. Gantt, and Frank and Lillian Gilbreth devised the body of principles known as
scientific management theory.
Taylor contended that the success of these principles required "a complete mental revolution" on
the part of management and labor. Rather than quarrel over profits, both sides should try to
increase production; by so doing, he believed, profits would rise to such an extent that labor and
management would no longer have to fight over them. In short, Taylor believed that management
and labor had a common interest in increasing productivity.
Taylor based his management system on productionline time studies. Instead of relying on
traditional work methods, he analyzed and timed steel workers' movements on a series of jobs.
Using time study as his base, he broke each job down into its components and designed the
quickest and best methods of performing each component. In this way he established how much
workers should be able to do with the equipment and materials at hand. He also encouraged
employers to pay more productive workers at a higher rate than others, using a "scientifically
correct" rate that would benefit both company and worker. Thus, workers were urged to surpass
their previous performance standards to earn more pay Taylor called his plan the differential rate
system.

Contributions of Scientific Management Theory

The modern assembly line pours out finished products faster than Taylor could ever have
imagined. This production Miracle is just one legacy of scientific management. In addition its
efficiency techniques have been applied to many tasks in non-industrial organizations ranging
from fat food service to the training of surgeons.
Limitations of Scientific Management Theory
Although Taylor's method led to dramatic increase in productivity and higher pay in number of
instance.
Workers and unions began to oppose his approach because they feared that working harder or
faster would exhaust whatever work was available Causing layoffs.
Moreover, Taylor's system clearly meant that time was of the essence. His critics objected to the
"speed up" conditions that placed undue pressures on employees to perform at faster and faster
levels. The emphasis on productivityand, by extension, profitabilityled some managers to
exploit both workers and customers. As a result, more workers joined unions and thus reinforced
a pattern of suspicion and mistrust that shaded labormanagement relations for decades.

Administrative Management
Though scientific management manages the occupations of individual employees, administrative
management concentrates on dealing with the aggregate association.
Side by side with scientific managers examining the persontask blend to build effectiveness,
different analysts were concentrating on administrative management, the investigation of how to
make an organizational structure that prompts high productivity and adequacy. Organizational
structure is the arrangement of assignment and power connections that control how employees
use assets to accomplish the association's objectives. Two of the most persuasive perspectives in
regards to the making of proficient frameworks of organizational organization were produced in
Europe. Max Weber, a German educator of social science, built up one theory. Henri Fayol, the
French chief who added to a model of management, built up the other. Alternate supporters to
administrative management were Lyndall Urwick (1891-1983), and Chester Barnard (18861961).

The Behavioral Management Perspective

The behavioral school rose incompletely on the grounds that the classical methodology did not
attain to sufficient creation proficiency and work environment amicability. Individuals did not
generally take after anticipated or expected examples of conduct. The behavioral management
scholars writing in the first a large portion of the twentieth century all upheld a topic that
concentrated on how directors ought to by and by act with a specific end goal to spur employees
and urge them to perform at abnormal states and be focused on the accomplishment of
organizational objectives. The "Management Insight" shows how employees can get to be
discouraged when directors don't treat their employees legitimately. Hence there was expanded
enthusiasm for helping directors bargain all the more successfully with the "individuals side" of
their associations. A few scholars attempted to fortify classical association theory with the
experiences of social science and brain research.

The Human Relations Movement

Human relations is much of the time utilized as a general term to portray the routes in which
supervisors associate with their employees. At the point when "representative management"
animates more and better work, the association has viable human relations; when spirit and
effectiveness crumble, its human relations are said to be inadequate. The human relations
development emerged from right on time endeavors to efficiently find the social and mental
components that would make powerful human relations.

Organizational Behavior
Organizational behavior is a Contemporary field concentrating on behavioral perspectives on
management. Mayo and his partners spearheaded the utilization of the scientific strategy in their
investigations of individuals in the workplace. Later scientists, all the more thoroughly prepared
in the sociologies (brain science, humanism, and humanities), utilized more modern examination
routines and got to be known as "behavioral researchers" as opposed to "human relations
scholars."

The behavioral researchers brought two new measurements to the investigation of management
and associations. In the first place, they propelled a much more modern perspective of human
creatures and their drives than did Mayo and his peers. Abraham Maslow and Douglas McGregor
among others expounded on "acknowledging toward oneself" individuals. Their work generated
new pondering how relationships can be usefully organized in associations. They additionally
discovered that individuals needed more than "immediate" joy or prizes. In the event that
individuals were this mind boggling in the way they drove their lives, then their organizational
relationships expected to help that intricacy.

