The principles of management derive their significance from their utility. They provide useful insights into managerial behavior and influence managerial practices. Managers may apply these principles to fulfill their tasks and responsibilities. Principles guide managers in making and implementing decisions. The significance of principles of management can be discussed in terms of the following points:
- Providing managers with useful insights into reality:
The principles of management provide the managers with useful insights into real-world situations. Management principles cooperate a key role in providing insights to assist in competent decision making. Adherence to these principles will add to their knowledge, ability, and understanding of managerial situations and circumstances. This principle adds to their knowledge and capability to deal with various situations and also helps in handling recurring contemplated problems. Thus it plays a role in increasing administrative effectiveness.
For example, a manager can leave routine decision-making to his subordinates and deal with exceptional situations which require her/his expertise by following the principles of delegation.
- Optimum utilization of resources and effective administration:
Resources both human and material available with the company are limited. A management principle helps in ensuring optimal usage by laying down broad frameworks on how to use these resources and how not to. They have to be put to optimum use. This, when applied in appropriate situations, can make for proficient resource decisions.
By optimum use, we mean that the resources should be put to use in such a manner that they should give maximum benefit with minimum cost. These principles are also appropriate to resource assortment or organization, so as to avert improvident accretion of scarce resources.
- Scientific decisions:
Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. It is scientific in the sense that it is made with due regard to judgment, cause, and facts and it is rational. They must be timely, realistic and subject to measurement and evaluation. Management principles help in thoughtful decision-making. Rational decisions always ensure competence within a business and help in its accomplishment.
- Meeting changing environment requirements:
Different management principles are contemplated in dissimilar situations. Although the principles are in the nature of general guidelines they are modified and as such help managers to meet changing requirements of the environment. So when a circumstances change, a diverse management principle suitable to the new condition thereby allows adapting to changes. For example, management principles emphasize the division of work and specialization.
- Fulfilling social responsibility:
The increased awareness of the public forces businesses especially limited companies to fulfill their social responsibilities. Businesses being social entities have social responsibilities for the benefits they obtain from society. Management theory and management principles have also evolved in response to these demands. Management principles such as ensuring optimal resources etc make confident that the business does not bring destruction to society and also that it benefits society.
- Management training, education, and research:
Principles of management are at the core of management theory. As such these are used as a basis for management training, education and research. All the knowledge imparted to the students of management is derived from management principles. You must be aware that entrance to management institutes is preceded by management aptitude tests.
- Effective Administration:
Administration of a business is a part and parcel of management. Principles of Management cooperate an enter role in administering the business by helping in the instruction of the human resources among each other and also by prescribing norms of relations. For example, decentralization as a principle helps in management by giving sufficient control to many units transversely the business to make sure observance and effectiveness.
In conclusion, it can be said that understanding the meaning, nature, and significance of principles of management will help us to appreciate their applicability in real-life situations.