The four points regarding significance of Principles of Management are:
→ Providing managers with useful insights into reality: The principles of management provide the managers with useful insights into real world situations. These principles will add to their knowledge, ability and understanding of managerial situations and circumstances. It will also enable managers to learn from past mistakes and conserve time by solving recurring problems quickly.
→ Optimum utilisation of resources and effective administration: Resources both human and material available with the company are limited. Principles equip the managers to foresee the cause and effect relationships of their decisions and actions. Thus, the wastages associated with a trial-and-error approach can be overcome.
→ Scientific decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. Management principles help in thoughtful decision-making. They emphasise logic rather than blind faith.
→ Meeting changing enviornment requirements: Management principles are flexible to adapt to dynamic business environment. For example, management principles emphasise division of work and specialisation. In modern times this principle has been extended to the entire business whereby companies are specialising in their core competency and divesting non-core businesses.
