Essential Principles of Management (7 Principles)

Seven essential principles of management are: 1. Universal Applicability 2. General Guidelines 3. Formed by Practice and Experimentation 4. Flexible 5. Mainly Behavioural 6. Cause and Effect Relationship 7. Contingent!

Managerial principles are the guideline to for decision making and action.

They help the managers in performing their functions viz. planning, organizing, staffing, directing and controlling, efficiently.

Let’s now understand their nature in detail:

1. Universal Applicability:

The principles of management are applicable to all types of organization and at all levels of management, be it a business organisation or government organisation or domestic household. Thus, they are universal in nature but their use depends upon the situation, size of operation, nature of activity etc.

For example, the principle of centralization and decentralization is applicable to all types of organisations, but how much authority should be given to the subordinates depends upon the size and nature of business activity of that organization.

2. General Guidelines:

Management principles act only as guideline for decision making and action. They don’t provide direct or readymade solutions to a managerial problem. For example, in dealing with a situation of conflict between two departments, while one manager may give due importance to organisational goals, another manager may handle it entirely differently.

3. Formed by Practice and Experimentation:

The Principles of management have been developed through experience and wisdom of managers as well as experimentation. These are not developed overnight but are the result of deep experiences of leaders of management.

Similarly, in order to solve the problem of fatigue among factory workers, an experiment should be conducted to see the effect of providing them with rest to reduce stress. Such experimentation, wherever necessary, has also contributed to formulation of these principles.

4. Flexible:

The principles of management are flexible i.e. they can be modified by the managers according to the given situation. For example, a salesman has to carry out his work according to the instructions from of Sales Manager (Principle of unity of command) but if need be, he may receive orders from the Product Manager also. Hence, these are flexible guides whose application depends on the physical factors, social factors and economic factors of an organization, as well as on the demands of a given situation.

For example, while applying principle of centralization and decentralization, decision regarding extent of centralization depends on the competency and efficiency of the employees.

5. Mainly Behavioural:

Principles of management are mainly behavioural in nature since they are devised to influence human behaviour. However, this doesn’t mean that management principles do not pertain to physical resources. Managerial principles enable a better understanding of the relationship between human and physical resources to achieve organisational goals.

For example, while planning the layout of a factory, principle of order would be required to ensure proper flow of materials and movement of employees leading to smooth functioning and achievement of objectives.

Human behaviour is complex and also unpredictable. Each individual has a uniqueness based on his ego, beliefs, culture, ability etc. In view of this, management principles cannot be applied in all the organizations blindly. They are bound to be modified from one enterprise to another. Hence, they have limited application.

For example, principle of esprit de corps cannot be applied where individual contribution is required as in case of artistic work.

6. Cause and Effect Relationship:

The principles of management establish a relationship between cause and effect as they tell us as to what would be the result if a particular principle is applied in a given situation. However, accurate cause and effect relationship cannot be established as these principles are mainly applicable to human behaviour only that obviously varies from one person to another.

For example, according to the principle of division of work, the work is divided among the employees/workers according to their capability, which will lead to specialisation. So here, ‘division of work’ is cause & ‘specialisation’ is effect. But the principle can’t tell us about the extent of specialization which is likely to be different among the workforce.

7. Contingent:

The use of principles of management is contingent or dependent upon the prevailing condition at a particular point of time. For example, as per the principle of remuneration, fair and just wages should be given to the workers.

But what is fair and just wages is dependent upon various factors such as paying capacity of the employer, demand of the employees, nature of job, responsibilities attached with that job etc. So, management principles are not absolute. These cannot be applied blindly in all the situations and in all organizations equally.

Principles of management have to be applied keeping in view the prevailing situation. These require room for modification as same principle may produce different results in different situations. The principle of division of work cannot be applied where individual contribution is required as in the case of art work.