Principles of Management, Derivation of Management Principles, Nature of Principle of Management, Significance of Principle of Management

1. Principles of Management
Principles of Management: - Management principles arefundamental truth of
general validity which has value in predicting the results of management
action.
Derivationof Management Principles
 ObservationMethod: - Under this method, practical events are
observed and analysed by managerial researchers to derive
management principles.
 Experimental Method: - Under this method, experiments are conducted
so that management principles
Nature of Principle of Management
1. Universal Applicability: - Theprinciples management are applicable to
all types of organisation and at all levels of management, is it a business
organisation or government organisation or domestic household.
2. General Guideline: - Managementprinciples act only as guideline fir
decision making and action. They don’tprovide direct or readymade
solutions to a managerial problem.
3. Formedby Practice and Experimentation: - The principles of
management have been developed through experience and wisdom of
managers as well as experimentation.
4. Flexible: - Theprinciples of management are flexible i.e. they can be
modified by the managers according to the given situation.
5. Mainly Behavioural: - Principle of management is mainly behaviouralin
nature since they are devised to influence human behaviour. However,
this doesn’tmean that management principles do not pertain to physical
resources.
6. Cause and Effect Relationship: - The principles of management establish
a relationship between cause and effect as they tell us as to whatwould
be the result if a particular principle is applied in a given situation.
7. Contingent: - The use of principles of management is contingent or
dependent upon the prevailing condition at a particular point of time.

2. Significance of Principle of Management
1. Providing Managers withUseful Insights intoReality: - Principles of
management help in increasing managerial efficiency by adding to their
knowledgeand ability to understand the various situations
2. OptimumUtilisationof Resources andeffectiveAdministration: -
Resources, both human and physical, available in an organisation are
very limited, thus these resources should be used fully in such a manner
as its gives maximum benefits with minimum cost.
3. Scientific Decisions: - An effective decision mustbe based on facts,
thoughtful and justifiable in terms of the required purpose. Decision
must be timely and realistic. Principle of management help the
managers in taking decision based on the objective assessmentof the
situation free of any bias and prejudice.
4. Meeting Changing Environment Requirements: - As the principles can
be modified, thus, they help the managers to meet the changing
environmentrequirements. For example, most of the big giants are now
outsourcing someof their operation through ‘Business Processing
Outsourcing’ (BPO) and KnowledgeProcessing OutSourcing’ (KPO)
5. Fulfilling Social Responsibility: - Every business has to fulfil many social
responsibilities. Thus, principles of management and management’s
theory have been devised in such a way that they help in fulfilling these
responsibilities. However, over a period of time, these principles have
assumed new and contemporary meaning.
6. Management Training, educationand Research: - Principles of
management are the central point of management theory. So they are
used as a basis for management training, education and research. These
principles arean integral and important partof the curriculum of various
management courses at bachelor level such as BBA and MBA.