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National Conference on Spirituality and Ethics in Management

School of Management Sciences, Varanasi

Human Values and Management


Prof. Rahul B. Gajbhiye
Department of Management Studies Bapurao Deshmukh College of Engineering, Sevagram rahul_gaj123@rediffmail.com

Prof. Ram O. Panchariya


Department of Management Studies Bapurao Deshmukh College of Engineering, Sevagram ram_bdce@rediffmail.com

1. Introduction
Human values are necessary in today's management. Business is no longer confined to a national state but is really borderless. Hence business from the international viewpoint cannot be regulated by governments unless international agreements can be reached. In this "lawless land" the responsibility of the executive is greater than ever. Which values does he promote in her/his actions and decisions? Which responsibility does he take? Only towards the bottom line or also towards the growth of mankind? On a national level we find similar concerns with values in management. Being a generator and facilitator of human material wealth, does her/his responsibility towards human values end there? We do believe that the manager of today has a wider responsibility than that. We believe that it is in the interest of the managers themselves to have a heightened awareness of the values of humankind and also to promote them.

2. Human values: what are they?


Human Values are a general term referring to those things which people regard as good, bad, right, wrong, desirable, justifiable, etc. We can speak of 'truth values' ('true' or 'false'), and of value judgments which are statements about what is valued, sound, deplorable, skilled, etc. It useful to distinguish between technical, prudential and moral values. Prudential is cautious and use in conduct. It is often assumed or asserted that the value judgments ought not to be made in serious discussions, scientific discourses, etc. It includes feeling of love, hate, truth, affection, sacrifice, attachment, equality, non discrimination, kindness, respect, etc which again influences the behavior of the people at large. These values cannot be neglected in the mans society which also includes business

organizations as organizations are developed for the people not people are developed for the organizations. Business is driven by values. Values determine: y y What business people do? How others react?

Values are potent sources of conflict as well as of co-operation, control and self-control, through values, business can and does create value in the form of goods, services, employment, and much else. Some values prevent this process from working properly, or at all. It is also noted that in extreme cases business and whole industries can cease to function because their continued existence is inconsistent with certain powerful values. Some values are more defensible and constructive than others.

3. Meaning of Value Based Management


Generally value based management refers to that management practices which is entirely based upon the value. This value is defined in terms of stakeholders value and the firms value. The term stakeholders include customers, employees, government, shareholders, investors, environment, etc. Value based management is the management approach that guides, improves, maintains the value creation in a consistent manner. The term value means that can be measured in terms of monetary terms. Thus it correlates with the profit maximization, then wealth maximization, thereafter maximization of the value of the firm by developing best strategy, attaining competitive advantage, framing best decision in all spheres, continuous improvement attaining economies of scale, change management, innovations, etc. Thus it can be concluded that the VBM approach is a path breaking approach in management in the modern form of organizations and it is a continuous process which supports overall functions of the management i.e. planning, organizing, directing and controlling. Infect VBM is the better understood as the decision making at all the levels of the organization and also it recognizes the fact that todays business organization is multipurpose, multi-task, multi culture type of a large multi business corporations where with the help of matrix and balanced scorecard method value of the firm can be achieved in a more productive, efficient and profitable manner. Value based management approach is that approach of management which is overall based upon the values and the values refers to the maximization of overall value of the firm. It also focuses on the performance improvement which is required to achieve the objectives of the firm. Value based management is the tool of making best decision at the correct time to improve performance, to make correct strategy, to select best alternative, to perform outstanding at each level and also to apply innovations in a friendly manner. Value based management is the value driven approach that creates value , deliver value and manages value in a more sophisticated manner so that ultimate goal of the enterprise can be achieved. The value could be of shareholder, supplies, customer, human resource, etc i.e. in terms of its stakeholders of the firm. 2