Second, behavioral researchers connected the strategies for scientific examination to the
investigation of how individuals carried on in associations as entire substances. The fantastic
illustration is the work of James March and Herbert Simon m the late 1950's. Walk and Simon
created several recommendations for scientific examination, about examples of behavior,
especially as to correspondence, in associations. Their impact in the improvement of resulting
management theory has been noteworthy and continuous.

The Quantitative Management Perspective

The third significant school of management thought started to rise amid World War II. Amid the
war, government officials and researchers in England and the United States attempted to help the
military send its assets all the more productively and successfully. These gatherings took a
portion of the numerical ways to management created decades prior by Taylor and Gantt and
connected them to logistical issues amid the war. They discovered that issues with respect to
troop, gear, and submarine arrangement, for instance, could all be explained through scientific
investigation. After the war, organizations, for example, DuPont and General Electric started to
utilize the same procedures for conveying employees, picking plant areas, and arranging
stockrooms. Essentially, then, this perspective is concerned with applying quantitative
procedures to management. All the more particularly, the quantitative management perspective
spotlights on choice making, monetary viability, numerical models, and the utilization of PCs.
There are two extensions of the quantitative methodology: management science and operations
management.

Management Science
The management science school picked up prevalence through two post bellum phenomena. To
begin with, the advancement of highspeed PCs and of correspondences among PCs gave the
intends to handling complex and largescale organizational issues. Second, Robert McNamara
executed a management science approach at Ford Motor Company in the 1950s and 1960s.
(Later, he brought the same way to his task as Secretary of Defense in the Johnson
Administration.) As McNamara's socalled "Hotshots" proteges moved to management positions
at Ford and crosswise over American industry, the management science school thrived. On the
off chance that you end up meeting expectations m an association where "crunching the
numbers" is the focal way that management choices are arrived at and defended, you can express
gratitude toward McNamara and his era.
Today the management science way to taking care of an issue starts when a blended group of
pros from significant controls is brought into examine the issue and propose an approach to
management. The group builds a numerical model that shows, in typical terms, all significant

elements bearing on the issue and how they are interrelated. By changing the estimations of the
variables in the model, (for example, expanding the expense of crude materials) and breaking
down the distinctive comparisons of the model with a PC, the group can focus the impacts of
every change. Inevitably, the management science group presents management with a target
premise for settling on a choice.
Management science offered an entire better approach to consider time. With advanced scientific
models and PCs to crunch the numbers, determining the future in view of the over a significant
time span turned into a famous action. Administrators can now play with the "imagine a scenario
where the future resembles this?" inquiries that past management theories couldn't deal with. In
the meantime, the management science school gives careful consideration to relationships as
such in associations. Numerical displaying has a tendency to disregard relationships as
information, underlining numerical information that can be generally effectively gathered or
evaluated. The feedback is along these lines that management science advances an accentuation
on just the parts of the association that can be caught in numbers, missing the significance of
individuals and relationships.

Operations Management
Operations management is to a degree less numerical and factually complex than management
science and can be connected all the more straightforwardly to managerial circumstances. In
reality, we can consider operations management as a manifestation of connected management
science. Operations management methods are by and large concerned with helping the
association create its items or administrations all the more effectively and can be connected to an
extensive variety of issues.

The Systems Perspective

Rather than dealing separately with the various segments of an organization, the systems
approach to management views the organization as a unified, purposeful system composed of
interrelated parts. This approach gives managers a way of looking at the organization as a whole
and as a part of the larger, external environment. Systems theory tells us that the activity of any
segment of an organization affects, in varying degrees, the activity of every other segment.
Production managers in a manufacturing plant, for example, prefer long uninterrupted production
runs of standardized products in order to maintain maximum efficiency and low costs. Marketing
managers, on the other hand, who want to offer customers quick delivery of a wide range of
products, would like a flexible manufacturing schedule that can fill special orders on short
notice.
Systems oriented production managers make scheduling decisions only after they have identified
the impact of these decisions on other departments and on the entire organization. The point of
the systems approach is that managers cannot function wholly within the confines of the
traditional organization chart. They must mesh their department with the whole enterprise. To do
that, they have to communicate not only with other employees and departments, but frequently
with representatives of other organizations as well. Clearly, systems managers grasp the
importance of webs of business relationships to their efforts.

