Principles of Management – Introduction, Nature, Process, Importance

“Management is the art of getting things done through people in formally organized groups” – Koontz

Management refers to a set of activities (planning, organising, decision making, controlling etc.) directed towards an organisation’s resources (human, financial, physical and informational) with the aim of achieving organisation’s goals in an efficient and effective manner.

According to Henry Fayol – “To manage is to Forecast and plan, to organize, to command to control and to coordinate”

“Management is what a Manager does” – A manager utilizes scarce resources of the organization in an efficient manner in order to achieve goals of an organization.

Aims of Management

  1. To increase efficiency in business operations

  2. To achieve individual, organizational and social goals

  3. To cope with changes in the dynamic business environment

  4. To work with and through other people

  5. To achieve organizational objectives effectively and efficiently

Nature / Characteristics of Management

  1. Management is a human activity – It is performed by and through people.

  2. It is pervasive i.e. it is needed at all levels in an organisation (Top, Middle, Bottom) tough the nature and scope of tasks may vary.

  3. It is universal – It is applicable in business as well as other social and political organisations.

  4. It is a social process – It deals with people and aims at optimum utilization of resources for the benefit of society as a whole.

  5. It is intangible – It cannot be seen but can be felt in form of increase in production, sales or profit.

  6. It is goal oriented – Management aims at achieving various economic and non-economic goals.

  7. It is a group activity – Management involves getting things done through people in a formally organized group and aids in achieving individual as well as organisational goals.

  8. It is a system of authority – Authority is the right to give orders and the power to obtain obedience from employees. A manager gets things done by using authority over his/her subordinates.

  9. It is a distinct activity and dynamic activity – A manager visualizes the problems in a business and takes suitable steps to adapt the business with the changing internal and external environment.

  10. It is a science as well as an Art – It is a systematic body of knowledge based on general principles which are universally applicable therefore it is a science. But a manager also requires various skills and creativity to solve complex problems and achieve results and hence it is also an art.

  11. It is multi-disciplinary – It is borrows from psychology, sociology, anthropology, ecology, economics, statistics, operations research etc.

  12. It is a process which involves certain functions like planning, organising, staffing, directing and controlling.

Management – Science or Art ?

It can be considered as science as:

  1. It is a systematic body of knowledge

  2. It is a Social Science i.e. it deals with human beings

  3. Managers carry out experiments

  4. Principles of Scientific Management are widely used

It can be considered an Art as:

  1. Managers diagnose and solve problems using sound knowledge, experience and creativity.

  2. It involves combination of human and non-human resources in a creative way.

  3. Every manager manages differently based on his knowledge and experience.

  4. It requires constant practice to become a successful manager.

Therefore, Management is considered a science as well as an art.

Management Process / Functions

Management is dynamic process consisting of various elements and activities. The management process involves series of actions or operations that are performed in a sequence to achieve organizational goals and objectives.

The main functions of a management process are:

1. Planning – It is the process of forecasting future needs of the organisation and making decisions regarding future course of action required to accomplish goals. It is a thinking process concerned with determination of –

  1. what is to be done?

  2. how it must be done?

  3. when and where it must be done?

  4. who is to do it?

  5. how will results be evaluated?

It provides direction to the enterprise and helps in coping up with environmental changes.

2. Organizing – It is concerned with arrangement of an organisation’s resources i.e. people, labour, materials, technology, finance etc. in order to achieve organisation objectives.

A manager takes decisions about division of work, allocation of authority and responsibility and coordination of tasks with an organization. Organizing involves division of work into convenient tasks or duties, grouping such duties and delegating authority in the form of posts to employees. It contributes towards the efficiency of an organization.

3. Staffing – It is an activity where people are recruited, selected, trained, developed, motivated and compensated for managing various positions. It involves movement of individuals into an organisation and movement of people within organisation (transfer, promotion, job rotation) and movement of people outside the organization (termination, retirement). It is essentially selecting the right man for the right job.

It involves –

  1. Recruitment It is the process of attracting maximum number of applicants for a particular job.

  2. Selection Screening the candidates and choosing the best one out of them.

  3. Training & Development – Imparting necessary knowledge and skills required for the performance of a particular job.

  4. Compensation – Price paid to workers for services they render to the organisation.

4. Directing – It is the function of guiding and supervising the activities of the subordinates. It involves the following activities –

  1. Leading – It includes motivating and communicating with people individually and in groups for the purpose of stimulating people to be high performers.

  2. Influencing – Guiding the activities of members of an organization in an appropriate direction.

  3. Motivatiing – It is the process of stimulating people to take a desired courses of action.  A manager inspires and encourages employees to take required action.

  4. Communicating – It involves transfer of information from one person to another.

5. Controlling – It is the process of influencing actions of a person or group to attain desired objectives. It includes four activities –

  1. Setting standards of performance

  2. Measuring actual performance

  3. Comparing actual performance from planned performance on standards

  4. Taking corrective actions to ensure accomplishment of objectives

It is the process of visualizing deviations in the performance and taking corrective actions based on gap between actual and planned standards of performance.


Its importance lies in:

  1. Optimum utilization of resources – A manager eliminates wastage which leads to efficiency in all business operations.

  2. Effective leadership and motivation – It helps the employees to work in harmony and achieve goals in a coordinated manner. It provides effective leadership and motivation to employees to work harder.

  3. Sound industrial relations – A Manager maintains balance between the demands of employees and organisational requirements, thereby helps to minimize industrial disputes.

  4. Achievement of goals – It helps in realizing goals with maximum efficiency by reducing unnecessary deviations, overlapping efforts and waste motions.

  5. Maintaining equilibrium – It helps an organisation to survive in a dynamic environment. A manager anticipates changes in the business environment and takes suitable steps in order to adapt the business constantly with the changing environment.

  6. Improves standard of living – It improves Standard of living of people by optimum utilization of scarce resources, ensuring survival of firm in the dynamic environment, exploiting new ideas for the benefit of the society, developing employees talents and capabilities.

  7. Establishing Sound Organisation – Managers help in establishing a sound organization through effective authority and responsibility relationships.

  8. Reduces costs – A manager uses cost effective techniques to reduce production costs and increase output.

#IntroductiontoManagement #ProcessofManagement #ImportanceofManagement #PrinciplesofManagement #NatureofManagement #ManagementProcess

0 views0 comments