The principles of management derive their significance from their utility. They provide useful insights to managerial behavior and influence managerial practices. Managers may apply these principles to fulfill their tasks and responsibilities. Principles guide managers in taking and implementing decisions. The significance of principles of management can be discussed in terms of the following points:
(i) Providing managers with useful insights into reality: The principles of management provide the managers with useful insights into real-world situations. Adherence to these principles will add to their knowledge, ability and understanding of managerial situations and circumstances.
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.
(ii) Optimum utilization of resources and effective administration: Resources both human and material available with the company are limited. They have to be put to optimum use. 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.
(iii) Scientific decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. They must be timely, realistic and subject to measurement and evaluation. Management principles help in thoughtful decision-making.
(iv) Meeting changing environment requirements: Although the principles are in the nature of general guidelines but they are modified and as such help managers to meet changing requirements of the environment. For example, management principles emphasize division of work and specialization.
(v) Fulfilling social responsibility: The increased awareness of the public, forces businesses especially limited companies to fulfill their social responsibilities. Management theory and management principles have also evolved in response to these demands.
(vi) 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. You must be aware that entrance to management institutes is preceded by management aptitude tests.
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.