The Contingency Perspective

The contingency approach (some of the time called the situational approach) was created by
managers, specialists, and scientists who attempted to apply the ideas of the real schools to real
life circumstances. At the point when systems very powerful in one circumstance neglected to
work in different circumstances, they looked for a clarification. Why, for instance, did an
organizational advancement project work splendidly in one circumstance and come up short
wretchedly in an alternate. Supporters of the contingency methodology had a consistent response
to all such inquiries: Results vary on the grounds that circumstances contrast; a system that
works for one situation won't essentially work in all cases. As per the contingency approach the
chief's errand is to recognize which method will, in a specific circumstance, under specific
circumstances, and at specific time, best add to the achievement of management objectives.
Where laborers need to be urged to build productivity, for instance, the classical scholar may
endorse another worksimplification plan. The behavioral researcher might rather try to make a
mentally spurring atmosphere and suggest some methodology like employment enrichmentthe
mix of assignments that are diverse in degree and obligation and permit the laborer more
noteworthy self-rule in deciding. At the same time the chief prepared in the contingency
methodology will ask, "Which system will work best here?" If the specialists are incompetent
and preparing open doors and assets are restricted, work improvement would be the best
arrangement.
Nonetheless, with gifted specialists determined by pride in their capacities, a jobenrichment
system may be more compelling. The contingency approach speaks to a vital turn in present day
management theory, on the grounds that it depicts every set of organizational relationships in its
one of a kind circumstance.

EXPLAIN HOW ENVIRONMENTAL

FACTORS AFFECT A COMPANY
Every organization has some specific strategies to run the business perfectly. Strategy is the
direction for an organization which shows the way to reach the goal. No organization can
achieve their goal without specific strategies. So the different strategies are taken to establish the
business in this competitive age. Strategic planning is one of them and its effectiveness varies on
what type of organization and what are their mission, vision and target. The success of
organization depends on its perfect strategic planning. It is an initial and main step towards the
survival and success in any business organization. There is some multicultural organization in the
world which has to face some controllable and uncontrollable factors. As we know, the other
names of these factors are internal and external factors. Before formulating strategic planning,
the organizations need to consider internal and external factors. Internal factors are something
such as management, machine, material, material, money and man power that can be controlled
or operated by the organization. On the other hand, external factors are uncontrollable. Now, we
are passing the age of globalization. Most of the global issues are influenced to the
organizational strategy formulations which are uncontrollable.

External Factors affecting an organization:

External factors are very important for organization as in many cases it have been revealed that
the success of organization depends on its external factors. All external factors affecting a
company which are mentioned here customers, shareholders, government, culture, weather and
so on. We can see some macro or external factors in this global business which is uncontrollable
for any multinational or other business organizations.
Political factors:
Political and legal factors influence the development of the organization or industry. These
factors shape the rules of competition, operational costs (minimum wage safety requirements and
consumer law) and the presence of various lobby groups. The important political factor is local

legislations regarding foreign ownership, cross-ownership and concentration. In March 2006,

Mcdonalds Board of Directors adopted a Political Contributions Policy that formalized our longstanding practices regarding contributions to political parties, candidates for public office and
political organizations. The policy recognizes that it may be in the company's best interests to
make political contributions. For those cases, the policy is intended to ensure that contributions
are made in a manner consistent with the law and the company's core values. In UK, the new
coalition government came which changing the immigration policy. These change making up to
non-European workers to come and work in UK. Its impact directly affecting the Mcdonalds.
Basically, those workers are hard working, skilled, and cheap and root level worker. Absence of
them will create a problem for Mcdonalds.
The policy reiterates the provision in the Standards of Business Conduct that requires advance
approval of political contributions, and it establishes guidelines for reviewing requests. Under the
policy, management reports semi-annually to the Board's Audit Committee on political
contributions that have been made. Political contributions made in the U.S.
Economic factors:
The economic factor has a crucial importance for the organization or industry development.
Mcdonalds has achieved economic scale. We know the development of an organization depends
on its economical condition and it is earned through maximizing profit and minimizing cost.
Mcdonalds is trying to achieve that.
Social factors:
The demand trends are shaped by the following major factors: demographic shifts, attitudes and
beliefs and fashion cycles. Demographic shifts create different place markets; whereas fashion
cycles together with attitudes formation create necessary growth for the market. Mcdonalds has
a Corporate Responsibility Committee which acts in an advisory capacity to the Companys
management regarding policies and strategies that affect Mcdonalds role as a socially
responsible organization, such as issues related to product safety, workplace safety, employee
opportunities and training, diversity, the environment and sustainable supply chain initiatives.

