Basics of value management

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Basics of value management

  1. 1. BASICS OF VALUEMANAGEMENTProfessor Jayashree SadriAndDr Sorab SadriJayashree Sadri and Sorab Sadri 2011
  2. 2. Before We Begin Let Us Be ClearWe are not speaking to young persons with aprocedural mindset, with a law or an accountingbackground.We are addressing future industry leaders andCEOs who must learn to look at the larger pictureand view reality in holistic terms.Jayashree Sadri and Sorab Sadri 2011
  3. 3. TO MAKE OTHERSBELIEVE IN YOUBEGIN TO BELIEVE IN YOURSELF ANDWORK HARD AT ACHIEVINGPERFECTION.YOU ARE A VERY IMPORTANT MANAGERAND DO NOT FORGET THAT.Jayashree Sadri and Sorab Sadri 2011
  4. 4. ACT YOUR PARTPLAN YOUR WORK AND THEN WORK YOURPLANYOU HAVE RECEIVED A LOT FROMSOCIETY. NOW IS THE MOMENT TO RETURNTHAT DEBT.NEVER COMPRIMISE ON YOUR VALUESJayashree Sadri and Sorab Sadri 2011
  5. 5. What is Management?Management comes from the Italian wordmanager which means the art of handling horses.Nowadays Management stands for the science ofdecision making and the art of decisionexecuting.Jayashree Sadri and Sorab Sadri 2011
  6. 6. What is Value? Value is a thought based concept that symbolizes aset of beliefs held by a person, a group of personsor an organization and by which the person, groupor organization is known for and stands by. It thusforms the basis of subsequent managerial actions.Jayashree Sadri and Sorab Sadri 2011
  7. 7. There are Two ConnotationsOf Value The Subjective Notion These are our valuesand this is what westand for to becounted. We base ouractions on thesevalues. The Objective Notion This is the value ofthe person, process orproduct and this isthe value added byvirtue of particularaction or decision.Jayashree Sadri and Sorab Sadri 2011
  8. 8. WHAT IS VBM?It is the practice of management such that theobjective notion of value as well as the subjectnotion of value are both achieved and organizationalgoals are met without giving up the humane touch.Jayashree Sadri and Sorab Sadri 2011
  9. 9. THE PHILOSOPHY OF VCM? Managerial Ethics forms the basis of corporatedecisions. Corporate Governance ensures that these decisionsconform to set norms, accepted values and meetstated objectives. The confluence of managerial ethics and corporategovernance leads to achieving businessexcellence.Jayashree Sadri and Sorab Sadri 2011
  10. 10. What is Ethics?Ethics are a pattern of moral behavior of aperson, a group of persons or an organizationwhich are in conformity with some assumedexplicit stated or unstated beliefs. It is thus anactivity based concept.Jayashree Sadri and Sorab Sadri 2011
  11. 11. SOME FINER POINTS How an organizationreacts in the face of anexternal stimulus andhow it relates to thesocial environment inrespect of what is goodor bad, right or wrongbecomes the concern ofBUSINESS ETHICS. In taking a decision amanager often faces anethical dilemma. Howhe reacts in the face ofthe dilemma and whatare his reasons fordoing so become theconcern ofMANAGERIALETHICSJayashree Sadri and Sorab Sadri 2011
  12. 12. WHY IS THE CORPORATE WORLDSPEAKING OF ETHICS?Every business needs the following traits inorder to succeed. Dependability Trust relationships Quality assurance Consistency MarketabilityThese five facets combine to permit a corporateentity to be accepted by stakeholders and somove towards business sustainability.Jayashree Sadri and Sorab Sadri 2011
  13. 13. IMPLICATIONEvery ethical business has these five traits and thesetraits are visible in their day to day action as well asin what issues they stand for and what characteristicsthey are known by. Hence being ethical becomes abusiness compulsion and especially so if the goal isto approximate excellence.Jayashree Sadri and Sorab Sadri 2011
  14. 14. The Logical Continuum Every thing in an organization is related to theexercise of power. The type of power is born out of the kind ofauthority exercised. How this authority is sustained leads us to thestudy of ethics.Jayashree Sadri and Sorab Sadri 2011
  15. 15. POWERThe ability to enforce a decision or to influencean outcome is called power.On its own power is neither good nor bad but itis how you use it that makes a difference.Jayashree Sadri and Sorab Sadri 2011
  16. 16. AUTHORITYWhen a thief relieves you of Rs 5000 at gun point andwhen the income tax man deducts Rs 5000 at the end ofthe month from your salary, the impact is the same andyou are equally helpless. So what is the difference?Jayashree Sadri and Sorab Sadri 2011
  17. 17. The Question of LegitimacyThe thief uses raw force that is not legitimate.The income tax man is only doing his duty and hisaction is legitimate.Power when legitimized becomes Authority.Jayashree Sadri and Sorab Sadri 2011
  18. 18. Kinds of Authority [Max Weber] Traditional : Culture Determined e.g. priest, parentand teacher. Charismatic: Personality Determined e.g. apolitical leader, a guru and an ideologue. Rational-legal: Structure Determined e.g.bureaucracy, status and hierarchy.Jayashree Sadri and Sorab Sadri 2011
