Business Studies · Ch 2 — Principles of Management
Principles of Management: The Concept
Principles of Management: The Concept
The Concept of Principles of Management
A managerial principle is a broad and general guideline for decision-making and behaviour. It is not a rigid rule but a flexible guide that helps managers think and act in different situations. For instance, when deciding whom to promote, one manager might base the decision on seniority, while another might follow the principle of merit. Both are applying a principle, but the choice depends on the organisation’s values and the specific context.
Principles of management differ fundamentally from principles of pure science. Scientific principles are exact, universal, and can be tested under controlled conditions. Management principles, by contrast, deal with human behaviour, which is complex, dynamic, and unpredictable. They cannot be applied mechanically; they must be adapted creatively to the demands of each situation. Human behaviour is never static, and neither is technology, which constantly reshapes business. Therefore, management principles must evolve with changing times.
Consider the impact of Information and Communications Technology (ICT). In the past, a manager could oversee only a small workforce within a narrow geographical area. Today, ICT has expanded that capability enormously. Managers can now preside over large business empires spread across the globe. Infosys headquarters in Bangalore, for example, has Asia’s largest flat screen in its conference room, allowing managers to interact with employees and customers worldwide. This illustrates how a principle — such as the span of management — must be reinterpreted as technology changes.
Management principles are not rigid laws. They are flexible guidelines that must be applied with judgement, keeping in mind the human and technological context.
What Principles Are Not
To understand principles of management clearly, it is equally important to know what they are not. They should be distinguished from two other concepts: techniques and values.
Principles vs. Techniques
Techniques are procedures or methods that involve a series of steps to accomplish a desired goal. They are the “how-to” part of management. Principles, on the other hand, are the guidelines that inform which technique to use and how to apply it. For example, the principle of division of work tells you that specialisation improves efficiency. The technique of job rotation or work specialisation is the practical method used to implement that principle. Principles guide decisions; techniques execute them.
Principles vs. Values …
Toyota follows certain well-defined business principles guiding its functioning. These are:
- Honour the language and spirit of law of every nation and undertake open and fair corporate activities to be a good corporate citizen around the world.
- Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in local communities.
- To provide clean and safe products and to enhance the quality of life everywhere.
- Create and develop advanced technologies and provide outstanding products and services that fulfil the needs of customers worldwide.
- Foster a corporate culture that enhances individual creativity and teamwork value, while honouring mutual trust and respect between management and labour.
- Pursue growth and harmony with the global community through innovative management.
- Work with business partners in research and creativity to achieve stable, long-term growth and mutual benefits, and be open to new partnerships.
These principles guide the company in its global vision — a vision that envisages continuous innovation, the use of environment-friendly technologies, respecting and working with different sections of society, and establishing an interactive relationship with society.
Source: Toyota Motor Corporation — Guiding Principles. …
In tracing the history of management, one comes across various schools of thought that have outlined principles to guide management practices. These schools of thought may be divided into 6 distinctive phases: 1. Early Perspectives; 2. Classical Management Theory; 3. Neo Classical Theory — Human Relations Approach; 4. Behavioural Science Approach — Organisational Humanism; 5. Management Science/Operational Research; 6. Modern Management.
Early Perspectives: The first known management ideas were recorded in 3000–4000 B.C. One Pyramid built by Egyptian ruler Cheops required work to be done by 100,000 men for over twenty years in 2900 B.C. It covered 13 acres of land and measured 481 metres in height. The stone slabs had to be moved thousands of kilometres of distance. As folklore goes, even the sound of a hammer was not heard in the villages in the vicinity of the site of these pyramids. Such monumental work could not be completed without adherence to principles of sound management.
Classical Management Theory: Rational economic view, scientific management, administrative principles, and bureaucratic organisation characterise this phase. While the rational economic view assumed that people are motivated by economic gains primarily; scientific management of F.W. Taylor and others emphasised one best way of production etc; administrative theorists personified by Henri Fayol etc looked at the best way to combine jobs and people into an efficient organisation; bureaucratic organisation theorists led by Max Weber looked at ways to eliminate managerial inconsistencies due to abuse of power which contributed to ineffectiveness. This was the era of the industrial revolution and factory system of production. Large scale production would not have been possible without adherence to the principles governing organising production based on division of labour and specialisation, relationship between man and the machine, managing people and so on.
Neo Classical Theory — Human Relations Approach: This school of thought developed between the 1920s to 1950s felt that employees simply do not respond rationally to rules, chains of authority and economic incentives alone but are also guided by social needs, drives and attitudes. Hawthorne Studies at GEC etc., were conducted then. It was quite natural that in the early phases of the industrial revolution, the emphasis was on development of techniques and technology. The attention to the human factor was the salient aspect of this school of thought. This attention was to serve as a precursor to the development of behavioural sciences.
Behavioural Science Approach — Organisational Humanism: Organisational behaviourists like Chris Argyris, Douglas McGregor, Abraham Maslow and Fredrick Herzberg used the knowledge of psychology, sociology and anthropology to develop this approach. The underlying philosophy of organisational humanism is that individuals need to use all of their capacities and creative skills at work as well as at home.
Management Science/Operational Research: It emphasises research on operations and use of quantitative techniques to aid managers to take decisions. …