After reading this article you will learn about:- 1. Meaning of Management Principles 2. Nature of Management Principles 3. Significance 4. Universality.
Meaning of Management Principles:
Principle refers to fundamental truth about a concept that provides guide to action. Principles evolve in every field of knowledge — medicine, engineering, accountancy etc. Management principles tell about administration of business, that is, the way business should run. Principles of management help in evolving management theories. Principles serve as guide for management thought.
Management principles have evolved over years of experience and testing in organisations in both public and private sectors. They enable managers to perform their tasks effectively. Management principles are not absolute. As study of management is advancing, new principles emerge and old principles get discarded or modified.
Nature of Management Principles:
1. They are basic and not absolute:
Though management principles have evolved through experience and testing, they are not absolute in nature. The list of principles is not exhaustive though Fayol’s management principles are accepted as basic principles of management. New principles emerge with research in the field of management.
Management principles are practical in nature. They can be applied in almost every organisation, big or small, public or private. They are based on genuine observations of human behaviour and, therefore, apply in almost all situations at all levels in the organisation. This accounts for universality of management principles.
This view of universality of management principles does not hold good for organisations operating in different countries. Differences in social, cultural and economic backgrounds of different nations make it difficult for these principles to be universally applied.
Management principles are flexible in nature. As they are based more on experience than scientific testing, they are flexible and not exhaustive. They can be changed according to situations. Fayol also accepts this fact.
Though flexible in nature, they are consistent. It means they produce similar results in similar situations.
5. Cause and effect relationship:
Management is a behavioural science and management principles deal with human behaviour. Since human behaviour is unpredictable, these principles are not exact as pure science. Cause and effect relationship may or may not be established in application and end results of these principles.
Unity of command, for example, promotes obedience, efficiency and productivity but this principle does not hold good in functional organisations where multiple command system prevails, that is, one person is accountable to more than one boss.
Significance of Principles of Management:
Principles of management are significant because of the following reasons:
1. Simplification of managerial work:
Management principles make the work easy and simple. Managers perform complex managerial tasks on the basis of these principles and make sound business decisions. Actions in different situations are facilitated through management principles.
2. Development of management thought:
Management is a full fledged field of study. Management teachings on the basis of management principles develop management theories which become the basis to carry out the managerial functions effectively.
3. Managerial training:
Management as a discipline is taught to manage large-sized business houses. Teaching and training managers on the basis of sound management principles helps them perform effectively in all the functional areas (production, finance, personnel and sales).
4. Understanding human behaviour:
Management is a behavioural science. It deals with people and tasks performed by them. Management principles help to understand the human behaviour and ways to satisfy their needs (physiological and psychological). Need satisfaction leads to excellence in their behaviour, thus, contributing to organisational goals.
5. Improvement in organisational productivity:
Management principles help to solve organisational problems in a pre-defined manner. They guide actions appropriate to the situation. This results in efficient decisions and optimum utilisation of scarce organisational resources and increases productivity and profits.
6. Improvement in the study of management thought:
Management principles provide scope for research and improvement in the existing principles. This helps in expansion of knowledge in the field of management.
7. Social objective:
Besides attaining organisational goals, management principles also help to improve standards of society. Well managed organisations have satisfied workers whose needs (economic and non-economic) are largely satisfied in organisations. Such organisations and people working therein reflect better standards of society.
Also, since management takes inputs from the society and gives back outputs to the society, principles of management help in effective use of resources, better outputs and improvement in quality of life. The quality of management (through principles of management), thus, affects the quality of society.
Universality of Management Principles:
Different views are held on whether management principles are universal or not. There are both opponents and proponents to the thought that management principles are universal.
1. Arguments supporting universality of management principles:
The following arguments support that management principles are universal in nature:
(a) Pervasiveness of management functions:
Planning, organising, staffing, directing and controlling are performed in all business and non-business organisations. Managerial principles are universally performed by all managers at all levels in all organisations. There may be differences, however, in the intensity in application of principles depending upon the emphasis placed on different functions of management (planning, organising etc.) at a particular point of time.
(b) Management concepts:
Management concepts are different from management techniques. The principle of esprit de corps holds good in all organisations in all situations. How to achieve unity of actions in different situations is, however, different. Management principles are, thus, management concepts fundamentally or universally applicable in different organisations.
However, management techniques (for example, the style of leadership, medium of communication, the kind of motivators used etc.,) vary depending upon need of the situation. Participative style of management may be important in some cases and autocratic style may be important in others. Thus, the basic management principles remaining the same (management as science), the way these principles are applied differ in different situations across different countries and cultures. Management is an organised set of knowledge practiced differently under different conditions.
2. Arguments opposing universality of management principles:
This viewpoint supports that management principles are not universal in nature. They change according to need of the situation. These principles are culture specific and apply differently under different conditions in different cultures. There are no common principles that provide definite solution to similar management problems at same point of time for different organisations and also different points of time for the same organisation.
Even within the same culture, management principles differ for sub-cultures of that culture. Companies operating in rural areas adopt different principles than those operating in urban areas within the same country. The following arguments oppose universality of management principles.
(a) Nature of organisations:
Universality of management principles implies they can be applied in all organisations. However, the nature of business organisations differs from that of non-business organisations. Even in business organisations, management differs for profit and non-profit organisations. Management principles cannot, therefore, be universally applicable in all organisations.
(b) Nature of managers:
Applying management principles depends upon the nature of managers. Some managers regard unity of command and centralisation as effective means of management while others prefer functional authority and decentralisation as more effective means of management. Autocratic managers may consider organisational goals superior to individual goals while democratic managers synthesise organisational goals with individual goals. Universality of management is, therefore, subject to debate.
(c) Environmental factors:
All organisations are not affected by environmental factors in the same way. They respond to environmental changes in different ways and cannot, therefore, apply management principles universally.
(d) Cultural differences:
Different organisations operate in different cultures with differences in values, beliefs, perceptions and attitudes of people. Managers of these organisations operate differently and apply management principles differently.
Management is a behavioural science that deals with people and since people vary significantly in their habits, attitudes, cultural background and value systems, different management principles are effective in dealing with different types of people, even within the same country and same organisation.
Thus, though management principles have scientific validity, they cannot universally apply to organisations of different nature operating in different cultures with different responsiveness to external environment.
After analysing the arguments supporting and opposing the universality of management principles, one cannot totally accept one viewpoint and ignore the other. To an extent, one can think of universality of management principles as in the current global business environment, multinational companies are operating in different countries. They are drawing management knowledge from different countries, though they are practiced differently in different countries.
Managers in India go abroad to get training in management principles and managers abroad provide consultancy to Indian companies and vice versa. Though, however, management principles can be adopted from different countries, they cannot apply in all countries alike because of differences in environmental variables like economic, social, cultural, educational, technological and natural climate.
After adopting these principles, they have to be modified according to needs of the country. Thus, some management principles can be adopted totally. These principles do not deal with people and are impersonal in nature.
To that extent, one can talk of universality of management principles but principles that deal with interpersonal behaviour at work, that is, with people, have to be greatly modified according to cultural specifications of the environment at work. The management principles, thus, cannot be universally applicable.