Principles of Management
Management is an art of getting things systematically done through others. There have been various theories given by scholars for management and one of which is Henry Fayol who gave principles of management. Principles of management are a set of guidelines that assist managers to conduct the management properly and effectively. These principles were derived for solving modern dilemma which begins because of mismanagement. In this article, I will explain to you those points.
Principles of Management
Given below are 14 principles of management given by Henry Fayol. These principles aim at each aspect of business management.
- Principle of Division of Work – According to this principle, the work is divided into different kinds such as technical, financial, commercial, security operations and accounting. It is assigned to employees as per their qualities and capabilities. It helps in improving the efficiency and expertise of employees which ultimately turns into expected productivity level.
- Principle of Authority and Responsibility – Authority is the right to make decisions. It is necessary to get the things done appropriately from subordinates. Authority always comes with responsibility. If the manager is given the authority to complete a task within a given time, he should be held responsible if he does not complete the work in a given time. The manager should have proper authorities to take the managerial decision on his own concerning the goal.
- Principle of Discipline – According to Fayol, discipline is the most essential thing in the organisation. The employee must obey and respect the rules that govern the organisation. Discipline helps to achieve the goals in the organisation. Good discipline is the result of effective leadership. There must be a clear understanding between the management and the workers regarding the organisation’s rules. Basic discipline should be observed at all levels of management.
- Principles of Unity of Command – Each member of the organisation should receive orders from only one superior. This principle helps in managing conflicts and solving disputes among people in the organisation. It also helps in avoiding confusion and will not be able to make decisions about whose orders should be followed. This is the wrong approach. For this organisation, the hierarchy should be well defined. Each employee should know his immediate superior and should receive orders from him only.
- Principle of Unity of Direction – This principle states that ‘there should be one head and one plan’ in every organisation. Each group in the organisation should have then the same objective and the group should be directed by one manager using a single plan.
- Principle of Subordination of Individual Interest to Organisation Interest – According to this principle the interest of an individual must be given less importance than the interest of the organisation. While deciding on the organisation the manager should always consider the interest of the whole group rather than the interest of a single employee. Similarly, the employee should protect the interest of the organisation first and his interest should be subordinated.
- Principle of Centralisation – Centralisation refers to the concentration of power and authorities. In some organisations, this power is vested in one hand or a few hands. This situation occurs in a small organisation. But, if the size of the organisation is large then there is a decentralisation of the power or authority. According to this principle, there must be a proper balance between centralisation and decentralisation in the organisation. This is to be done according to the size of the organisation, nature of the activity, etc.
- Principle of Remuneration – Appropriate remuneration to staff or employee is the principle to keep them satisfied financially as well as retain them for a long period within the organisation. The remuneration should be fixed by taking into consideration the skill, expertise, knowledge, tenure, cost of living, market trend, the profitability of an organisation, etc.
- Principle of Scalar Chain – Scalar chain means the hierarchy of authority from the top level to the lower for communication. This helps to ensure the orderly flow of information and communication. Traditionally, organisations used to frame a large scalar chain which is time-consuming. For avoiding this longer chain and to take speedy decisions to cross communication or direct communication is followed by various organisations which are known as Gang Plank. For direct communication, proper permission of the authorities is necessary.
- Principle of Order – This principle is based on ‘A place for everything and everything in its place’. Human resources and materials should be in the right place at the right time for maximum efficiency. Human resources should be placed in the right place and on the right job. The principle focuses on the proper utilisation of physical and human resources.
- Principle of Equity – Management should be fair as well as friendly to the subordinates. While dividing the work, delegating the authorities, deciding the monetary terms, etc. there should not be any discrimination between the employees. It is also suggested that the remuneration should not depend on the department but at the level on which subordinates are working. The employees working on the same level but in different departments should be paid the same wages. The equity will help in avoiding conflicts in the organisation.
- Principle of Stability of Tenure – At the time of recruitment of employees, the management should assure them about the stability of tenure or job security. It plays a very important role in creating a sense of belongingness among the employees. Insecurity in a job always affects the efficiency of employees adversely whereas job security minimizes employee turnover ratio.
- Principle of Initiative – Initiative refers to volunteering to do the work innovatively. The freedom to think and work on new ideas encourages employees to take initiative while working on a given task. This initiative should be welcomed by the manager including thorough discussion on those new ideas. It also helps in creating a healthy organisational culture.
