Nature and Significance of Management

Before we proceed to understand Principles of Management, let us brush up our knowledge about management concepts. Management, in simplest terms, involves processes related to planning, organising, making decisions, motivating and leading human resources in an organisation. 

Management also covers controlling of information, physical and financial resources in a company with an objective to reach its goals. 

The present article attempts to discuss basic principles of management along with their significance. 

What are Principles of Management?

Principles of management encompasses activities connected with organising, planning and controlling of basic aspects or an organisation, like materials, people, methods, machines as well as financial resources. 

It engages in coordinating and directing human efforts with a common objective of meeting established goals. 

Nature and Principles of Management 

The nature of principles of management is elaborated below.  

  • Universal Application 

These principles have universal nature due to which these are applicable for all kinds and sizes of organisations. However, the method of application for these principles can be modified, and outcome may vary. For instance, specialisation degree will vary across an organisation, but the principle of labour division remains the same. 

  • Experiments and Practice 

The development of management principles involves trial and error and extensive research. It includes experiments and observations before these principles are developed. Hence, management principles are understood to be evolutionary.

  • General Guidelines 

These principles have to be applied in an organisation while keeping in mind nature, size and objectives of that firm. Management principles are not absolute statements in themselves and cannot be implemented rigidly. It provides broad guidelines to resolute issues that may arise in the course of operations.

For instance, the salary amount that an employee receives is dependent on a host of factors, but the fair remuneration principle applies to all organisations.

  • Flexibility 

Management principles are flexible enough to be applied in different situations. Based on the requirements of an organisation, the principles may be modified by administrators. It is this absence of rigidity that makes management principles effective.

For instance, concentration of power is indicated at the apex level in an organisation by centralisation principle. However, the degree and extent of it will have to consider the nature of the organisation as well. 

  • Behavioural Aspect 

The management principles influence employee behaviour and have a strong bearing on interactions happening within an organisation across different levels of hierarchy. It helps in improving relationships among the members of an organisation.

For instance, even though principle of discipline mandates a certain degree of commitment of employees extended towards a company, Esprit de Corps principle leads to building of team spirit. 

  • Contingency 

Application of management principles is dependent on contingent for existing situations in a company. The effect and application of such principles will also have to consider the function, requirement and nature of an organisation. Application will have to be tailored accordingly. 

  • Cause and Effect Relationship 

The establishment of management principles takes into account causal relationships with respect to stock situations. It means that if those principles are applied in a particular scenario, a general effect may be assumed. However, one cannot anticipate the exact result borne out from applying management principles. 

Significance of Principles of Management 

The significance of Principles of Management is twofold. 

Firstly, adoption of management principles equips managers to handle numerous situations. They will have the necessary understanding of practical situations. With proper policy implementation, managers may enhance their managerial capabilities. 

Secondly, implementing management principles also helps in optimally utilising resources which is likely to lead to efficient management. Human resources, as well as other material resources, are available in a limited manner with an organisation. Hence, to minimise cost and maximise profit, resources should be effectively utilised. Management principles enable managers for influencing and predicting the outcome of activities and choices. 

Importance of Principles of Management 

The very nature of principles of management contributes to its importance. 

  • Scientific Nature of Decision-Making 

Adoption of management principles equips managers to take objective decisions with more realistic considerations that are bias free. Such decisions may be subsequently subjected to objective evaluation.

  • Adhering to Social Responsibility 

Managers are able to observe their commitment not only towards their subordinates but also the society at large. Organisational goals are also achieved efficiently. It can be understood in the context of fair remuneration principle. An organisation becomes not only compliant to government regulations but also ensures social justice for its members.

  • Adapting to Ever-Changing Business Environment

Due to the dynamic nature of management principles, the broad guidelines are subject to modification consistent with changes in the business environment. With such modification, an organisation may continue to retain its efficiency.

  • Training and Development 

The principles will have to be clearly understood to initiate proper training and development. Managers need to undergo training programs in order to stay updated with due knowledge and expertise. It will help them to engage in proper decision-making and carrying out of their duties responsibly. 

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FAQ (Frequently Asked Questions)

1. Explain the Nature of Principles of Management. 

Ans. The primary nature of principles of management is its universal declarations. It only holds in an instance of appropriate circumstances. The principles are also backed by trial and error as well as practice. 

2. Explain Nature with Examples.

Ans. Examples of nature with universal relevance manifests in a division of organisation into various departments, each with a certain set of duties. Examples of trial and error can be seen in standardisation of different processes of a company. 

3. What is the Significance of Principles of Management? 

Ans. The significance of principles of management includes equipping managers with adequate insights for handling the responsibilities entrusted to them. It also covers efficient utilisation of resources that further helps in management.