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What Is Management: Definition, Principles, Levels and Functions

The word “Management” is often used but rarely fully understood. But really what is Management? The term refers to different things to different people and there’s a lot of confusion on how one should define it. Management definition can be put in two ways: 

  1. Actions and techniques which an individual or group uses in an organization, which are usually referred to as management techniques
  2. A person having authority and responsibility for the direction and control of an enterprise.

In this article, we’ll cover what is management and provide some insight into principles of management, and how various principles and levels of management fit together. Also, here’s a detailed guide on Product Management: a-comprehensive-guide-to-product-management-in-2023.

What is Management?

Management definition entails the process to ensure coordination and control of ideas, materials, people, and issues. Management becomes necessary when several tasks are being performed simultaneously. But is that clear enough to understand what is Management? If you want to learn about the risks involved with management, read our guide here: a-detailed-guide-to-the-5-step-risk-management-process.

Principles of management

Once you are clear with what is management, know the principles of management, which are a set of guidelines for how to manage employees in a company. The principles of management are the fundamental building blocks for creating and maintaining a successful business. 

  1. Division of Work

    The first of the principles of management is Division of work. It refers to the process of dividing work into smaller tasks and assigning them to different people. The main objective is to improve efficiency by assigning different tasks to different employees. This helps to reduce costs and also increases productivity.

  2. Balancing Authority and Responsibility

    Balancing authority and responsibility refer to the process of dividing authority between managers and subordinates while sharing responsibilities such that both parties take ownership of their respective roles. These principles of management ensure efficient functioning by reducing conflict between managers and subordinates.

  3. Discipline

    Discipline is the key principle of management that involves guiding employees toward achieving organizational goals through appropriate communication, motivation, and training techniques used by management at all levels within an organization.

  4. Unity of Command

    One of the key principles of Management is Unity of Command. This means that people have one boss and one chain of command. It’s a way to ensure accountability and efficiency.

  5. Unity of Direction

    This means that employees know what the company’s goals are, what their individual roles are in achieving those goals, and how they fit into the larger picture.

  6. Subordination of Individual Interests to the General Interest

    This is an important principle of management because it ensures that everyone works together toward a common goal, rather than selfishly trying to get ahead at the expense of others.

  7. Remuneration

    Remuneration is the process of rewarding employees for their work by utilizing compensation systems that are based on merit, need, and performance. The goal of remuneration is to create a fair system so that all employees feel like they are getting what they deserve for their efforts.

  8. Centralization

    Centralization principle of management refers to the process of moving decision-making power from local levels to regional or national levels. This allows for quicker decisions that affect a wider range of people and resources than would be possible with localized decision-making processes.

  9. Scalar Chain

    The scalar chain is a series of levels within an organization where each level has greater responsibility than its predecessor but less than its successor. These levels are typically referred to as managers, supervisors, and workers; however, there can be more than one layer within each level as well as multiple layers from one level to another.

  10. Order

    Order is one of the most important principles of management. Order refers to the way in which people should work in an organization so that they can get their work done effectively and efficiently.

  11. Equity

    Equity means fairness in all matters concerning employment. It implies that all employees should be treated equally and fairly without any discrimination on the basis of race, color, creed or sex.

  12. Stability of Tenure

    The concept of stability of tenure refers to a permanent job for an employee. In this management principle the employee can be hired for any period by paying him/her wages during this period and when it comes to an end he/she will be paid wages till he/she finds another job or retires voluntarily from his/her job.

  13. Initiative

    It encourages employees to take the first step in solving problems or implementing new ideas. The principle of initiative ensures that employees are not waiting for instructions from their supervisors before they act. 

  14. Esprit De Corps

    Esprit de corps means “a sense of pride in one’s work or accomplishments.” It encourages employees to feel proud about the work they do and to put effort into every aspect of their jobs, whether it’s helping customers or providing feedback on how things could be improved. 

