Principles Based Management

Principles of Management were first given by F.W. Taylor in modern management theory. Henri Fayol gave a list of 14 principles as important principles that he followed as CEO and Managing Director of a Mining Organization. Koontz has expanded these principles into function wise principle. He gave first principles related to planning and control. Then he gave principles related to organizing, staffing and directing.

Narayana Rao now advocates that the list of functions of management should be Planning, Organizing, Resourcing,  Executing and Control. The two new functions proposed, resourcing and execution have good support in literature now. Resource based view (RBV) in strategic management literature highlights the need for entrepreneurs and managers to acquire resources as an important activity of them. Similarly in strategy management literature, it is being emphasized that execution is the key to get results. So far execution did not get the emphasis it deserved and planning only got highlighted.

Management has to be undertaken keeping in view the principles of management that are now well established will almost a century of existence. Many of these principles are converted into methods and techniques. Various tools were developed to aid in the use of these methods and techniques. Every management student and industrial engineering student has to know these principles and the methods of applying them in practice.

Principles of Management - Weihrich, Cannice and Koontz (14th edition)

Formerly Koontz and O'Donnell

List of Principles

Principles of Planning

Principle of primacy of planning
Principle of objectives
Principle of contribution to objectives
Principle of efficiency of plans

Principle of planning premises
Principle of strategy and policy framework

Principle of limiting factor
Principle of of commitment
Principle of flexibility
Principle of of navigational change

Principles of Organizing

Principle of unity of objectives
Principle of organizational efficiency

Principle of span of management

Scalar Principle
Principle of delegation by results expected
Principle of absoluteness of responsibility
Principle of parity of authority and responsibility
Principle of unity of command
Authority level principle

Principle of balance
Principle of flexibility
Principle of leadership facilitation

Principles of Staffing

Principle of objective of staffing
Principle of staffing

Principle of job definition
Principle of managerial appraisal
Principle of open competition

Principle of management training and development
Principle of training objectives
Principle of continuous development

Principles of Leading

Principle of harmony of objectives
Principle of motivation
Principle of of Leadership

Principle of communication clarity
Principle of integrity of the leader and communications
Principle of supplemental use of informal organization

Principles of Control

Principle of the purposes of control
Principle of future directed controls
Principle of control responsibility
Principle of efficiency of controls
Principle of preventive control

Principle of reflection of plans
Principle of organizational suitability
Principle of individuality of controls

Principle of standards
Principle of critical point control
The exception principle

Principle of flexibility of controls
Principle of action

More detail on each principle

Page numbers refer to 14th Edition of Heinrich, Cannice and Koontz

Principles of Planning

Principle of primacy of planning

Planning logically precedes all other planning functions.

Principle of objectives

If objectives are to be meaningful to people, they must be clear, (attainable and verifiable).

Goals derived from objectives for various periods have to be clear, attainable and verifiable.

Principle of contribution to objectives

The purpose of every plan and all supporting plans is to  promote the accomplishment of enterprise objectives.

Planning - Principle of alternatives

Planning - Principle of timing

Principle of efficiency of plans

The efficiency of a plan is measured by the amount it contributes to purpose and objectives offset by the costs required to formulate and operate it and by unsought consequences.

Return on investment best captures the principle of efficiency. But if human element of an organization becomes unhappy or the customers becomes unhappy or suppliers become unhappy or any group stakeholders become unhappy, ROI may not be able to capture it. But the negative consequences follow from the unhappiness. Managers have to take that also into account.

Principle of planning premises

The more thoroughly individuals charged with planning understand and agree to utilize consistent planning premises, the more coordinated enterprise planning will be.

Principle of strategy and policy framework

The more strategies and policies are clearly understood and implemented in practice, the more consistent and effective will be the framework of enterprise plans.

Alignment of all persons in the organization to work in favor of the strategy has to be achieved. This issue was highlighted by Harrington Emerson in 1912 in his book, 12 Principles of Efficiency. The first principles, ideals, is concerned with this.

Planning - Principle of competitive strategies
http://nraomtr.blogspot.com/2015/03/planning-principle-of-competitive.html

Principle of limiting factor

In choosing among alternatives, the more accurately individuals recognize and allow for factors that are limiting or critical to the attainment of the desired goals, the more easily and accurately can they select the most favorable alternative.

