Principles of Management: Definition, Evolution, and Levels

Posted on Mar 8, 2026 in International Business Economics

1. What is Management? Art and Science

Management is the process of planning, organising, staffing, directing, and controlling human and physical resources to achieve organisational goals effectively and efficiently. It ensures optimum use of resources to achieve desired objectives.

Nature of Management

• Goal-Oriented: Management focuses on achieving predetermined objectives.
• Continuous Process: It involves ongoing activities like planning, organising, directing, and controlling.
• Universal: Management is applicable to all organisations, such as businesses, schools, hospitals, and government offices.
• Group Activity: Management involves coordination of efforts of different individuals.
• Dynamic: Management adjusts according to changes in the internal and external environment.
• Intangible: Management cannot be seen, but its presence can be felt through results and performance.

Functions of Management

The main functions of management are:

• Planning: It involves setting objectives and deciding in advance the actions to be taken to achieve them.
• Organising: It includes arranging tasks, allocating resources, and assigning duties to individuals.
• Staffing: It involves recruitment, selection, training, and development of employees.
• Directing: It includes guiding, motivating, leading, and supervising employees to achieve goals.
• Controlling: It involves measuring performance, comparing it with standards, and taking corrective actions.

Management as an Art

Management is an art because it requires personal skills, creativity, leadership qualities, and experience. Every manager applies managerial knowledge differently based on situations. Practical knowledge and continuous practice make management an art.

Key Points (Management as an Art)

• Practical Application: Management focuses on applying knowledge in real-life situations rather than only theory.
• Personal Skills: It requires communication skills, leadership, motivation, and human relations.
• Creativity: Managers must think creatively to solve problems and achieve goals.
• Experience-Based Learning: Managerial efficiency improves with experience and practice.
• Result-Oriented: Success of management is judged by results, just like any other art.

Management as a Science

Management is a science as it has a systematic body of knowledge, well-defined principles, and theories developed through observation and experiments. These principles help managers in decision-making and problem-solving.

Key Points (Management as a Science)

• Systematic Knowledge: Management has organised principles and concepts.
• Cause and Effect Relationship: Management principles explain relationships between managerial actions and results.
• Universal Principles: Principles of management are applicable to different organisations.
• Scientific Methods: Uses planning, forecasting, and analytical techniques.
• Predictability: Helps in predicting outcomes to a certain extent.

2. Evolution of Management Thoughts and Importance

The evolution of management thought refers to the development of different ideas, theories, and approaches to management over time. As organisations became larger and more complex, new management concepts were developed to improve efficiency, productivity, and human relations.

1. Classical Theory of Management

This was the earliest systematic approach to management and focused mainly on efficiency and productivity.

• Scientific Management (by Frederick Winslow Taylor) emphasized scientific study of work, standardisation, time and motion studies, and incentive wages to increase productivity.
• Administrative Management (by Henri Fayol) focused on management functions like planning, organising, commanding, coordinating, and controlling.
• Bureaucratic Management (by Max Weber) stressed formal rules, hierarchy, division of labour, and authority.

2. Neo-Classical (Human Relations) Approach

This approach highlighted the importance of human behaviour in organisations.

• It focused on motivation, leadership, communication, and group behaviour.
• The Hawthorne Experiments (by Elton Mayo) showed that social and psychological factors influence employee performance more than physical conditions.

3. Modern Management Approaches

Modern theories consider organisations as dynamic systems.

• Systems Approach views the organisation as a system made up of interrelated parts.
• Contingency Approach states that there is no one best way to manage; managerial decisions depend on situations.
• Quantitative Approach uses mathematical models and statistical techniques for decision-making.

Importance of Management Thoughts in Modern Organisations

The evolution of management thoughts is important because it helps managers understand both efficiency and human behaviour. It provides scientific tools for planning and decision-making, improves employee motivation and job satisfaction, and helps organisations adapt to changing environments. Modern organisations use a combination of classical, human, and modern approaches to achieve growth, stability, and competitiveness.

3. Manager Definition and Levels of Management

A manager is a person who plans, organises, directs, and controls the activities of an organisation in order to achieve its objectives. A manager gets work done through and with others by efficiently using available resources.

Management is generally divided into three levels based on authority and responsibility:

1. Top Level Management

This level consists of the Chairman, Managing Director, CEO, Board of Directors, etc. They are responsible for overall management of the organisation.

Functions of Top Level Management:

• Setting organisational goals and policies
• Framing long-term plans and strategies
• Making major decisions and allocating resources
• Maintaining relations with government, investors, and public
• Overall control and direction of the organisation

2. Middle Level Management

This level includes Departmental Managers, Branch Managers, Plant Managers, etc. They act as a link between top and lower management.

Functions of Middle Level Management:

• Implementing plans and policies of top management
• Coordinating activities of different departments
• Motivating and supervising lower-level managers
• Communicating instructions and feedback
• Training and developing employees

3. Lower Level (Supervisory) Management

This level includes Supervisors, Foremen, Section Officers, etc. They directly supervise the workers.

Functions of Lower Level Management:

• Assigning jobs to workers
• Supervising day-to-day activities
• Ensuring discipline and efficiency
• Maintaining quality and safety standards
• Reporting performance to middle management

4. Control Process and Types

Control is the management function that ensures actual activities conform to planned activities. It involves setting standards, measuring performance, comparing it with standards, and taking corrective action if necessary.

Steps Involved in the Control Process

1. Establishing standards of performance.
2. Measurement of actual performance.
3. Comparison of actual performance with standards.
4. Taking corrective action (if deviation exists).

Types of Control

Control can be classified based on when the action is taken:

• Feedforward Control (Preventive): Takes action before the activity begins (e.g., checking raw materials quality).
• Concurrent Control (Steering): Takes action during the activity (e.g., supervising an employee while they work).
• Feedback Control (Post-action): Takes action after the activity is completed (e.g., reviewing sales reports after a quarter).