Class 12 (CBSE) project on principles of management (Business studies)

The students are required to visit any one of the following: A departmental store, An Industrial unit, A fast food outlet, Any other organization approved by the teacher. They are required to observe the application of the general principles of management advocated by Henri Fayol.

Solution:

I chose to visit branch of the Fast Food Outlet – Mc Donalds. It took me 3-4 viits of Mc Donalds’ to observe and analyse the application of Fayol’s 14 principles of management. For this, I took an interview of the Branch Manager, survey of employees of Mc Donalds and also of the customers visiting the outlet, so as to know their respective views regarding the organisation’s management. It also gave me an idea of customer’s expectation and views with respect to management. Overall, it was a great learning experience doing the project.

Mc Donalds: Case Study

Type: public Company
Industry: Restaurants
Founded Mc Donalds Corporation, April 15, 1955 in Desplaines, Illinois.
Founder(s): Richard and Maurice Mc Donalds (Mc donalds Restaurant Concept)
Ray Kroc (Mc Donalds corporation founder)

Headquarters: Mc Donalds Plaza, located in Oka Brook, Illinois, U.S.
No of locations: 33,000+ worldwide
Products: Fast food e.g hamburger, french fries, soft drinks, coffee, milk shakes, etc.

Revenue: US $24.075 billion
Net Income: US $4.949 billion
Total Assets: US $31.975 billion
Total Equity: US $14.634 billion

Employees: 4,00,000

Mc Donalds corporation is the worlds largest chain of hamburger fast food restaurants, serving customers daily in over hundred countries around the world.

A Mc Donalds restaurant is operated by either a franchisee or by an affiliate of the corporation. The corporation’s revenues come from the rent, royalties and fee paid by the franchises as well as sales in company-operated restaurants.

Mc Donalds’ primarily sells hamburgers, cheeseburgers, chicken burgers, french fries, soft drinks and milk shakes. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruits.

Mc Donalds’ restaurants offer both counter service and drive-through service, with indoor as well as sometimes outdoor seating.

To accommodate the current rend for high-quality coffee, Mc Donalds also introduced ‘Mc Cafe’. Today, most Mc Donalds in most countries have Division of Work

Mc Donalds certainly practices this principle of management as its employees are divided into departments that match their capabilities and expertise in order to produce effectively and efficiently. it is important that people who have an ability or special talent are placed at the correct department in order to maximize that ability as specialisation.

The company has a number of departments: Human Resource Department, Payroll Department, Property Department, Complaint Department, Marketing Department, etc. which subsequently leads to better work for the same effort.

Subordination of Individual Interest to General Interest

This principle “Subordination of Individual Interest to General Interest” is unquestionably followed in the organisation named Mc Donalds.

Employees are required to follow and implement the same plans and policies which are laid down by the apex level of hierarchy i.e. the top management. The interests of employees are not given priority over the interest of the organisation, which is accountable to a large number of stake holders – society, customers, owners, etc. All of these are to be dealt with. So, their interests cannot be ignored but are well taken care of. The employees who want to exert pressure on the organization or want to pursue their interests at the cost of the organisation are counselled.

Unity of Direction

This principle is definitely practiced in Mc Donalds. The overall objective of this organisation is to maintain its position as No 1 in the market, also the people working in various departments believe in achieving the target sales and production assigned to the respective departments. This enables the employees of the organization to stay on track and perform at their best if they are aimed at one specific objective. These following principles prove to be stepping stone to success for Mc Donalds.

Discipline

Mc Donalds’ unquestionably applies this principle of management because the reputation of Mc Donalds and the variety of meals it provides are enough to prove it. A fast food outlet cannt achieve the position in the hearts of people which Mc Donalds has.

So good discipline is quite essential in any organisation.

The interview with the Manager of Mc Donalds and the survey I conducted for the employee helped me realize that there are clear and fair agreements regarding the hours of work and criterion for leave taking, which is an essential attribute of the principLe – DISCIPLINE.

Remuneration

The interview I conducted with the Branch Manager of Mc Donalds helped me realize that the principle of employees is being applied there. According to him, the salaries that they provide to their employees are adequate in relation to the tasks/job they perform. It may not give them a reasonable standard of living but is fair, justifiable and reasonable.

Unity of Command

‘Unity of command’ principle of management is unquestionably being practiced in Mc Donalds. As per the organisational structure of Mc Donalds, there is a clear superior authority for each and every subordinate working there.

For example, for employees of a branch, their superior is the Branch Manager and the Branch manager in turn is accountable to the other top level authorities.

