11 Relevance of Human values in modern organization

Learning Outcomes
Introduction
Relevance of human values in management of modern organization Value based approach to modern organization and management
Value based management
Relevance of Values for Managers
Summary

1. LEARNING OUTCOMES

After studying this module, students will be able to understand:
Relevance of human values in management of modern organization Value based approach to modern organization and management
Value based management
Relevance of Values for Managers

INTRODUCTION:

Human values carry an important role in the efficient management and administration of any business enterprise. Any organization avoiding ethical values cannot exist in the business for a very long time. Thus, implanting a valid and strong value system in the administration of any business enterprise is must in the present time. Human values form an important aspect in all human conduct and behavior. As far as the behavior of managers is concerned, it makes a lot of difference how the representatives of the business deals with its stakeholders. Hence, human values can be considered as the guidelines or code of conduct for the mangers that they must respect and adhere to in the business organization. In fact, human values are the soul of management.

RELEVANCE OF HUMAN VALUES IN MANAGEMENT OF MODERN ORGANIZATION:

A holistic approach of Indian ethics and ethos are needed in the modern organization so as to integrate skill, knowledge, spirit and values in the work force in a more healthy way. Modern organization must integrate Indian value system to create a perfect model of complete human resource within an organization so as to ensure wholesome human progress. Thus, human value based holistic approach in the management of any modern organization will surely ensure all round wholesome human growth and development. As per the Indian culture and the ethics Indian follow, the satisfaction of inner mind of man is given first and foremost priority. All the focus is given to enhance and develop inner mind. Correlating this with the present work culture, faith and sincerity are the two needs of management philosophy. Work must be done in right spirit and in right attitude with pure perfection. An administration or management structure together with a combination of these values will surely assure harmony and progress in the organization and on the other hand will be successful in bringing prosperity for the society.

Therefore, values in management are very essential for modern organization to survive and sustain for a longer period of time. In modern management, business morals and ethics is a new buzzword that incorporates in itself all forms of values and ethical issues that helps to ensure well-being of any firm in the long run. Business ethics is an extended version for the concept of human value system that goes far beyond the economic profit and includes concept like employee value, customer value, supplier value, channel partner value, managerial value and societal value as well. Many of these values are not identifiable in monetary terms. Balanced scorecard methodology is one of the most popular methods for measuring and managing business value. A demanding concern of today’s economy is that human resource makes a lot of difference in business organization. Nowadays organizations try to employ and develop only those people who possess specified progressive competencies like creativity, innovativeness, integrity, adaptability etc. These competencies ensure that business strategies and relevant goals will be fulfilled while combining it with corporate culture and values. Major relevance point of human values for modern organization is as follows:

It creates a strong foundation for the management to follow a relevant business decision making process.
It helps in enhancing communication and efficiency of teamwork.
It helps to seek loyalty from partners, customers and other stakeholders. It facilitates to develop good knowledge of business elements.
It promotes innovation to enhance business competitiveness.
It improves the service delivery model for the business customers.
It creates a strong awareness for the value culture within the organization with a complete integration of business objectives.

VALUE BASED APPROACH TO MODERN ORGANIZATION AND MANAGEMENT:

In the present era, modern organization and management system demands more value based approach so that the customer base feels more reliable towards the organization. While some human values are universal i.e. fairness, honesty, integrity, transparency etc there are values within individuals also which can be combined with the pre-existing system so as to make the current system more effective. It is simply about each and every person to bring our core values to the work place and to conduct ourselves at work as we conduct ourselves at home or we want our children to conduct themselves. Ethics and human values begin at individual level and no system is ethical if the persons performing the task are not ethical. We cannot describe ethics as a policy manual rather they are the core value system inside each one of us.

However, for many organizations, CSR (Corporate Social Responsibility) today have become a lip service or something to show off. This demands a change. If the organizations remain successful in getting in touch with each and every section of the society they will be able to attend their stakeholders in a better way and will be able to create a contributory culture and when this kind of culture blossoms, employees can work even more ethically towards their goals. In simple words, when an individual’s mind is calm and stress free, he or she acts in a more ethical manner. Thus, this process simply starts with the individual to become more aware and stress free which ultimately becomes the basis of creating strong teams for taking responsibility of organizational growth and development.

Most of the decisions taken in the organizations are somehow based on values. Every organization is involved in making decisions on regular basis. The first stage in creating values system is to find out what are the values of employees. The second stage is to find out how employees perceive the values of their organization. When the values of an individual are same as that of their organization, then there is value alignment and vice-versa. Values are the ideals of an individual’s personal importance. However, to be successful in an organization, managers need to learn and adopt values and also learn a set of values that are part of the organization’s culture. When individual values and organizational values are parallel, then they together become highly operative responsible for the organizational growth and prosperity.

VALUE BASED MANAGEMENT:

Value-based management (VBM) is the lynchpin of a sustainable business development model and it is a customer-focused system which is build upon shared principles and core values, which is designed to implant an ownership culture within an organization. Value-based management follows the market oriented theory of economic justice which was first developed by the employee stock ownership plan i.e ESOP inventor Louis Kelso and the philosopher Mortimer Adler.