Key Functions of Management

The management principles ensure efficiency in an organization by dividing up tasks among different departments—such as sales, marketing, and production—and assigning each department specific responsibilities. Now that we know what management and its principles is, lets deep dive into the functions of management.

  1. Planning

    Planning is a crucial function of management that involves careful consideration of all relevant factors before deciding or taking action. This includes identifying the needs, objectives, and constraints of a given situation. Planning can be seen as an iterative process that may require several iterations before an acceptable solution is found.

  2. Organising

    Organising is the function of management that involves establishing clear lines of authority and responsibility for tasks, as well as developing systems for coordinating work efforts across departments or teams.

  3. Staffing

    Staffing is a fundamental function of management that involves hiring, assigning, and managing employees to perform their assigned tasks effectively and efficiently. Staffing requires managers to make decisions about who should perform specific tasks, when and where the tasks should be performed, time allocated for each task, etc.

  4. Controlling

    Controlling is the activity of ensuring that activities are carried out as planned. This management function can include the monitoring and evaluation of work done so that it meets the standards required by an organization or other relevant body.

  5. Directing

    Directing is the act of deciding on a course of action and assigning responsibilities for implementing it. This management function can involve identifying and selecting goals for an organization, then delegating tasks and responsibilities to individuals who are best suited to carry them out.

Levels of Management

All businesses have leadership and management, but each leader tends to their people in a different way, this is called levels of management. It’s helpful to define where the different leadership styles fit into 3 levels of management. To understand what is management in-depth lets deep dive in the levels of management.

  1. Administrative

    The lowest in levels of management, administrative managers typically oversee the day-to-day operations of a company. These managers often have little to no decision-making power and typically have only one or two employees reporting directly to them. They are primarily responsible for ensuring that the company’s policies and procedures are followed by all, and all aspects of their department or division are running smoothly.

  2. Managerial

    Next in levels of management is Managerial. Managers who have direct reports but do not report directly through an organization’s hierarchy are considered managerial managers. These managers typically supervise two to five people and oversee the day-to-day tasks of those employees. The responsibilities of managerial managers include creating job descriptions for each new hire, hiring new personnel when necessary, training new hires on how to perform their job duties correctly and effectively.

  3. Top Level Management

    Top Level of Management is the highest level of management in an organization. These people are responsible for overseeing all other levels of management within an organization and making sure that everything runs smoothly and efficiently.

Importance of management

We have understood what is management hence we can clearly say that management is important because it ensures the business can meet its goals, and help employees feel supported and cared for. When managers are able to form good relationships with their team members, it makes it easier for them to get things done. They’re more likely to feel like they’re part of a team and less likely to feel like they’re being micromanaged by someone who doesn’t understand them or their needs.

What are the key skills required for effective management?

The key skills required for effective management are:

  • Communication skills –

    Managers need to be able to communicate clearly and effectively with their employees, as well as with other managers and the company’s stakeholders.

  • Problem-solving skills –

    Managers need to be able to recognize problems and come up with solutions.

  • Decision-making skills –

    Managers need to make decisions based on the best possible evidence and data available at the time.


In this guide of understanding what is Management, we have understood that is the art of getting things done through others. Management principles are there to help you get the job done, but you must be flexible and willing to adapt. Management is also a spectrum: it starts with individual contributors who then move up to managers and then on to executives at the highest levels of an organization. If Management is something you want to learn, take up Hero Vired’s Product management course. If you’re more inclined toward learning the financial side, here’s another extensive guide for you: getting-to-know-financial-risks-types-and-management


Technology can be used to make the process of management more efficient. This is done by automating tasks and processes.
  • Make sure you're giving them clear, consistent feedback.
  • Make sure they know exactly how their work is affecting the broader organization, and how that ties in with their individual goals.
  • Rewarding goes a long way! Make sure you're making it clear when it's time to celebrate something.
Organizational culture is a set of shared beliefs and values that defines how employees feel about their company and how they treat each other, which in turn impacts management. Management's goal is to create an environment where employees are inspired to contribute their best work and feel comfortable enough to speak up when they have concerns.

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