Principles of Planning in Management is the fundamental function of every management. It lays the foundation for the success of an organization. Effective planning helps organizations allocate resources efficiently, enhance decision-making, and reduce uncertainties.
Just as every systematic knowledge is based on some important principles, management and managerial functions are also dependent upon some principles of planning.
The 15 Principles of Planning in Management
The 15 Principles of Management view an organization from a top-down approach and help managers get the best out of their employees and run the business with ease. Let’s take a look at each of these principles and understand them in detail.
Principle 1: Division of Work
This principle states that if an employee is given the same, specific task to do again and again, they will become more efficient and skilled in it. This is opposed to the concept of multi-tasking. Segregating work amongst the workers will also enhance the quality of the product.
This principle of division of work improves the productivity, efficiency, accuracy and speed of the workers and also makes them skilled. It is appropriate for both the technical as well as managerial work level.
Example – At an office, every department has a different responsibility, like IT, administration, human resources, marketing etc. These responsibilities are taken care of by employees specializing in that particular department, thus increasing productivity, efficiency and making them specialists in their field.
Principle 2: Authority and Responsibility
Authority and responsibility are the two key aspects of management. A manager needs to have authority to ensure that his instructions are carried out by the employees. This authority should come along with responsibility, and there needs to be a balance between authority and responsibility.
If managers did not have any authority, they would lack the ability to get any work done. However, if there is more authority than responsibility, the employees will get frustrated.
Principle 3: Discipline
Without discipline, nothing can be achieved. It is the core value for any management or any project. In order to achieve discipline in an organization, there is a need for good supervision and impartial judgment. Good and disciplined behavior of the employees also helps them smoothly build and progress in their professional careers.
Principle 4: Unity of Command
According to this principle, there should be a clear chain of command in the organization.
Employees should be clear whose instructions to follow, and a particular employee ought to receive orders from only one manager. If an employee works under two or more managers, then the stability, authority, and discipline are threatened. This will even cause a breakdown in management structure and employees will burn out.
Example- If an employee has been given a task, and the immediate superior asks him/her to finish it within 3 to 4 hours,but the head of the department orders him/her to deliver that task within 1 hour – in such a case, having no unity of command can not only create confusion but also pressure in the workplace.
Principle 5: Unity of Direction
The work to be done in an organization or management should be organized in such a way that employees work in harmony towards the same objective, under the direction of one manager, and using one plan. When all the employees have a unified goal and motive, it makes the work easier and achieves the set goal easily.
Example – For a range of marketing activities such as advertising, sales promotion, budgeting, etc., there should be only one manager who should be using one plan for all these marketing activities. The different activities can, however, be broken down for different sub-managers, but they should all work towards the common goal under the direction of the main person in charge of the whole thing.
Principle 6: Subordination of Individual Interest
This principle states that an organization should work unitedly towards the interest of the company rather than personal interest. The interest of the company should not be disrupted by the interest of an individual. This refers to the whole chain of command in an organization.
Principle 7: Remuneration
This principle plays an important role in motivating the workers of a management. It states that workers should be paid fair wages for the efforts and work they carry out. If an organization underpays its workers, it will struggle to motivate and keep quality workers. Remuneration can be monetary or non-monetary. There also needs to be a structure in place to reward good performance to motivate employees.
Principle 8: Centralization
Centralization means the concentration of power in the hands of the authority. This follows a top-bottom approach in management. Decentralization Is when this authority is distributed to all the levels of management.
Complete centralization means that people at the bottom will have no authority over their responsibilities. Contrarily, complete decentralization will mean no superior authority to control the organization.
Therefore, no organization can be completely centralized or decentralized. To use this principle effectively in the modern context, there should be a balance of centralization and decentralization. The degree to which this balance needs to be achieved will differ from organization to organization.
Principle 9: Scalar Chain
Scalar chain implies that there needs to be a clear chain of communication between employees and their superiors. Employees should know where they stand in the hierarchy of the organization and who their immediate senior is, and to whom they should be able to contact, if needed.
Example – Every company has a specific scalar chain. Right from the highest level of superiors, like the founder or CEO, to the lowest level of subordinates, it follows a hierarchy for maximum productivity.
Principle 10: Order
According to this principle, there should be an orderly placement of resources in the right place at the right time (money, manpower, materials, etc.) This ensures proper use of resources in a structured fashion. Misplacement of any of these resources might lead to misuse and disorder in the organization.
Example – Employees should be given a designated space and the right equipment or tools to complete their work efficiently.
Principle 11: Equity
All employees should be treated equally and respectfully, irrespective of gender, religion, race, and sexuality. They must feel safe, seen, and heard. All employees should be given equal opportunities to flourish and grow in their careers within the organization. It’s the responsibility of the manager to see that no employees face discrimination.
Principle 12: Stability of Tenure
An organization should work to minimize their staff turnover and maximize efficiency. A new employee doesn’t get used to the culture of an organization right away. He/She should be given enough time to settle into their new jobs and become efficient. Old and new employees alike, should also be ensured job security as instability can lead to work inefficiency.
There needs to be a clear and effective method to handle vacancies as it takes time and expense to train new workers.
Principle 13: Initiative
The management should encourage and support their employees to take initiatives in the business organization. They should listen to the concerns of their employees and also encourage them to develop and carry out plans for improvement.
Taking suggestions from employees regarding certain issues in the organization can make them feel seen and heard in an authoritative position. This will give them a sense of achieving something for the team.
Principle 14: Cost-Benefit Analysis
This principle states that the allocation of resources should be optimized as they are finite. Cost-benefit analysis helps determine the potential costs of implementing a plan against the benefits that it is expected to generate. This evaluation makes sure that the organization’s resources are utilized judiciously and that the benefits outweigh the expenditures.
Principle 15: Esprit de Corps
Esprit de Corps simply means “Team Spirit”. Every management should strive to create morale, unity, and cooperation among the employees. Team spirit is a great source of strength in any organization. Happy and motivated employees are more likely to be efficient and productive.
Example – While discussing a new plan of action for achieving next month’s targets, using the word ‘We’ instead of ‘I’ brings a teamwork spirit to the group.
Objectives of Planning in Management
The objectives of planning in management can be summarized in the following points:
- Planning helps in Achievement of Organizational Objectives
- Planning helps in fulfillment of Organizational Commitments
- Planning helps in Decision Making
- Planning provides Stability to Organizations
- Planning gives an Overall View of Coordination
- Planning helps in Optimum Utilization of Resources or Efficiency of Operations
- Planning aids in Development of Managers
- Planning promotes Innovation and Creativity
- Planning provides a Basis for Control
- Planning helps in Reduction of Risk
- Planning provides Morale Boost Up or Motivation
- Planning facilitates Delegation
- Planning helps in identifying Future Opportunities and Threats
Types of Planning in Principles of Management
The different types of planning in principles of management fall under different classifications. In this part, we will look into the different categories and the types of plans that fall under them.
1. On the Basis of Hierarchy or Levels in the Organization
a) Strategic Plan
c) Operational Planning
2. On the Basis of Use
3. On the Basis of Flexibility
4. On the Basis of Time
5. On the Basis of Functional Areas
The Final Word
In conclusion, these 15 Principles of Management are the pillars of any organization. These principles are integral for planning, prediction, process management, decision-making, control and coordination, and hence, should be implemented in every aspect of management.