Many practical experiences and studies shows that where value-based management culture have been implanted in the organizations, the human resource present there have become more empowered to make decisions there, maintain a proper disciplined behavior and work together as a team more efficiently. It is the value-based management which offers the working class an opportunity to participate as an important stakeholder in the company’s growth as well as in the profits of the organization. Value based management allows the company to unite each and every party interest around the company’s goals and corporate values.

Value based management approaches a new philosophy of leading the followers. It holds a theory that an effective leadership searches for ways and means to empower other and making them realize their hidden potential and is not induced by power. A well defined and designed VBM system sharpens and crystallizes the leader’s philosophy around a set of universal moral principles. With this participatory kind of culture implanted in the organization, the foundation is itself laid for the working effectiveness of the organization. Such kind of culture typically involves employee stock option plan, formula based cash profit sharing, ownership education regarding sharing of financial information, participatory management and governance etc.

Relevance of Values for Managers

Management systems which apply values in its operational activities always achieve greater output. Modern era is an era of complete knowledge and information, where every section of our society is becoming more and more aware of their rights as well as responsibilities. There was a time when the top officials of the concern could do anything to increase their profits and the stakeholders have no say in influencing the corporate affairs. Now the whole situation has changed. The reason being increased awareness level. It was in the middle of the twentieth century that the need for socially responsible and ethical behavior of the corporate managers gained importance. It was soon realized that business owes so much to its stakeholders and society at large and therefore, managers need to be ethical and responsible in their behavior. They must took certain steps and follow practices which observes value while taking decisions that impact and influence organizational stakeholders as well as society. Hence, human values are of utmost importance for modern day managers. Following are the reasons:

i. Values help managers to realize their social responsibility. Many organizations find it wise to go beyond their primary mission and take into consideration the needs of the community. Business ethics and values make managers more accountable for social responsibility.

ii. Knowledge of values and business ethics will help managers in resolving ethical issues will help managers in resolving ethical issues or dilemmas as and when they arise. The complete knowledge of values facilitates the managers in setting highly responsible tone for the organization-in individual judgments and decisions, whether ethical or otherwise.

iii. Young managers must understand and get them aware with moral principles. These are helpful in following a rational ability while taking decisions. It becomes a vital part of ensuring that managers comply with the company standards for conduct.

iv. The study of human values and related business ethics generates a high level of integrity in managers. The ultimate objective of ethical knowledge is to share knowledge, build skills and develop minds. It helps to gain clarity and insight into business ethics and to avoid business misconduct in organizations.

v. The study of human values and related business ethics facilitate managers to arrive at a decision that they feel right and just. It facilitates individual to understand their moral standards, ethical norms, beliefs and values so that they can decide when faced with business dilemma.

vi. The study of business ethics provides conscientious mangers with a morally responsible approach to business. The need for responsible manager is acute as questions of business ethics cannot be entirely determined by law and government organizations but must remain the concern for individual manager.

vii. Knowledge and awareness of the concept and practices of business ethics and values is equally helpful to practicing managers in managerial conduct and decision-making.

viii. Business ethics improves the skills of reflective managers both in analyzing concrete moral issues and in deliberating and deciding upon strategies for solving moral dilemmas.

ix.Business ethics create awareness of social and moral values through education. This is pertinent in contemporary business scenario because of increasing erosion of essential values and this increasing cynicism in society is leading to violence, superstition and fatalism.

Respect for individual Cooperation and trust Non-Jealousy
Purification of mind
Top quality product/service Work is worship
Non-covetousness
Ethical & Moral soundness
Self discipline & Self restraint Customer satisfaction
Creativity
Giving inspiration to other
Detachment from selfish demands

Values for Indian Managers

IMPLEMENTATION PROCESS OF VALUE BASED MANAGEMENT:

Modern organization following a system based on values, ethics, ethos and certain moral principles taking care of the rights and responsibilities of its stakeholders can be describes as a system based on value based management. Value based management is a customer-focused system built upon shared principles and core –values, which is designed to implant an ownership culture within an organization. Through a culture of workforce participation, the basis for sharing culture within an organization is developed. Such kind of culture typically involves employee stock option plan, formula based cash profit sharing, ownership education regarding sharing of financial information, participatory management and governance etc.

Value-based management acts as an inter-disciplinary between universal moral values and material values. It offers for maintain a system of values and principles prompting economic justice in a globally competitive market. It facilitates the managers to recognize the value of each stakeholder like customer, suppliers, dealers, workers and society. The main economic purpose of value based management is to help empower people and raise their dignity and quality of life.

What is VBM?

A focus on the holistic management of the organization.
Emphasize designing values as defined by its stakeholders as well as management.
Development of strategies and value creation by managing processes, activities, jobs, compensation and organizational structure.
Using analytical methods, facts, communication technology in an integrated manner.

SUMMARY:

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REFERENCES:

Pramod Sharma, “Business Ethics and Corporate Values: An Indian Perspective” Ravitanaya Publications, Shimla, 2017
S.K Bhatia, “Business Ethics and Corporate Governance” Deep & Deep Publications, New Delhi, 2004
A.C. Fernando, “Business Ethics and Corporate Governance” Pearson Publication, 2013 Harris & Hartman, “Organizational Behavior” Jaico Publication House, 2002
French, Bell & Vohra, “Organization Development” Pearson Prentice Hall Publication, 2009
S B Gogate, “Human Values & Professional Ethics” Vikas Publishing House, New Delhi, 2011