Analyzing Rolls Royce's Operational Efficiency: A Case Study

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LOGISTICS, OPERATION AND
SUPPLY CHAIN MANAGEMENT

About Rolls Royce
Rolls Royce is a British luxury car making company. It was established in the year 1998 and
is owned by the German automation group BMW. It is UK based company headquartered in
Goodwood, United Kingdom. Rolls Royce is specialised in manufacturing motor cars since
2003. The chairman of Rolls Royce is Peter Schwarzenbauer and Giles Taylor is the design
director. There is staff of around 1300 people. The staff is highly trained and qualified.
The company was involved in car manufacturing and producing since 1906. In 1998, BMW
was given the rights of Rolls Royce. The legal rights of the brand name and brand logo were
given to BMW. Rolls Royce manufactured cars under the chief executive Torsten Muller-
Otvos, which led to the growth of the company by 600%, making it the second-largest market
after US.
Every stabilized organization needs to know some techniques and theories. The theories help
in the maintenance and management of the operations and supply chains.
Classical Management Theory
Classical Management Theory is defined as that the workers only have physical and
economical needs. This theory does not believe that an employee has social and self-
satisfaction needs. This theory mainly focuses on profit maximization, leadership and
decision-making. Classical Management Theory segregates the workplace into three main
components:-
Hierarchical Structure- under this theory, the hierarchy of an organization is based on the
proprietors, board of directors and managers. The proprietors are the owners of the
organization. Owner is responsible for regulating and managing the assignments. They also
collect a daily report from the managers about the activities. Trainings are also provided to
the employees regarding the working of the organization.
Specialization- this defines that a large amount of work is segregated into smaller pieces.
Each employee is given a specific task according to the skills and qualities he has. This
eliminates the work stress only on one employee. This also promotes work efficiency and
productivity.
Incentives- employees are appreciated by financial rewards. This will create a sense of
motivation to work more to earn more financial rewards. Employers use this tactic in order to
increase the production of the organization.
After discussing the Classical Management Theory, the following are the strengths of the
theory:-
- Promotes a clear organizational structure- like management and its function
operations
- Distribution of the work among the employees to make it easier to achieve.

- Clear segregation of employees roles and responsibilities
Flaws of the theory are:-
- In an attempt to control the human resource, this theory avoids the importance of the
human resource and creativity.
- This theory does not consider the employees’ satisfaction from the job. They are
almost treating the employees as machines.