Principles of Management

Principlesof Management

Principlesof Management

Runninga business properly is crucial to achieve the desired success. Somevalues applied in business management are namely planning, organizingand leading. Each of these principles is useful in businessmanagement and none is of less importance. Successful businesses findthe best ways to use these principles in the framework of theircircumstances. Application of the rules varies from one business toanother (Unknown, 2014). Therefore, business owners should determinethe circumstances of their trade and define the best routes to followin the pursuit of their business goals. This essay looks at theseprinciples and their relevance to the case study of Tom’s CoffeeCup.


Planningis usually the initial step in every new business. The people orperson with the idea determines the type of entity they intend tohave. They lay out the strategies needed to attain the objectives.Once an objective has been identified, there are various approaches,which can help reach the desired goal (Gomez-Mejia, Luis, David,Balkin, Robert, 2008). However, there might be some, which will notfit particular situations. The business owners have to identify themost suitable approaches in view of their circumstances. Plans forsmall businesses are usually very simple. As the enterprise grows,the plans become more complex. Plans are usually made for the wholeorganization and for individual sections or departments as well.Sectional plans are designed to contribute to the eventualachievement of the overall plans of the larger business.

Planningis a vital aspect of any business enterprise. The planners shouldrecognize what needs to be done and the resources required. Throughthis process, resources are allocated in a manner that will eliminateor minimize wastage (Unknown, 2014). The planning process involveslooking into the future and identifying likely challenges. Afteridentifying possible challenges, the best approaches to tackle themare identified. Challenges can be common to an industry or exclusiveto an entity. New businesses can draw from the experience of olderones to handle common industry challenges. For unique challenges, itis the duty of leaders to identify how best to handle them.

Manyplans are focused on the future. Planners recognize the currentposition and where they want to be in a given period of time. Then,they determine the steps or actions that need to be carried out inorder to move from one point to another. A mission and visionstatement will help in planning. Having a mission and a vision shouldbe accompanied by clear strategies detailing the actions to be takenat each point. After looking at the Tom’s Coffee Cup, I haverealized that Tom had planned well. He had identified his mission andwhat he wanted to offer his clients. The business was largelysuccessful and had grown to a point of needing a dedicated manager tooversee the activities. His choice of location is another indicationthat he had really spent time to identify a place that would attracthim new clients (Gomez-Mejia, 2008). After starting with coffee asthe main product, other products were added to the menu and thisincreased the sales and revenue for the business.


Oncea business has started to operate, it has to make proper use of itsresources. There are various types of business organizations that canbe adopted. The choice of structure will depend on the nature andcircumstances of the business (Craig, 2009). The main structures arecentralized, decentralized, tall and flat structures. Each of thesestructures has unique advantages. Once again, the structure to beadopted depends on the circumstances the business is operating in.

Largeorganizations have various levels of authority. Section anddepartment heads are given a level of authority to help them guidethe people under them. For small businesses, there are only one orfew levels of authority (Gomes-Mejia et al 2008). The owner of theenterprise is closely linked to the rest of the sections so it ispossible to know everything that is happening. People who are inpositions of authority are allowed to make decisions regarding theactivities entrusted to them. Similar activities are grouped togetherso that they can be controlled and monitored together. When theactivities in the business are well organized, everything flowssmoothly. An organizational structure helps identify areas thatcreate bottlenecks and therefore interrupt the flow of business.

Toavoid any problems in the flow of activities, the right people shouldbe selected to take different levels of authority (Unknown, 2014).Once the right people are allocated their positions, they will ensurethat all activities are done in the right manner. In Tom’ssituation, the right people were selected. The manager was widelyexperienced in the industry. The other employees were also selectedaccording to merit, as it is not indicated any of them createdproblems when handling their duties.

