Principles of Management

What is Management?

Management is needed for an organised life and vital to maintaining all kinds of management. Sound management is the backbone of flourishing businesses. Managing life means getting everything done to accomplish life’s aspirations and maintaining an establishment means getting everything done with and by other people to deliver its objectives.

To put it in other words, the organization and coordination of the pursuits of an industry for the idea of accomplishing determined objectives efficiently and thoroughly are marked as management.

What are the Principles of Management?

The administrative principle is the great and overall direction for determining the performance. For instance, while ascertaining about the promotion of an employee 1 manager may contemplate seniority, whereas the other may follow the principle of quality.

One may define principles of management from those of pure science. Management principles are not as firm as postulates of pure science. They deal with human traits and, hence, are to be employed creatively given the requirements of the position. Human behaviour is never inactive and so also technology, which business. Therefore all the principles have to keep step with these changes. For instance,

  • In the absenteeism of Information and Communications Technology (ICT), a manager could manage only a small workforce that too within a restricted geographical area
  • The approach of ICT has developed the ability of the managers to control over large business domains scattered across the globe
  • In promoting an understanding of the application of principles of management, it is also helpful to comprehend what these are not
  • The principles of management should be selected from techniques of management. Techniques are methods or techniques, which include a group of steps to be taken to achieve sought goals
  • Principles are guidelines to make judgments or actions while studying techniques. Moreover, principles should also be comprehended as being different from values

Also Read: Find Business Studies Syllabus For Class 12

(1) DIVISION OF WORK

Meaning and Importance

  • Work is divided into small tasks/jobs.
  • A trained specialist who is competent is required to perform each job.
  • Thus, the division of work leads to specialisation.

    Example:

    Domino’s World’s Fastest Pizza Maker can make three large pizzas in just

    32.28 seconds — that’s less than 11 seconds per pie by dividing their different tasks among teammates. Different tasks performed by teammates which include:

  • The Delivery experts
  • The customer service representatives who handle orders
  • The person who makes pizza
  • The person who interacts with customers
  • The manager who runs the store.

(2) AUTHORITY AND RESPONSIBILITY

  • It is the right to command and exact obedience.
  • Responsibility means the obligation to perform a particular task
  • There must be an optimum balance between authority and responsibility.
  • Authority without responsibility may be misused and responsibility with inadequate power makes the work ineffective.

Example:

  • While negotiating a sales deal. Sales manager finds that giving credit period of 60 days would clinch the deal whereas he has been authorised to allow credit of 40 days. Here, there is an imbalance between authority and responsibility which may fetch huge profiles to the company.
  • The decisions related to determining the objectives and policies, expansion of business, etc. should remain in the hands of the superiors. This is due to the fact that decisions taken by the superiors affect many employees and have a long term impact on the organisation. On the other hand, authority for the purchase of raw material, granting leaves to the employees, etc. should be delegated to the subordinates. This is because they are near the point of action and can decide things better and practically.

(3) DISCIPLINE

(a) MEANING AND IMPORTANCE

  • Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation.
  • According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

(b) HOW TO MAINTAIN DISCIPLINE?

  • ORGANIZATIONAL RULES – Well defined and Clearly Explained
  • EFFECTIVE MANAGEMENT – At all the levels.
  • REWARDS – On proper obedience of rules and regulations.
  • PENALTY – In case of non-obedience.

(c) EXAMPLE

In McDonald’s, there are clear instructions regarding discipline to be maintained in the organization. Employees are rewarded and recognized for following the rules and regulations and are penalized for non-fulfilment of discipline

(4) ORDER

(a) MEANING AND IMPORTANCE

  • In this principle, Order does not mean any command rather it means ‘Keeping Everything in Proper Place and condition’.
  • It is a systematic arrangement of human and physical resources.
  • There should be a fixed place for everything to facilitate smooth working and avoid wastage of resources.
  • If an order is maintained for each and every resource then there will be no confusion and delay in working.

(b) KINDS OF ORDER

Material Order

  • According to this, there should be a proper place for all physical resources.

Social Order

  • According to this, there should be a proper place for all human resources as per their designations.

(c) EXAMPLES

(i) If a worker needs some tool, he must know the place where he can find it; otherwise, he will waste his time in its search.

(ii) If a Worker wants to meet any superior/ co-worker/ subordinates in the organization then that person should have a designated place where he can find and meet him.

(5) UNITY OF COMMAND

(a) MEANING AND IMPORTANCE

  • Unity of Command means one individual employee should receive orders and instructions from one individual superior only.
  • Multiple commands create dissatisfaction and frustration among honest employees and inefficient ones find ways to escape from their responsibilities.
  • Employees should be answerable only to one superior.
  • If violated, the authority is undermined, discipline is jeopardized, the order is disturbed and stability is threatened.
  • However, the most obvious outcome of this principle is ‘Dual Subordination’.

