Principles of General Management

Topics: Management, McDonald's, Henri Fayol Pages: 7 (2158 words) Published: January 29, 2013
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit. The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee". Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs. Ronald McDonald’s first appearance was in 1963. It was created by Williard Scott.

Henri Fayol (1841 – 1925) was a French management theorist whose theories concerning scientific organization of labour were widely influential in the beginning of the twentieth century. He graduated from the mining academy of St. Etienne in 1860 in mining engineering. The 19 year old engineer started at the mining company ‘Compagnie de commentary-Fourchambean-Decazeville’, ultimately acting as its managing director from 1888 to 1918. His theories deal with the organization of production in the context of a competitive enterprise that has to control its production costs. Fayol was the first to identify the four functions of management – Planning, Organizing, Directing and Controlling, although his version was a bit different – Plan, Organize, Command, Coordinate and Control. According to Fayol, all activities of an industrial undertaking could be divided into : Technical, Commercial, Financial, Security, Accounting and Managerial. He also suggested that the qualities a manager must possess should be – Physical, Moral, Education, Knowledge and Experience. He believed that the number of management principles that might help to improve an organization’s operation is potentially limitless. Based largely on his own experience, he developed his concept of administration. The 14 principles of management propounded by him were discussed in detail in his book published in 1917, ‘Administration Industrielle et Generale’. It was published in English as ‘General and Industrial Management’ in 1949 and is widely considered as a foundational in classical management theory. For his contribution, he is also known as the ‘Father of General Management’. The fourteen principles of management given by him are :

1. Division of Work : According to Fayol, ‘The intent of division of work is to produce more and better work for the same effort. Specialization is the most efficient way to use human effort’. Henry Fayol has stressed on the specialization of jobs. He recommended that work...
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