Technological factors:
Technological factors affect the way industry players compete. The introduction of improved
technological solutions allows the companies to reduce cost of operations, increase the
manufacturing capacity and quality. Mcdonalds brought a radically change in Technological
System in his company from the crew room to the board room. In till, they using computerized
counting machine. They introduced e-business besides this system of Customer service, energy
saving to minimize fuel, recycling waste and so on.
Environmental factors:
The most important thing is to analyze the possible environment of organization. Environmental
factors can change the out look of organization. Environmental factors play an important part in
the success of the business as it affect input manufacturing capacity. Mcdonalds is trying to
create sound environment in his every restaurant for customers and its employees. It is seeking
ways to improve their environmental performance. Efficiency and innovation are natural byproducts of thinking green. After all, when they conserve energy, produce less waste and
minimize resources used by our suppliers, they use less and spend less. So it is always forward to
make sure its sound environmental factors for all classes of people. It focused three areas such as
Energy conservation Find further ways to enhance energy efficiency in its restaurants to
facilitate save money and reduce its environmental impacts on sustainable packaging and waste
management regular exploring ways to reduce the environmental effects of its consumer
packaging and waste in its restaurant operations green building design develop its strict
building standards to include further opportunities for environmental efficiencies and
modernization in the design and construction of its restaurants
Legal factors:
There are legal confinements on many aspects of organizations activities. Mcdonalds is very
aware of legal issues in his company. Such as: laws against discrimination, health and safety at
work, regulation of monopolies and restrictive practices, laws governing labour relation
including strikes and pickets, employment and redundancy law as well as United Kingdom statue
and common law and regulations of the European community have to keep in view. In this global

credit crisis period, external factors are main significant experience for any multinational
organizations to perform business and survival in the competitive business area.

Internal environment affecting an organization:

The internal environment is the environment that has a direct impact on the business. Here there
are some internal factors which are generally controllable because the company has control over
these factors. It can alter or modify such factors as its personnel, physical facilities, and
organization and functional means, like marketing, to suit the environment. The important
internal factors which have a bearing on the strategy and other decisions of internal organization
are discussed below.
Suppliers
An important force in the micro environment of a company is the suppliers, i.e., those who
supply the inputs like raw materials and components to the company. The importance of reliable
source/sources of supply to the smooth functioning of the business is obvious.
Customer
The major task of a business is to create and sustain customers. A business exists only because of
its customers. The choice of customer segments should be made by considering a number of
factors including the relative profitability, dependability, and stability of demand, growth
prospects and the extent of competition.
Competition not only include the other firms that produce same product but also those firms
which compete for the income of the consumers the competition here among these products may
be said as desire competition as the primary task here is to fulfill the desire of the customers. The
competition that satisfies a particular category desire then it is called generic competition.
Marketing Intermediaries
The marketing intermediaries include middlemen such as agents and merchants that help the
company find customers or close sales with them. The marketing intermediaries are vital links
between the company and the final consumers.

Financiers
The financiers are also important factors of internal environment. Along with financing
capabilities of the company their policies and strategies, attitudes towards risk , ability to provide
non-financial assistance etc. are very important.
Owners
The owners of a business are, of course, the people who have legal property rights to that
business. Owners can be a single individual who establishes and runs a small business, partners
who jointly own the business, individual investors who buy stock in a corporation, or other
organizations.
Board of Directors
A corporate board of directors is a governing body elected by the stockholders and charged with
overseeing the general management of the firm to ensure that it is being run in a way that best
serves the stockholders' interests. Some boards are relatively passive. They perform a general
oversight function but seldom get actively involved in how the company is really being run. But
this trend is changing, as more and more boards are carefully scrutinizing the firms they oversee
and exerting more influence over how they are being managed. This trend has in part been
spurred by numerous recent business scandals. In some cases, board members have been accused
of wrongdoing.