(b) EXAMPLE

If the employees of the production department are asked to go slow in production to maintain a quality standard by the production in-charge and sales in-charge instructs the employees to increase the production to meet the pending orders. In this situation, employees will get confused and this would result in ineffective work. Here, both production in-charge and sales in-charge must coordinate on the production.

(6) UNITY OF DIRECTION

(a) MEANING AND IMPORTANCE

  • It means everyone in the organisation should move with the direction of organizational objectives through coordinated and focused efforts.
  • Each group of activities should have the same objectives and must have one head and all should follow one plan.
  • If there is a change in plan that should be communicated to every concerned employee so that unity of direction is ensured.

(b) EXAMPLE

If an organisation is producing different lines of products – cosmetics, medicines and confectionery items each product must have its own division. Every should have a respective divisional head, own goals, objectives, resources, and market.

(7) REMUNERATION

(a) MEANING AND IMPORTANCE

  • Remuneration is salary to employees and in case of workers, it is wages.
  • It should be just, rational and should satisfy the employees.
  • This will create loyalty in the minds of employees and will increase productivity.

(b) EXAMPLE

The remuneration of company A should be equal for all employees. However, it varies due to the following conditions:

  • Industry standards
  • Employer’s paying capacity
  • Employees contribution

(8) EQUITY

(a) MEANING AND IMPORTANCE

  • It means equality.
  • This principle emphasizes the kind, just, equitable behaviour of managers towards workers.
  • There should be no discrimination on the basis of gender, caste, religion, language, beliefs or nationality.

(b) EXAMPLE

A labourer completes 10 units in a day. Another labourer who happens to be relative of the supervisor completes 8 units but both get equal remuneration. This violates the principle of equity. The second labourer should get less remuneration than the first one.

Q.1- WHAT IS PRINCIPLE OF MANAGEMENT? WHAT IS THE DIFFERENCE BETWEEN VALUE AND PRINCIPLES OF MANAGEMENT?

ANSWER:

Principles of management are broad and general guidelines for decision making and behavior.

FOLLOWING ARE THE POINT OF DIFFERENCE BETWEEN VALUE AND PRINCIPLE OF MANAGEMENT:

BASIS

VALUES

PRINCIPLES OF MANAGEMENT

(a) DEFINITION

Values are acceptable or desirable in society. They touch the moral aspects of life.

Principles of management are broad and general guidelines for decision making and behaviour.

(b) EXAMPLE

Honesty, Sincerity etc.

Division of work, discipline etc.

(c) NATURE

Developed in society.

Developed and applied in business.

(d) STATUS

General rules for behaviour.

Basic truths or guidelines.

(e) FORMATION

Formed through common practice

Formed after research at the workplace.

Q.2-WHAT IS THE DIFFERENCE BETWEEN PRINCIPLES OF SCIENCE AND PRINCIPLES OF MANAGEMENT?

ANSWER:

BASIS

PRINCIPLES OF SCIENCE

PRINCIPLES OF MANAGEMENT

(a) DEFINITION

These are uniform laws of science which are applicable throughout the universe.

Principles of management are broad and general guidelines for decision making and behaviour.

(b) EXAMPLE

Newton’s law of motion etc.

Principle of Fayol and Taylor etc.

(c) NATURE

Rigid.

Flexible.

(D) APPLICATION

Modified and creative.

Unchanged and produce the same result.

Q.3-WHAT IS THE DIFFERENCE BETWEEN TECHNIQUES OF MANAGEMENT AND PRINCIPLES OF MANAGEMENT?

ANSWER:

BASIS

TECHNIQUES OF MANAGEMENT

PRINCIPLES OF MANAGEMENT

(a) DEFINITION

Techniques are procedures or methods, which involve a series of steps to be taken to accomplish the desired goals.

Principles of management are broad and general guidelines for decision-making behaviour.

(b) EXAMPLE

The technique of loading iron onto a vehicle.

Principle of Fayol and Taylor.

(c) NATURE

Chronological.

Flexible, broad and general.

(d) APPLICATION

Specific- They can be applied only to a specific situation.

General- They can be applied to different situations.

5-6 MARKS QUESTIONS

Q.1 STATE THE NATURE OF PRINCIPLES OF MANAGEMENT.

ANSWER:

FEATURES OF PRINCIPLES OF MANAGEMENT :

(1) GENERAL GUIDELINES

  • The principles of management are just for a prescription.
  • They do not provide any readymade solutions to all sorts of problems being faced by the organisations.
  • These can be modified as per the nature of the situation and human behaviour.

