Principles of Management: Importance

Management Principles are the essential, underlying factors that form the foundations of successful management. According to Henri Fayol in his book General and Industrial Management in 1916 there are 14 ‘Principles of Management’.

  1. Division of Work: According to this principle the whole work is divided into small tasks. The specialization of the workforce according to the skills of a person, creating specific personal and professional development within the labour force and therefore increasing productivity; leads to specialization which increases the efficiency of labour.
  2. Authority and Responsibility: This is the issue of commands followed by responsibility for their consequences. Authority means the right of a superior to give enhance order to his subordinates; responsibility means obligation for performance.
  3. Discipline: It is obedience, proper conduct in relation to others, respect of authority, etc. It is essential for the smooth functioning of all organizations.
  4. Unity of Command: This principle states that each subordinate should receive orders and be accountable to one and only one superior. If an employee receives orders from more than one superior, it is likely to create confusion and conflict.
  5. Unity of Direction: Teams, which have the same goal, should work under one manager’s direction. They should use one plan. This will guarantee that the action is coordinated properly. Unity of direction means the entire firm will move in the same direction.
  6. Subordination of Individual Interest to Mutual Interest: The management must put aside personal considerations and put company objectives firstly. Therefore the interests of goals of the organization must prevail over the personal interests of individuals.
  7. Remuneration: Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity. The quantum and methods of remuneration payable should be fair, reasonable and rewarding of effort.
  8. The Degree of Centralization: The amount of power wielded with the central management depends on company size. Centralization implies the concentration of decision making authority at the top management.
  9. Order: Social order ensures the fluid operation of a company through authoritative procedure. Material order ensures safety and efficiency in the workplace. Order should be acceptable and under the rules of the company.
  10. Equity: Employees must be treated kindly, and justice must be enacted to ensure a just workplace. Managers should be fair and impartial when dealing with employees, giving equal attention towards all employees.
  11. Stability of Tenure of Personnel: Stability of tenure of personnel is a principle stating that in order for an organization to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organization.
  12. Initiative: Employees should have the necessary level of freedom they need to make and conduct plans. Management should encourage worker initiative.  New or extra work activity undertaken through self-direction is an example.
  13. Team Spirit: This refers to the need of managers to ensure and develop morale in the workplace; individually and communally. Team spirit helps develop an atmosphere of mutual trust and understanding. Team spirit helps to finish the task on time and easily.

Importance of Management Principles

  • Improves Understanding: From the knowledge of principles managers get indication on how to manage an organization. The principles enable managers to decide what should be done to accomplish given tasks and to handle situations which may arise in management.
  • Direction for Training of Managers: Principles of management provide understanding of management process what managers would do to accomplish what. Thus, these are helpful in identifying the areas of management in which existing & future managers should be trained.
  • Guide to Research in Management: The principles guide managers in decision making and action. The researchers can examine whether the guidelines are useful or not. Anything which makes management research more exact & pointed will help improve management practice.
  • Optimum Utilization of Resources: The management principles insist on planned activities and systematic organisation of men and materials in the organisation. Principles are designed to get maximum benefits from the human efforts and other resources.
  • Fulfilling Social responsibilities: Management principles not only act as guidelines for achieving organisational objectives but these principles also guide the managers to perform social responsibilities.
  • Effective Administration: The management principles act as guidelines and base to form various administrative policies to have systematic working in the organisation. Management principles make administration more effective by discouraging personal prejudices and biases.