4. Management by Human Values


People working in a society can be broadly categorized in to three groups. The first group is the performers. These are the people who perform in whatever position they are put. They believe that work is worship. They can be called Work Alcoholics. There is another group of people who always talk about money (Jaisa Daam, vaisa Kaam). They are ready to work provided they get "adequate compensation for the work. They are ready to put in more efforts if they are rewarded tangibly. These are Workable. There is a third group of people who do not want to work. They will do the minimum. These are passengers. They want to avoid work as much as they can. Believe it or not everyone works for the society. Everyone has right to live. Management by human values teaches managers methods to take work from second and third group effectively and motivates them to perform efficiently. My experience shows that Management by Human Values is an "in- born" quality of individual and every one cannot manage by human values. Only managers, with strong leadership qualities, love for human beings, and self discipline can motivate others for the Industry or Society. Family, society or community is part of Nation. Nation is part of World. World is part of universe and Universe is part of Cosmos. Very few individuals work for others without any selfish interest. I see so many persons exploiting others. I see some persons enjoying getting exploited on the other side. To deliver results for the society one must exploit and get exploited also. We should never forget that target of any living organization is to earn profit and pay taxes for the welfare of society. Industry is part of society and not vice versa. Greed, ego, pride, jealousy, hatred, selfish interests and other vices as per Dharma create problem for the growth of Industry or capital accumulation or Management by Human Values. Selfless worker can produce better, efficient results. Why? Because he may be transparent or without any ego. Although some times in management one has to exploit feeling of individual ego. One should understand the basic law of nature. One takes birth to help others and work for the society or nation. Society shall progress as per rules of nature. Someone may become rich poor; educated - uneducated; good- bad; selfish -selfless; leader - follower; saint -criminal etc. Death is the ultimate reality in life. And there is life beyond death. Scientists shall prove within 50 years or say 2060.

5. Types of Values
Values are of many types. It includes: Cultural norms: It represents the expectations of business clients and customers, legislators, employees, suppliers and the public; plus those that set the standards of technical skills in business, those that establish how company managers should manage the resources entrusted to them. Moral imperatives: That overrides all others. Moral values are deep-seated ideas and feelings that manifest themselves as behavior or conduct. These values are not so easy to measure or express in words. More general and controlling values: capable of judging the acceptability of the prudential and technical value. Example: (i) A business process is technically inefficient dangerous yet worth doing. (ii) A business process is technically efficient / safe -worthless. Ethical implications: It is often held-and rightly so-to be a moral and legal duty to exercise due care and skill, i.e. prudential and technical values. Values are collective representations of what constitutes a good life or a good society. 'Health' is a value, and 'self respect,' and so are 'democracy,' 'tolerance' and 'freedom. Managerial Values: Several studies have been conducted to study managerial values, one of the studies was the international study completed by George England in 1975, as it focused in depth, the importance of goods of organizations (like productivity, profit maximization, employee welfare, industry leadership, organizational stability, organizational efficiency organizational growth, social welfare), groups within organizations (like employees, customers, co-workers, superiors, subordinates, stock holders, etc.) and the personal goals of individuals. This study categorizes the primary orientation of the managers as: Pragmatic: Pragmatic is pertaining to public business or skilled in affairs (Individual has an evaluative framework that is primarily guided by success -failure considerations e.g. Will a certain course of action work or not? How successful or unsuccessful? Is it apt?). Moralistic (Ethical -moral code): Evaluative frame work consisting of ethical considerations influencing behavior towards actions and decisions, judged to be 'right' and away from those judged to be wrong, Affective (feeling): Suggests an evaluative framework guided by hedonism -one behaves in ways that increase pleasure and decrease pain. Hedonism is the doctrine that tells happiness is the highest good.