Example:

During the period of recession, the general manager may allow marketing departments to give a heavy discount to the customers without giving due attention to financial losses being raised by the financing department because the primacy of overall goals of the organisation is important.

(2) UNIVERSAL VALIDITY

  • Principles of management can be applied to any kind of organisation whether it is private or government, not for profit organisation, small, medium, large organisation etc.
  • But their applicability depends upon nature, size of the organisation and different situations.

Example:

The whole work of an organisation is divided into smaller tasks and such tasks are assigned to different departments, groups and individuals. Such a system of division of work is applicable in all types of organisations.

(3) FORMED BY PRACTICE AND EXPERIMENTATION

  • The principles of management have been formed by experience and acquired the wisdom of managers over the years.

Example:

Through collective practice, we can see that Fayol’s Principle-Discipline helps in increasing productivity.

Taylor’s Principle-Science, Not Rule of Thumb, brings out uniformity and standardization in the manufacturing process of a company. ( we can give the same example which we have given in the case study because at this stage Fayol’s principle and Taylor principle are not yet discussed)

(4) CONTINGENT

  • As the application of principles of management depends upon prevailing situations and needs, so their results may not be uniform as expected.

Example:

  • Remuneration of employees should be just and equitable yet it may vary from person to person depending upon various situations.
  • Remuneration can be dependent on:
  • Industrial standard.
  • Employer’s paying capacity.
  • Contribution of employee etc.,

(5) FLEXIBLE

  • The principles of management are general prescriptions not rigid.
  • The managers can make certain changes as per the convenience and requirement of a situation.

Example:

Application of the principle of centralisation or decentralisation i.e. concentration or dispersal of authority to be delegated to employees depends upon the need, ability and competency of the employees. It also depends upon the nature of the organisation.

(6) BASED ON CAUSE AND EFFECT

  • The principles of management are intended to establish cause and effect relationship so that the findings can be applied to such given situations frequently.
  • The principles of management tell the likely effect if a certain principle is applied.
  • The effect of such principles remains more or less the same due to their application on human behaviour.

Example:

By applying the principle of subordination of individual interest to the general interest, the behaviour of employees may be influenced in such a way that the personal goals of employees may be directed towards goals of the organisation.

(7) MAINLY BEHAVIORAL

  • The principles of management aim at influencing the behaviour of employees.
  • With the help of principles of management, the managers try to bring desired changes in the behaviour of employees so as to achieve the organisational goals.

Example:

Orderliness decides behaviour among human beings in a company. Even the behaviour between men and machine can be decided by this principle of Management.

5-6 MARKS QUESTIONS

Q.1 EXPLAIN ANY FOUR REASONS AS TO WHY PROPER UNDERSTANDING OF MANAGEMENT’S PRINCIPLES IS NECESSARY.

ANSWER:

IMPORTANCE OF UNDERSTANDING PRINCIPLES OF MANAGEMENT:

(1) PROVIDING MANAGERS WITH USEFUL INSIGHTS INTO REALITY

  • The application of principles of management helps the managers to take right decisions at the right time.
  • These principles of management help managers to tackle the diverse problems in a dynamic business environment.

(2) OPTIMUM UTILIZATION OF RESOURCES & EFFECTIVE ADMINISTRATION

  • Resources are always scarce and limited.
  • By applying the management principles, the managers can focus on optimum use of available resources so as to achieve productive results at minimum cost and maximum profits.
  • It results in effective administration by channelizing resources (human and material) into the best possible way.

(3) SCIENTIFIC DECISIONS

  • Application of principles of management makes the manager more realistic, thoughtful, justifiable and free from personal bias.
  • The decisions taken on the basis of principles of management are subject to evaluation and objective assessment.

(4) MEETING CHANGING BUSINESS ENVIRONMENT

  • Although the principles are in the nature of general guidelines they are modified and help managers to meet the changing requirements of the environment.

Example:

With the rapid rise of online market sellers, offline vendors have also started selling their goods on online platforms.

(5) FULFILLING SOCIAL RESPONSIBILITY

  • Principles of management not only help in achieving the goals of the organisation effectively and efficiently but they also guide the managers to fulfil their commitment towards its employees and society.

Example:

Principles of fair remuneration and equity ensure social justice to employees and compliance with government norms towards corporate social responsibility which improves the company’s image in the society.

(6) MANAGEMENT TRAINING, EDUCATION AND RESEARCH

  • Proper understanding of principles is the base of training, research and development in the field of management.
  • Management is taught on the basis of these principles which help the management institutes prepare future managers.
  • These Principles help managers to take decisions and actions in the right manner.
  • Application of these principles by the managers brings innovation in the field of management.

Example:

It is the result of such training, education and research that Sunil Mittal could run Airtel in a successful way.

Also Read: Find Business Studies Syllabus For Class 12

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