Question

Explain by giving any five reason why Principles of Management are needed.

Answer 1

Management principles are essential for the successful running of business organisation. These principles are guidelines to management. They highlight the areas where the management should pay immediate attention. These principles simplify the process of management, increase the overall efficiency of management and help in the achievement of objectives.

The significance of management principles can be summarised as follows:

(i) Provide the manager with useful insight into reality Management principles act as guidelines for the managers. These principles improve knowledge, ability and understanding of managers under various managerial situations. The effects of these principles help the managers to learn from their mistakes.

(ii) Optimum utilisation of resources Several principles of management aim at optimum utilisation of all types of resources for the attainment of organisational goals, e.g. principles of division of work, discipline, unity of direction, order, etc facilitate better utilisation of human efforts and physical resources.

(iii) Scientific decisions The knowledge of management principles enables managers to learn the cause and effect relationship between variables operating in the organisation. They are able to develop a scientific and objective approach towards problem solving and decision-making.

(iv) Meeting changing environment requirements Every businessman has to cope up with the changes that are taking place in the business environment. Management principles train the managers to implement the changes in right direction and at right level in the organisation.

(v) Fulfilling social responsibility A manager is able to achieve efficiency and economy in the activities of his enterprise by applying management principles. These principles are aimed at maximising profits without loss of social value. In other words, management principles seek to ensure that the resources of the society are utilised fully and good quality products at fair prices are made available to society.