Critical Success Factors, is the term under which research is being carrried in all important areas of business activities and management activities to identify the variables that determine the success. The The planners have to evaluate their internal environment to judge whether they can provide those critical success factors. If the answer is negative, they have to postpone implementation of plans requiring those CSFs till they acquire physical resources,  competencies and capabilities

Principle of of commitment

Logical planning should cover a period of time in the future necessary to foresee as well as possible, through a series of actions, the fulfillment of commitments involved in a decision made today.

Principle of flexibility

Building flexibility into plans will lessen the danger of losses incurred through unexpected events,but the cost of flexibility should be weighed against its advantages.

Principle of of navigational change

The more that planning decisions commit individuals to a future path, the more important it is to check on events and expectations periodically and redraw plans as necessary to maintain a course toward desired goal.

Principles of Organizing

Principle of unity of objectives - Principle of contributing to  objectives

An organization structure is effective if it enables individuals to contribute to enterprise objectives.


Organization - explanation (p.198)
Aim:Achieving Objectives (p.229)

Principle of organizational efficiency

An organization is efficient if it is structured to aid the accomplishment of enterprise objectives with a minimum of unsought consequences or costs.

Principle of span of management

In each managerial position, there is a limit to the number of persons an individual can effectively manage, but the exact number will depend on the impact of underlying variables.

Organizational Levels and Span of Management (pp.200-202)

Scalar Principle

The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility for decision making and the more effective will be organizational communication.

Principle of delegation by results expected

Authority delegated to all individual managers should be adequate to ensure their ability to accomplish expected results.

Delegation of Authority (p.240)
The Art of Delegation (pp. 240-241)

Principle of absoluteness of responsibility

The responsibility of subordinates to their superiors for performance is absolute, and superiors cannot escape responsibility for the organizational activities of their subordinates.

Principle of parity of authority and responsibility

The responsibility for actions should not be greater than thatimplied by the authority delegated, nor should it be less.

Empowerment (p.236)

Principle of unity of command

The more complete an individual's reporting relationships to a single superior, the smaller the problme of conflicting instructions and the greater the feeling of personal responsibility for results.

Authority level principle

Maintenance of intended delegation requires that decision within the authority of individual managers should be made by them and not be referred upward in the organization structure.

Principle of Functional definition

The more a position or a department has a clear definition of the results expected, activities to be undertaken, and organizational authority delegated, as well as an understanding of authority and informational relationships with other positions, the more adequately the individual responsible can contribute toward accomplishing enterprise objectives.

Principle of balance

In every structure, there is need for balance. The application of principles or techniques must be balanced to ensure overall effectiveness of the structure in meeting enterprise objectives.

Need for Balance (p.203)

Principle of flexibility

The more that provisions are made for building flexibility into an organization structure, themore adequately an organization structure can fulfill its purpose.

Principle of leadership facilitation

The more an organization structure and its delegation of authority enables managers to design and maintain an environment for performance, the more they will help the leadership abilities of those managers.

Principles of Staffing

Principle of objective of staffing
The objectives of staffing is to ensure that organizational roles are filled by qualified people who are able and willing to occupy them.

Definition of Staffing (p.275)

Principle of staffing

The clearer the definition of organizational roles and their human resource requirements, and the better the techniques of manager appraisal and training employed, the higher the managerial capacity.

Principle of job definition

The more precisely the results expected of managers are identified, the more the dimensions of their positions can be defined.

Position Descriptions (p.255)
Position Requirements and Job Design (pp.289-290)

Principle of managerial appraisal

The more clearly verifiable objectives and required managerial activities are identified, the more precise can be the appraisal of managers against these criteria.

Choosing Appraisal Criteria (pp.305-306)
Appraising Managers against Verifiable Objectives (pp. 306-311)
A Suggested Program for Appraising Managers (pp. 311-313)

Principle of open competition

The more an enterprise is committed to the assurance of quality management, the more it will encourage open competition among all candidates for management positions.

The Policy of Open Competition (pp. 285 - 286)

Principle of management training and development

The more management training and development is integrated with the management process and enterprise objectives, the more effective the development programs and activities will be.

Manager Development Process and Training (pp. 327 -329)

Principle of training objectives

The more precisely the training objectives are stated, the more likely are the chances of achieving them.

Evaluation and Relevance of Training Programs (pp.336)

Principle of continuous development

The more an enterprise is committed to managerial excellence, the more it requires that managers practice continuous self development.

Principles of Leading

Principle of harmony of objectives

The more managers can harmonize the personal goals of individuals with the goals of the enterprise, the more effective and efficient the enterprise will be.

