Principles of Management (Meaning and Explanation)

We explain to you what the principles of management are and their importance. Also, the principles of classical administration.

Principles of management

The principles of business management are the norms and values that guide an organization (both to its structure and to its employees), through different activities and tasks led by the management area.

Management is the main function of the administrative process of a company which allows you to perform efficiently and remain over time. It is a process of great responsibility and is based on different general principles that apply to any type of organization.

Business management is an area that must guide the work of the entire company and achieve the maximum possible performance of human and material resources to meet its objectives. Tasks like planning, organizing, managing and controlling the work of the entire organization are some of the functions of the direction.

Importance of direction

Management is the essential part of business administration, to which the rest of the areas must respond. Correct management performance will allow the objectives to be met and achieve success, you will even be able to face crisis situations or unforeseen events.

Management is an activity aimed at leading, directing and controlling the efforts of a group of individuals and everything that makes up a company. Good leadership implies spontaneous and voluntary adhesion of employees instead of a sanction for those who do not respect the rules.

Principles of management

The principles of business management have their origin in Henry Fayol's book (published in 1916) which, after technological advances and business practice in the following decades, were improved. Currently, five basic principles are recognized that allow the performance of an organization to be carried out:

Coordination of interests It consists of maintaining harmony between the different members of the organization so that they can carry out their objectives (for example, maintaining a balance between the interests of investors, the board of directors and employees).
The impersonality of command. It consists of the performance of the authority based on requirements and objectives stipulated by the organization. The command authority must act based on the interests and demands of the company, not according to their individual criteria and interests.
Direct supervision It consists of making the chain of command function correctly, through various communication channels that allow issuing orders, requesting reports and receiving a response. In this way, the authority can provide support and monitoring to each person responsible for an area.
The hierarchical path It consists of the quality of the messages transmitted by the authority so that the recipient understands their truthfulness and importance. Messages must be clear and precise, leaving no room for double interpretation. In this way, misunderstandings, conflicts and rumors are avoided.
Conflict resolution It consists of avoiding possible conflict situations and solving problems, even if at first glance they seem of little importance (they could worsen through word-of-mouth spread among employees). Conflict is a problem that takes precedence over achieving the organization's goals.

You may be interested: Corrective Maintenance

The 14 principles of administration according to Fayol

French industrialist Henry Fayol was a major contributor to the management approach. In his book titled Industrial and general administration (1916) announced the fourteen principles that provide administrative guidance on how to implement the five functions of management:

The division of labor Divide the organization of work according to the specialization and efficiency of each employee and each area, to achieve better effectiveness and productivity.
Authority and responsibility Establish a balance between the power exercised by the authority and the functions it must perform, to avoid abuse of authority.
The discipline Respect and make others respect, comply with the rules and regulations of the organization. This principle can be promoted through self-discipline or through sanctions or fines for those who do not respect them.
The command unit Establish that each employee reports to a single direct superior, from whom they will receive orders and support. Otherwise, the performance and productivity of the organization could be affected.
The steering unit Ensure that all activities that have the same objective (such as marketing, advertising, sales and promotion) are directed by the same director, through an established plan and procedures.
The subordination of individual interest to the general interest Recognize and promote, first, the general interest of the organization and, second, that of the employees (such as promotion, training or learning new tasks).
The remuneration Maintain a remuneration policy (monetary value that the company gives to the employee, in exchange for the services received) that must include financial and non-financial incentives.
Centralization and decentralization Define the degree of concentration of power of the authority, which varies depending on the condition of the business and the type of personnel.
The stepped chain Clearly establish a line of authority or command, which can be horizontal or vertical.
The order Maintain a place for each object (in order to optimize production times) and maintain social order (through the appropriate selection of each employee in the most suitable position).
Equity Give equal treatment to all employees, ensuring kindness and justice (that type of bond generates loyalty and commitment).
Personal stability Promote and monitor the performance of the employee who is hired permanently and who knows that he or she has opportunities to progress within the organization.
The initiative Encourage employees to give their opinions, provide constructive suggestions and put together work plans, so that they feel like participants in the organization.
The esprit de corps Create unity, cooperation and team spirit among employees, to avoid confrontations. It is important to reward each person according to their merits without generating jealousy or situations of disagreement.