  19. 19. Effect of those in Authority Why do somemanagers spreadhappiness whereverthey go? Why do somemanagers spreadhappiness wheneverthey go?Jayashree Sadri and Sorab Sadri 2011
  20. 20. HUMAN ACCEPTABILITYIT IS A BASIC HUMAN TRAIT THATETHICAL PERSONS ARE MORE READILYACCEPTED BY CIVIL SOCIETY AND ALLITS CONSTITUENTS.Jayashree Sadri and Sorab Sadri 2011
  21. 21. Business EthicsSoul Based ViewImprove yourself and thereby make others ethical.Everything depends on how the heart-soul-mindfunction.Mind Based ViewHold on to your values and respond to externalstimuli ethically. There is always a question ofrational-ethical choice. You are a manager not amissionary.Jayashree Sadri and Sorab Sadri 2011
  22. 22. Managerial Ethics When faced with a dilemma a manager canrespond in any one of the three modes of ethicalconduct. Non Consequential Consequential AcceptanceJayashree Sadri and Sorab Sadri 2011
  23. 23. NON CONSEQUENTIALMODE Some things are rightor wrong irrespectiveof the person involvedor the circumstances.{Immanuel Kant} When a moral issue isat stake the minorityof one is enough tomake a difference.{Georg F W Hegel}Jayashree Sadri and Sorab Sadri 2011
  24. 24. CONSEQUENTIAL MODE Personalized View If I take this decisionwhat is in it for me?How will I beaffected? Communalized View Will it be of benefit toall? Will the greatestgood to the greatestnumber be madepossible?Jayashree Sadri and Sorab Sadri 2011
  25. 25. ACCEPTANCE MODE If I can discuss thereason for my decisionpublicly then thatdecision is ethical.[S. Sadri] If others think I amacting ethicallynothing elsematters.[S. Jayashree]Jayashree Sadri and Sorab Sadri 2011
  26. 26. Ethical Modes & Kinds OfManagersConsequential : Usually successful, opportunistic andhighly materialistic.{the ends justify the means}Non Consequential: Trail blazers, history makers andtrue leaders.{always concentrate on the means, ends will follow}Acceptance: Yes men, apple polishers and the generalmediocrity.{cover your back and damn the rest or tick mark anactivity on your list and may the quality go toblazes} Jayashree Sadri and Sorab Sadri 2011
  27. 27. Jayashree Sadri and Sorab Sadri 2011VALUE AND ORGANISATIONS When an organisation looks upon value in thesubjective sense it is said to be value based. When an organisation looks upon value in theobjective sense it is said to be value driven. When an organisation looks upon value in bothsenses simultaneously it is said to be valuecentered.
  28. 28. Jayashree Sadri and Sorab Sadri 2011Needs of Value CenteredOrganizations A value centered organization aims to attainorganizational excellence. This organizational excellence is like a horizonone moves towards. Hence excellence must be converted into businesssustainability. For this having a system of good corporategovernance is imperative.
  29. 29. What is Corporate GovernanceSystems, procedures and institutions that ensurethat management acts in the best interests of theowners (shareholders)There is an ongoing debate about whether itshould be shareholders’ interest or allstakeholders’ interest (including employees,customers environment and community at large)that the management should serve.Jayashree Sadri and Sorab Sadri 2011
  30. 30. What is Excellence?Excellence is defined as a quality that anything(person, function or organization) has and which isof outstanding ability or possesses unparalleledmerit.Jayashree Sadri and Sorab Sadri 2011
  31. 31. How To View Excellence?In management sciences, in order to bemeaningful, the term excellence has to bemeasurable. If not it will remain vague andabstract. Hence we will reduce it in terms ofmeasurable units of· Quantity· Quality· Cost· TimeJayashree Sadri and Sorab Sadri 2011
  32. 32. Business Excellence is a macro concept and dealswith excellence of the entire industry within agiven market e.g. steel, cement, mutual funds,general insurance etc.Business ExcellenceJayashree Sadri and Sorab Sadri 2011
  33. 33. Jayashree Sadri and Sorab Sadri 2011Organizational ExcellenceOrganizational Excellence is a micro concept anddeals with excellence of a unit, a firm or aninstitution which exists within a given industrye.g. Tata Steel, Infosys, and Hindustan UnileverLimited.
  34. 34. THE LOGICAL CHAIN An environment of Business Ethics enablesManagerial Ethics to flourish. Managerial ethics facilitates good corporategovernance to be followed. Ethics and Governance combine to createconditions for achieving business excellence. Excellence remains a horizon to be movedtowards and must be concretized in terms ofbusiness sustainability.Jayashree Sadri and Sorab Sadri 2011
  35. 35. Jayashree Sadri and Sorab Sadri 2011This is the logical continuumof our argument.Thank You Very Much

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