Principles of Management

Principles are the basic truths generally stated in the form of cause effect relationship. Management principles are the broad guidelines for the managers for decision making.

Concept

Principles of management are derived on the basis of observation and experimentation studies. Principles of management establishes cause and effect relationship and serve as a guide to thought and action. For example, according to the principle of division of work, specialization is the result of division of work.  The cause (dividing the work) and effect (specialisation) can be clearly located.

Management principles are statements of fundamental truth, which provide guidelines for managerial decisions.

Nature of Principles of Management

  1. Universal: The management principles are applicable to all types of organisations like government enterprises, educational institutions, business enterprises, etc.

  2. Flexible: Management principles are modified and applied according to the changing situations. For example, when an organisation started its functioning, it may have adopted principle of centralisation. When the organisation became a large enterprise, it will apply principle of decentralization.

  3. Aimed to Influence Human Behaviour: Human behaviour is complex and unpredictable. Management principles influence human behaviour so that human resources give their best to an organisation. For example, principle of order is followed, so that wasteful movement of workers can be avoided.

  4. Cause and effect relationship: Management principles indicate clearly the cause of various actions and consequences of various decisions. For example, according to the principle of discipline, smooth running of business is the result of discipline.

Significance of Principles of Management

Management principles have considerable importance in all group efforts. Following are the points of importance of management principles.

  1. Act as a Guide for Research in Management: The principles so far developed can be tested in new situations and management practices can be made more effective. For example, in earlier days workers were motivated by their remuneration. But now a days family health, education of the children, etc. should be considered by the organisation in order to motivate and retain the workers.

  2. Improve Understanding: The knowledge of principles of management help the managers to manage an enterprise properly. The principles of management help the managers for taking correct decisions. Managers can handle situations smoothly.

  3. Identify the Areas for Training of Managers: The principles of management help in identifying the areas where the managers should be trained.

  4. Act as Reference for Managers: Principles act as reference for the managers and help to evaluate whether the decision taken by him are appropriate and accurate.

  5. Increases efficiency: Principles are guidelines for managers for taking accurate decisions. Principles help the manager for solving problems of an enterprise.