An analysis of the dynamic behavior of polymeric liquid crystals is given in terms of a second‐rank order parameter tensor describing the orientational state of the local microstructure. The continuum equations governing the dynamics of the material are analyzed under both steady‐state and transient conditions for isotropic and liquid‐crystalline fluids subjected to shear and magnetic fields. Analysis reveals that a great variety of dynamic behavior for liquid‐crystalline materials can be accommodated within the framework of a continuum theory in terms of a second‐rank order parameter tensor, and that this dynamic behavior approximates well the orientational behavior obtained with the more complex distribution function theories. Under some conditions the associated rheological behavior of the continuum theory exhibits discrepancies in the normal stress behavior compared to rheological calculations based on the distribution function theory. For simultaneous application of shear and magnetic fields, both the direction and the strength of the magnetic field play a major role in determining the dynamic system response.