Significance of Principles of Management

Principles of management are not merely academic statements — they carry real, practical value for anyone who actually has to manage people and resources. The significance of studying and applying them can be explained under the following heads.

1. Providing managers with useful insight into management. Principles of management equip a manager with a ready body of tested knowledge — the accumulated experience of countless earlier managers and organisations — so that a manager does not have to rediscover, by painful trial and error, lessons that are already well understood. This gives a manager real insight into the probable results of a given course of action before it is taken.

2. Optimum utilisation of resources and effective administration. By guiding a manager toward the most efficient use of an organisation's men, money, material, machinery and methods, principles of management help an organisation achieve the maximum possible output from a given level of input, avoiding waste and duplication of effort.

3. Scientific decisions. Decisions that are grounded in established principles of management, tested facts, and careful analysis are far more likely to be correct, timely, and balanced in the interest of the organisation than decisions made purely on a manager's personal whim, guesswork, or untested opinion.

4. Meeting the requirements of a changing environment. Although principles of management are general guidelines, they are flexible enough to be reinterpreted and adapted to keep an organisation responsive to a continuously changing external environment — new technologies, new competitors, new government regulations, and shifting customer expectations — so the organisation is not caught unprepared.

5. Fulfilling social responsibility. Modern principles of management explicitly recognise that an organisation exists within, and owes obligations to, the wider society — its employees, customers, suppliers, and the community at large — and they help a manager balance the pursuit of profit with the organisation's fair treatment of all of these stakeholders. …