- Principle of Esprit de corpse – Esprit de corps means the union is strength. Running any organisation is a group activity and human resources are the valuable asset of the organisation. If all employees are working as a union and with mutual trust, the difficulties can be solved quickly. Therefore, as a leader, the manager should create a spirit of teamwork and understanding among employees to achieve the organisational goal easily.
Nature of Principles of Management
- Universal application – The principles of management are universal. That means they can be applied to all types of organisations, irrespective of their size and nature. Their results may vary and applications may be modified but these are suitable for all kinds of organisations. Similarly, they apply to all levels of management.
- General guidelines – Management principles provide general guidelines in tackling the organisation situations wisely as well as in solving the problems. They are not rigid. Which management principles are to be applied depends upon the situation, size and nature of the organisation. For example, when we say fair remuneration, then the term ‘fair’ can vary as per the nature, size and financial condition of the organisation.
- Principles are formed by practice and experiments – The management principles are developed gradually with thorough research work. Systematic observations and experiments are conducted before developing them. The results of such experiments have been developed as a principle after it practices in organisations.
- Flexibility – Management principles are flexible. It means they can be changed or modified according to the situation. Managers can be flexible while implementing principles to suit the requirement. The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organisation according to its need.
- Behavioural in nature – Management is a group activity. Management aims at achieving a certain goal through a group of a human being. Management principles are designed to influence human beings. These principles control a group of persons and direct them to achieve the objectives.
- Cause and effect relationship – Principles of management are the base for taking decisions. They determine the cause or reason for a particular effect. For example, payment of good wages and incentives helps in increasing the output of workers or making effective advertisement increases the sale of a product.
- All principles are of equal importance – All principles of management are of equal importance. Those are to be practised simultaneously to get the best results in the form of achievement of predefined goals. If any specified principle is focused more and others are not followed with the same focus, then it affects the working of an organisation. Management principles are the principles of social; science. The nature of principles of management is not absolute like pure sciences i.e. Chemistry, Mathematics, etc. With some modifications according to requirement, the organisation needs to apply the principles of management.
Significance of Management Principles
- Provides useful insight to managers – The principles of management help the manager to understand the organisation. The study of the principles helps to improve the understanding of the situations and problems. It further helps the manager to find out the solutions to the problems and handle situations. Management principles are an outcome of the experience of various professional people. The use of these principles is helping managers about how he should act in different situations. This type of timely guidance reduces the wastage of resources and the goals can be achieved inappropriate manner.
- Helpful inefficient utilisation of resources – In every organisation two types of resources are used i.e. physical resources (material, machines, money, etc.) and human resources (manpower). The basic function of management is to make proper balance these resources by outing them to optimum use and control on wastage of resources. While maintaining discipline and a healthy working environment, management always uses techniques and principles. It helps in establishing a cordial relationship between management and employees which increases the efficiency level of employees and also affects the effective administration. For example, Use of standard tools and machinery helps in increasing quality or productivity as well as in increasing level of efficiency of human resources.
- Scientific decisions – In a business organisation, a specific decision means systematic or balanced decision. Principles train the managers to handle critical situations tactfully otherwise the managers have to work always with trial and error method. With the use of various management principles, one can get an idea about how to analyse the situations, to search alternative options and their results.
- Understanding social responsibility – Management principles are based on every aspect of an organisation. They are not developed only from a viewpoint of handling the resources effectively but they guide management in understanding the social responsibility of the organisation. So that they can focus on providing giving products at reasonable prices, avoiding artificial monopolistic situations in the market, fair competition, fair remuneration, change in environment, healthy working place, standard tools and machinery, etc.
- Encourages Research and Development (R&D) – Principles of Management are dynamic. Their nature goes on changing along with the changes in the business world. Over the years they have developed to suit the current need. It enables the managers to bring consistent improvement in them. Management adopts new trends at working place automatically. These guidelines help management to make the comparison of used principles with its expected outcome. This training helps in developing a scientific approach towards R&D of organisation.
- Helps to coordinate and control – Management principles are the guidelines for better coordination and control. It is very challenging to create coordination and cooperation among different employees working in different departments. It is also a difficult task for the manager to keep control on the performances of employees. Management principles offer suitable systems while establishing coordination and control.
- Develops an objective approach – With the help of various principles of management, once can develop an objective approach. Managers can identify the business opportunities, root causes of the problems in the correct manner and can provide appropriate solutions on it. It builds confidence in the minds of the managers.