Therefore, it is evident that each subordinate has to take orders from one and only one superior. Thus the principle ensures that there is no confusion on the part of employees, regarding whose tasks are to be done. This, subsequently, helps in avoiding conflicts between superiors and subordinates and leads to smooth function of the organisation.

Espirit De Corps

This principle is undoubtedly being followed in Mc Donalds. As per the information provided by the Branch Manager, the reason why it is such a huge success today is because of the harmony and unity within the organisation itself. Though it has clear lines of authority, it still promotes unity and harmony among its employees and staff. It is indeed necessary in any organisation because being too rigid would not bring out the best out of the members of an organisation.

Mc Donalds has grown into such a success today because of the contribution of each and every employee and when an organisation works enthusiastically and is built like a family, I personally feel it would reach heights and that is exactly what Mc Donalds has accomplished. Promoting spirit De Corps by superiors in an organization is a key to strong foundation and future triumph of the organisation.

Stability of Personnel

The organisational structure of Mc Donalds, being centralised, does not give flexibility to employees regarding initiative. Moreover, most of the employees work in the organisation on part time and the job agreements are on ad-hoc basis only. There are only a handful of employees who work as full time. Although employees are given a reasonable time to show results, yet they love to face frequent transfers in other branches which consequently has an adverse effect on the productivity and efficiency of employees. So, some of them who find it inconvenient tend to leave and the cycle for search of new employee thereby begins.

Centralisation and Decentralisation

Mc Donalds uses a predominantly centralised structure to ensure that control is maintained over their thousands of outlets. The need to ensure consitency of customers experience and quality of each location outlet is the main reason. It makes it easier for them to implement common policies and practices for the business as a whole and makes it easier for Mc Donalds to coordinate and control from the centre e.g. in case of deciding budgets for an year.

Although it helps them achieve economies of scale, violating this principle has certain adverse effects, such as:

It leads to delay in decision making. Strict control at the top management does not allow the Branch manager or employees to take initiative. It lowers the importance of an employee or subordinate, which consequently lowers the sense of belonging ness towards the organisation.

Scalar Chain

the principle of “Scalar Chain” propounded by Fayol is not followed in Mc Donalds within each branch, there is one and only one superior/boss – the Branch Manager, to whom all the employees of the respective branch are accountable. He is the only superior to be consulted and to seek advice from. Thus, the chain of superior and subordinates becomes invalid in this case. Be it an emergency or a casual message, the General Manager is to be told about the same.

Authority and Responsibilities

Fayol’s principle of “Authority & Responsibility” is practiced in Mc Donalds’. Each employee or subordinate is given adequate authority to perform their respective tasks along with the responsibility to complete it on time. For example, the cook is given a standard time to prepare a certain dish and is given authority on requisition of all things he/she requires for this purpose. Therefore, the employees are given authority and responsibility in balance, which is required by the principle.

Initiative

‘Initiative’ principles of Management is particularly applied in Mc Donalds’ as all the employees of this organisation are departmentalized according to their expertise with a clear superior to report to and seek advice from. But employees to do not possess flexibility to come up with new and innovative ideas. Before a certain decision is actually made on the execution of the ideas, the central authority’s permission is essential. However violation of this principle has certain disadvantages as well, such as frustration among the employees, employees will not work to the best of their abilities if they are not consulted while making plans, etc.

Conclusion

According to the survey I conducted for the employees and the customoers of M’c Donalds and the interview with the manager, the 14 principles propounded by Henri Fayol regarding Management are mostly applicable in case of Mc Donalds.

Mc Donalds follows Division of Work. Authority and Responsibility, Equity, Order, Discipline, Remuneration, Subordination of individual interest to general interest, Unity of command, Unity of direction, and Espirt de corps.

It partially follows initiative principle and does not follow Scalar Chain Centralisation and Decentralisation and Stability of Personnel principle.

According to me, Mc Donalds has become more stringent towards the application of these principles in its general administration and it has been rightly said – “Management to the life giving element of every business; without it, the resources of production will only remain resources and shall never become production.

studymumbai

StudyMumbai.com is an educational resource for students, parents, and teachers, with special focus on Mumbai. Our staff includes educators with several years of experience. Our mission is to simplify learning and to provide free education. Read more about us.

---

GET INSTANT HELP FROM EXPERTS!

• Looking for any kind of help on your academic work (essay, assignment, project)?
• Want us to review, proofread or tidy up your work?
• Want a helping hand so that you can focus on the more important tasks?

Hire us as project guide/assistant. Contact us for more information