6. Different Approaches of Human Values


Like most basic areas of human knowledge and experience, the concept of human values defies definitions. Yet it can be instinctively felt, cognitively grasped, discussed as a shareable experience, and thus made a valid area of enquiry. This enquiry is a major under-current of the wisdom literature of all the ancient civilizations and of the later day philosophers, scholars and great leaders of social and political movements. The profusion of ideas, divergent approaches and intermixing of several strands of thought make the effort of conceptualizing human values a daunting task for modern scholarship. However, for a clearer understanding of the scope, significance and interrelationship of these ideas it is necessary to have a conceptual framework for classifying them. In the following paragraphs we make a humble attempt at this difficult academic endeavour. Classical literature does not make a distinction between values and human values. Perhaps there was no need for it then. Philosophical ideas on value enquiry were directed towards finding the nature, meaning and purpose of human existence. In the present century search for a theory of values has become a separate branch of modern philosophy and has been called axiology. Although the different realms of this value enquiry cover all areas of human concern like ethics, religion, art, science, social science, law etc., no separate or special significance is attached to the term human values. One main approach to this classical value enquiry we would like to call the ideal-normative approach. In the Western tradition it is represented by Plato's formulation of the absolute values of Truth, Goodness and Beauty. They are conceived as having independent existence of their own and are used as ideal norms for value judgement at the relative level of human existence. In the Indian tradition absolute values are related to the absolute reality whose nature is described as Sat, Chit and Anand. Attainment of a state of eternal bliss by the realization of identity of the individual self with the universal Self of this absolute reality is the highest and ultimate object of human striving. Closely related to this absolutist perception is the theistic view which may be called a sub-group of the idealistic-normative approach. It is based on a metaphysical belief system which accepts the reality of a divine cosmic order and faith in the authority of a creator God who is also the upholder of all values. The basis of all ethical, social and other human values is sought in the enduring truths, either revealed or obtained through super conscious insights of sages, contained in the sacred religious literature. Although differing in their belief systems, rituals and customs, the great world religions have a large area of agreement on the basic moral values, conceptions of personal virtues and social group behaviour based on humanistic values of love, brotherhood, caring and sharing. Many leaders of the Indian renaissance, e.g. Swami Vivekananda, Sri Aurobindo, Rabindranath Tagore and Mahatma Gandhi, were inspired by the absolutist-theistic value system and used it as the basis for their efforts towards the spiritual, social and political rejuvenation of the Indian society.

In recent times the term 'human values' has been used for this theistic approach to value system (Chakraborty, 1995a, b; Swami Ranganathanand, 1991). This is perhaps because of the need to highlight the universal humanistic aspects of this value approach, as against the merely speculative, mystical, or life-denying ascetic aspects. In the modern interpretation of theistic value approach the authors have shown its relevance and significance to the managers and other professionals. Another reason for the use of adjective 'human' before these values may be to distinguish this value approach from the modern, so-called scientific, approach to human phenomena and associated values. Interpreted in its narrow sense this scientific approach robs man of the dignity of his divine association, his spiritual nature and reduces him to a biological organism of a random collection of atoms. It denies any meaning and purpose to life and rejects all considerations of faith, belief, feeling and intuitive religious perceptions. This mechanistic, deterministic interpretation makes man merely a malleable automaton, to be 'programmed' to meet the demands of the existing socio-technological order, through manipulation of his lower order needs and desires. These empirical studies and researches on human values are not merely idealistic or intellectual exercises. They are purposive in the sense that the knowledge gained by them is sought to be utilized for practical purposes in diverse areas like, management science (leadership and team building, human resource development etc.), socio-political policy decisions (welfare programmes, race relations, positive action programmes for minorities, population control programmes, environmental policy etc.). Hence the use of the term purposive in the descriptive title 'empirical-purposive' for this approach to human values. Another way of classifying the different approaches to human values could be in terms of the level of aggregation they focus their attention on. These levels may be called the individual, the sociological and the ecological. The first level focuses on the individual human being, taken as an independent entity. Some illustrative value terms referring to this level are survival values, character, personal virtues, aesthetic appreciation, human rights, salvation, self-realization, etc. We thus arrive at a two-dimensional matrix for the classification of human values concepts. One dimension of this matrix consists of the different approaches and the other of the three levels of aggregation, shown as the horizontal and the vertical columns of the table below. Approach Level IDEAL NORMATIVE Theistic Humanistic Individual Sociological Ecological x x x EMPIRICAL PURPOSIVE x x x