Themain problem with the coffee shop was that all authority wasbequeathed in one person. The manager was the only person whocontrolled everything. There was no way of identifying problemsoccurring and reporting them to Tom for proper action. I wouldrecommend that new levels of authority be created to remove controlof the shop from the hands of one person (Craig, 2009). Once thelevels of authority are created, their mandate should be clear. Careshould be taken to avoid conflict of authority that can affect thebusiness negatively. To ensure the right action is taken whenever aproblems is identified, clear lines of reporting should be made.Those with authority should have a direct way of reporting to Tom forthe right action to be taken. Willie had his own motives to help earnmore by controlling everything. In this way, he was able to concealany problems from Tom. If there was a way of getting the informationto Tom, the problems would have been corrected and the clients wouldhave been happy.


Leadershipis about motivating and inspiring others to action. Leaders identifyan objective they would like to achieve. They inspire others in thebusiness to work towards attaining the common goal Unknown, 2014).Leadership is necessary to ensure that the activities of the businessdo not deviate from the set objective. People in leadership positionsreview the progress being made and ensure that everything is beingdone correctly. A good leader should interact with the rest of theteam to help create a good working relationship.

Whenselecting people to positions of leadership, their abilities aregauged depending on the circumstances they will be working in. It isimportant to select people with capacity to execute the envisagedtasks effectively (Unknown, 2014). Once leaders are selected, theydetermine the best approaches to use to help them achieve the goalsof the business. Leaders should be good at handling the problems ofother people. A good leader should pay attention to the opinion ofothers. This is one way of motivating the employees and making themfeel appreciated and important to the business. Motivated workerswill give their best towards the goals of the business.

Tomwas supposed to be the overall leader of his business. He wassupposed to maintain close contact with all of his twelve employees.Had this been happening, it would have been possible to identify theproblems before they became too serious. By depending on the reportshe got from the manager, Tom could not know the actual situation onthe ground. Although marketing the business was good, other areaswere also his primary concern. The success he has gained is becausehe was directly involved in running the business. The businessstarted to experience problems the moment Tom left everything in thehands of Willie (Craig, 2009). Although the manager was experiencedin the business, he had very different objectives from Tom’s. Hisobjective was to make more money for himself by making more savingsfor the business. Although this was achieved, it was done throughdubious ways that affected the quality of the service offered in thecafé.

Althoughthe business may be in problems, all is not lost. Various steps canbe taken to correct the situation. The following are myrecommendations to solve this matter effectively.

  • Create more levels of authority. Having only one person in control of everything is dangerous. The manager is having his own objectives different from what Tom wants to achieve. This can lead to wastage of resources and loss of business in the highly competitive industry.

  • The purchasing department should be created directly under the control of the owner. This is necessary to ensure the standards of quality are maintained. Quality of service should be high to ensure the clients are served what they expect. Provision of quality service is the main aim of the business. Therefore, Tom should be directly in charge of the purchasing department to ensure that the best is served to the customers.

  • Determine clear direct lines of reporting. The people holding authority in the new levels of authority should have a direct way of getting their reports to the owner of the business. This is the only way to make the owner aware of the problems being experienced so that timely action can be taken to avoid negative effects to the business.

  • As the leader of the business, Tom should hold regular meetings with the employees. This will help him know and bond with them more closely. Meetings helps to create a friendly environment that allows everyone to express themselves freely. Through the meetings, it will be easy to ensure that all activities are focused on the objectives set for the business. It also creates an opportunity to get the opinion of the workers that can help improve the way the business is managed.

  • The method of remunerating Willie is open to exploitation. More control should be used to ensure the amounts paid to him have actually been earned without compromising the business.

  • Establish a way of getting feedback from clients. Customers are the reason why the business exists. Therefore, it is very important to get feedback from them. Any complaints should be addressed immediately. The selected method should be very independent of the people working in the café.


Craig,S. (2009, January 29). Merrill Bonus Case Widens as Deal Struggles.WallStreet Journal.

Gomez-Mejia,Luis R. David B. Balkin and Robert L. Cardy (2008). Management:People, Performance, Change,3rd edition.New York, New York USA: McGraw-Hill.p.&nbsp19. ISBN&nbsp978-0-07-302743-2.

Unknown(2014). Principlesof Management 1.1.Washington, D.C.: The Saylor Foundation.