Principle of motivation

Since motivation is not a simple matter of cause and effect, the more managers carefully assess a reward structure, look upon it from a situational and contingency point of view, and integrate it into the entire system of managing, the more effective, a motivational program will be.

Principle of of Leadership

Since people tend to follow those who, in their view, offer them a means of satisfying their personal goals, the more managers understand what motivates their subordinates and how these motivators operate, and the more they reflect this understanding in carrying out their managerial actions, the more effective they are likely to be as leaders.

Ingredients of Leadership (pp. 387-389)

Principle of communication clarity

Communication tends to be clear when it expressed in a language and transmitted in a way that can be understood by the receiver.

Principle of integrity of the leader and communications

The greater the integrity and consistency of written, oral,or nonverbal messages, as well as of moral behavior of the sender, greater the acceptance of the message by the receiver.

Principle of supplemental use of informal organization

Communication tends to be more effective when managers utilize the informal organization to supplement the communication channels of the formal organization.

Principles of Control

Principle of the purposes of control

The task of control is the ensure the success of plans by detecting deviations from plans and furnishing a basis for taking action to correct potential or actual undesired deviations.

Principle of future directed controls

Because of time lags in the total system of control, the more a control system is based on feedforward rather than simple feedback of information, the more managers have the opportunity to perceive undesirable deviations from plans before they occur and to take action in time to prevent them.

Principle of control responsibility

The primary responsibility for the exercise of control rests in the manager charged with the performance of the particular plans involved.

Principle of efficiency of controls

Control techniques and approaches are efficient if they detect and illuminate the nature and causes of deviations from plans with a minimum of costs or other unsought consequences.

Achieving Economy of Controls (pp. 481)

Principle of preventive control

The higher the quality of managers in a managerial system, the less will be the need for direct controls.

Feed forward or Preventive Control (pp. 473 - 476)

[Remember: Principle of continuous development

The more an enterprise is committed to managerial excellence, the more it requires that managers practice continuous self development.]

Principle of reflection of plans

The more that plans are clear, complete, and integrated, and the more that controls are designed to reflect plans, the more effectively controls will serve the needs of managers.

Tailoring Controls to Plans (pp. 479)

Principle of organizational suitability

The more that an organization structure is clear, complete, and integrated,and the more that controls are designed to reflect the place in the organization structure where responsibility for action lies, the more controls will facilitate correction of deviations from plans.

Fitting the Control System to the Organization Culture (pp. 481)

Principle of individuality of controls

The more that control techniques and information are understandable to individual managers who must utilize them, the more they will actually be used and the more they will result in effective control.

Tailoring Controls to Individual Managers (pp. 479 - 480)

Principle of standards

Effective control requires objective, accurate, and suitable standards.

Establishment of Standards (pp.466)
Critical Control Points, Standards and Benchmarking (pp. 468 - 470)

Principle of critical point control

Effective control requires special attention to (measuring) those factors critical to evaluating performance against plans.

Critical Control Points, Standards and Benchmarking (pp. 468 - 470)

The exception principle

The more that managers concentrate control efforts on significant exceptions from planned performance, the more efficient will be the results of their control.

Designing Controls to Point up Exceptions at Critical Points (pp. 480)

Principle of flexibility of controls

If controls are to remain effective despite failure or unforeseen changes of plans, flexibility is required in their design.

Ensuring Flexibility of Controls (pp. 481)

Principle of action

A control activity is justified only if indicated or actual deviations from plans are corrected through appropriate planning, organizing, staffing and leading based on the output of the control activity.

Establishing Controls that Lead to Corrective Action (pp. 481)





Stephen Covey's Principle-Centered Leadership Model - Summary
http://nraomtr.blogspot.com/2015/03/stephen-coveys-principle-centered.html

Principles Based Leadership
https://library.educause.edu/~/media/files/library/2006/4/erb0608-pdf.pdf

Seven Strategies for Delivering Profits with Principles
https://www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_7_jackson_nelsonFINAL.pdf


Value Based Management - Shareholder Value Based Management
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/what-is-value-based-management


Results Based Management
http://www.un.cv/files/UNDG%20RBM%20Handbook.pdf



GOLDMAN SACHS BUSINESS PRINCIPLES
http://www.goldmansachs.com/who-we-are/business-standards/business-principles/

Management Subject-wise Principles

Principles of Strategic Management

Principles of Software Engineering

Updated 28 August 2016,  28 July 2016