Table 1: Two-dimensional classification framework of human values

It needs to be emphasized that the categories in this proposed classification scheme are far from being exclusive. In fact they very much overlap. For example many of the humanistic approaches have theistic foundations and many items of the empirical approach are reformulations of the idealistic approach. What is being implied in the classification is the identification of the main emphasis or main focus of the approach. The entries in the matrix indicate what we consider to be the main level(s) of aggregation which a particular approach focuses on. In our view the theistic approach focuses mainly on the individual level in its quest for making a "good" man, whereas the humanistic approach is concerned with both the "good" man and the "good" society. This is not to deny the sociological and ecological concerns of the theistic approach; however we feel that these concerns are secondary to that for the individual. On the other hand the different empirical approaches together cover all the three, individual, social and ecological levels. The progression in the above matrix, both in the vertical and the horizontal directions, has a chronological order. The earliest human value perceptions were related to the individual level. The growing complexities and tensions of the human societies enlarged the scope to include the sociological considerations as its second focus. And the disastrous impact of the rapid technological developments, coupled with the population explosion, of the present century has made ecological concern as the third focus. Once again this chronological flow has no exclusivity. The philosophical speculations and beliefs of the earliest civilizations, including the aboriginal civilizations in existence today, have remarkable sensitivity and insights about the nature and man's relation to it. However it is only in the recent times that the theme has acquired an urgency to prompt development of a concerted approach to human values in relation to ecology. Similarly many of the later day humanistic values have been traced to the earliest Upanishad idealistictheistic views on life and its value (Devaraj, 1988). Yet there is a general chronological flow from the absolutist, theistic view of human values to the humanist view and finally to the present day empirical view.

7. Why Human Values in Business Organizations


Scandals are now been a part & parcel of corporate world. Intact no other aspect of life continuously & consistently propagates ethics & transparency as corporate do. Now days, news about the Failure of corporate governance is heard in a very speedy manner in various parts of the world. Involvement of big corporate houses with various parties involved i.e. auditors, analyst, etc are seen frequently not only in developing economies but also in developed economies. Some recent examples of violating corporate governance are IPL, Satyam, Bhopal gas tragedy, IOC, Enron, etc. these misleading or fakeness created by the big business houses makes false impression to the company by any means. Therefore only implication of corporate governance in corporate world is not sufficient unless and until it is accompanied by the Ethics, Spirituality and human values in the modern business organizations. Also value based management is the appropriate approach to implement these values in the business.

8. Can human values be taught?


The question of interest to us is if human values can be taught to modern managers in any systematic way and, if so, to what effectiveness. S.K. Chakraborty, Management Centre for Human Values, Indian Institute of Management, Calcutta, has since 1983 been giving workshops on the theme "Human Values" on an in-house basis in many companies and as open workshops for managers from different companies and academics, mainly from India, but also from abroad. The impetus for this development is said to have come from managers at various management development programmes given at Indian Institute of Management in Calcutta, asking for Indian insights that could be valuable for organizations and management. The manager significantly affects, and is affected by, the value culture of the society, through the mediating agency of organizations and other social institutions. Proper appreciation of this value dynamics requires understanding, and interiorisation, of the operation of human values at the societal and ecological levels of our categorization. It is not clear as to what extent values at these levels can be developed and nourished through the present structure and approach of the human value workshops. An evaluation of the impact of the workshops, including long-term effects and effects on different levels of human values, may help clarify the position and lead to suggestions for expansions and alterations in the course contents as well as the methodology of the workshops.

9. Impact of Human Values on Business Organizations and its Decision Making


We know that resources are scare in relation to its demand and corporate decision makers are all concerned about the allocation of scare resources in such a manner that economies of scale can be achieved in the most productive and profitable manner. These decisions include investment decision, Dividend decision, capital structure decision, working capital decision, etc. In short each and every activity is valued and restructured at every stage in terms of maximization of the value of the firm continuously for its stakeholders. This ultimate goal is accomplished by the approach called value based management. VBM is based on the concept of changing the corporate culture with performance matrix and decision making tool for framing corporate strategies to evaluate decisions at various levels and also in cases of mergers, acquisitions, divestitures, demerger etc. Survival of the business is totally depends upon taking the right decision at the right time which is very crucial in this global market scenario. Also these values proves to be a motivating factor because right now everyone wants to be a millionaire very soon and this can be happen by taking short cut which is undesirable or unethical behavior of the people which proves fatal to the organization as a whole. Thus making use of ethics, spirituality and human value as compulsory in management will definitely prove to be helpful in curbing various disastrous acts from the corporate world.

Generally environment of business is divided into two i.e. internal and external. Now this environment also includes ethics, spirituality and human values which is again internal and external. Internal values include values that coexist among the people of organization, whereas an external value correlates with the values of the people who are from outside world of the business.

10. Issues and Challenges


There are lots of issues and challenges in the application of ethics, spirituality and human values due to its non monetary existence and business is viewed as without emotions and sentiments. Following are the issues and challenges: No time for such vales because business does not have any feelings or emotions Existence of Multi culture in the society Unable to understand the relation of values in business. Non existence of strict rules & regulations for values. Non existence of monetary gain in direct relation. Connected with the peoples emotions Conflicts in loyalty Competition for scarce resources which promotes unethical behavior.

11. Future of Human Values and Management in the Business World


In Business organizations, the importance of above values is felt in the minds of everyone but yet it is not realized as the inseparable part of management. As the outsourcing takes place with the advent of technology and innovations which helps in concentrating on core activities and transfer noncore activities to others for attaining economies of scale which brings people of different religion together for work and they exchange their beliefs, ideas etc while doing this we know that the values of each and every religion are same in terms of their meaning i.e. to always say truth, do sacrifice, selfless service, help poor ones, unity, avoid discrimination of any kind, have love and mercy for everyone, dont create violence of any kind, etc. and if all these things becomes mandatory to follow by every organizations then the number of scamps, frauds, misappropriation, etc can be minimized or even reduced.

12. Conclusion
The values based management can be better implemented by introducing human values in its 360 degree appraisal, matrix and balanced score card tools. If the peoples need of human values are attached into the business then the employees will be more loyal and faithful towards the organization and hence business will expand in varied terms. Therefore as the enforcement of CSR taken place into the corporate world with some set of principles, all aforesaid values should be enforced into the business with the help of human value based management.

References:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. C. S. V. Murthy (2006): Business Ethics: HPH [ISBN 81-8318-148-1]. R. P. Banerjee (2001): Ethics in Business & Management: HPH [ISBN 978-81-8318921-7]. U. C. Mathur (2005): Corporate Governance & Business Ethics: Macmillan [ISBN 140392-859-2] Conger, J.A. (1994). Spirit at work: Discovering the spirituality in leadership. San Francisco: Jossey- Bass. [ISBN #1555426375]. www.srimadbhagwatgeeta.com Chakraborty, S.K. (1991). Management by Values. Delhi: Oxford University Books. Chakraborty, S.K. (1995a). Human Values for Managers. Delhi: Wheeler Publishing Co. Swami Ranganathanand (1991). Human Values in Management. Delhi: Bharati Vidya Bhavan. Indian Journal of Management Issues, January, 2010. www.economictimes.com www.businessandeconomy.org www.valuebasedmanagement.net www.businessworldindia.com 10

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