Diff. Business by Indian Values

8/9/2019 Diff. Business by Indian Values

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INTRODUCTION

Indian subcontinent since time immemorial has been the abode of spiritual bliss. It has shown thwisdom and harmonious peaceful coexistence to the rest of the world. But as the time passed byinfluence of materialistic western lifestyle, Indian society is now characterized by degradation in moral standards. In a recent survey by Transparency International, India tops the list in the Pay

Bribe Index and is also adjudged as one of the most corrupt countries in the world. Business is aparcel of the society and is also no exception.

Traditionally, businesses have placed the highest priority on making money concern for emplohuman values has typically received less attention. This is evident from the Norwegian term for administration: "konomi og ledelse" which puts "economics" before "leadership". In a Financial7-8, 2003) interview, even the grand old man of conservative economics- Milton Friedman conuse of quantity of money as a target has not been a success". Inline with this, a 2003 survey byArgument Group, found that three out of four Norwegian executives reject that a corporation's sresponsibility is to give the owners the biggest possible profit.

Money, therefore, is not the only goal of business in fact it is not the major goal. Money is nee

everything in the world, but it is not enough for living a really good life. Man needs a purpose beA 2004 survey by Roffey Park & Management Today of 750 managers and board members foundto 70% of them were searching for a deeper meaning in their job.

In contrast to money driven businesses, value based organizations practice leadership and manathrough shared productive and ethical human values. Within this broad framework, self-managincan be left to experience and display high levels of meaning, enthusiasm, initiative, creativity, inhappiness and self-organization for the benefit of themselves and their corporation. Such orgarealize and live according to the principle that their associates are their greatest assets. The basputting man first is beautifully expressed in the German philosopher Immanuel Kant's Third CateImperative: "Act so that you treat humanity, whether in your own person or in that of another, aend and never just as a means. "

Of course, value based management also includes making money. It is not a question of either mmoney. It is a quest for both happiness and profit. Research shows that value based or visionaryperform on a markedly higher level they earn much more money than merely profit-based cthe above backdrop, the present article is prepared with the following objectives:-

* To throw light on what is value based management.* To provide ideas on why to use value based management.* To give details on practices and procedure on value based management.* To throw lights on value based management in Indian context and attempts to highlight the Vdifferent sections.

Section-I deals with the concept and historical perspective, Section-II highlights the dynamics o

implementation process and the Section-III reflects VBM in action and the conclusion.

SECTION-I

Value Based Management has been defined in different ways:

Value based management is the management approach that ensures corporations are running o(normally maximizing shareholders value). Value based management includes all the three of th


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* Creating values (ways to actually increase or generate maximum future value, strategy).* Managing for values (governance, change management, organizational culture, communicatioleadership); and* Measuring values (valuation).

Value based management aims to provide consistency of the corporate mission (business policycorporate strategy, corporate governance, corporate culture, corporate communication, organizastructure, decision processes and systems, performance management processes and reward prsystems.

Value based management can be simply stated as management system in which entire organizafocused, measured, compensated for creating value for stakeholders (i.e., customers, shareholdemployees, vendors). Value-Based Management (VBM) is a customer-focused system built uponprinciples and core values, which is designed to instill an ownership culture within an organizatio

The value based management is managing and giving values to all stakeholders. They are as fol

ORGANISATION* Encouraging a working climate with innovation & free exchange of ideas.* Demonstrating personal integrity & humanity.

SHAREHOLDERS* Protecting and safeguarding their investment.* Ensuring them a fair return

EMPLOYEES

* Understanding & acceptance of the needs and rights.* Providing adequate wages, good working condition, job security, effective machinery for speeof grievances.

* Suitable opportunities for promotion and self development.* Creating a sense of belongingness & team spirit through their close link with management.

CUSTOMERS

* Products with proven quality at fair price.* Fulfilling its commitments impartially and courteously with sound business principles.

GOVERNMENT* Confirm national interest as mentioned in government policy.

COMMUNITYSocial responsibility-

* Effective use of natural resources* Assistance in community affairs.* Assistance during natural hazards.

VALUE BASED MANAGEMENT: A HISTORICAL PERSPECTIVE

The history and development of Value Based Management (VBM) and the growth of internal andcorporate complexity over time are highly interrelated. This is only logical if one realizes that VB


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a philosophy enabling and supporting maximum value creation organization.

Before the industrial revolution, companies were relatively small and their internally complexity the external environment of companies was relatively stable and clear. Value creation was relatistraightforward, simple and obvious. There was no need for VBM.

IMPLCIT VBM (1800-1890)

The earliest forms of implicit "VBM" dated back to the end of the 18th century, when, by mechanthe Industrial Revolution, it was possible to achieve economies of scale through investing in machiring workers. The dislocation of facilities made direct supervision harder and insight into the efproductivity of the production process became more important. During the19th century, these mgradually improved, using improved transportation and communication mechanisms available. Twere aimed at promoting and evaluating the efficiency and productivity of decentralized productand not on measuring and managing value creation as such.

EXPLICIT VBM (1890-2000)

At the end of the19th century, Alfred Marshall sees profit as the residual income accruing to a firmreturn to the investment of his own capital and to the pains he suffers in exercising his "businesplanning, supervision and control. Frederick Taylor (1911) and Harrington Emerson develop ScieManagement (using detailed physical manufacturing standards, enabling a simple translation to standards).

Corporations become more complex with a diversified product assortment and activities. Allocatover the various activities and as a result, better information on these activities becomes more iManagement Accounting introduces Return on Investment (ROI), at first, only at top manageme

allocating resources and judging performance.

In 1938, Grant makes some references to using the time value of money for deciding among invoptions. In 1954, Dean publishes an article in the HBR about use of Discounted Cash Flow (DCF)for valuing investment proposals and other decisions. Later, also methods are introduced such aincome, responsibility accounting and transfer pricing.

Professional Investing In 1964, Sharpe introduces the Capital Asset Pricing Model (CAPM) and


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Black and Scholes introduce their formula for calculating the value of financing options.

In 1964, Peter Drucker writes "Managing for Results" and in 1986, Alfred Rappaport writes his gbreaking book "Creating Shareholders Value". In 1994, Jim Taggart uses the term "Value BasedManagement" in his book "The Value Imperative: Managing for Superior Shareholders Returns".

on, thinking in Shareholders value term is firmly rooted in business and corporate strategy.

SECTION-II

IMPLEMENTATION PROCESS

As a company implements Value based management, it will need to accomplish three steps: gaicommitment, customize the VBM framework, and finally, makes VBM a way of life in the organiz

GAINING TOP MANAGEMENT COMMITMENT

VBM is similar to all other initiatives in one respect. Senior management needs to support VBM w

words and ultimately with their actions. It is up to the senior team to create a sense of urgency initiative and clearly communicate a vision of the impact that VBM will have on the organization.they must make the reasons for VBM simple, clear and compelling. Anything less than the full cothe senior team will ultimately cause the initiative to fail and simply become, another "Program month", that does not achieve the intended results. The organization will spend a lot of time, moenergy without receiving adequate returns from the VBM investment.

DEVELOPING A CUSTOMISED VBM FRAMEWORK

Implementing VBM requires an organization to redesign its management practices. The key manpractices are performance measurement, compensation design, planning/budgeting and trainingcommunication programs.

* Performance Measurement

The first step in customizing a VBM framework is to abandon accounting based metrics and definbased measure, such as economic profit, as the key performance metric of the company. The ovgoal is to improve economic profit over the long-term. When a firm takes the long term view, iimperative to act in an ethical and socially responsible manner. Anything less may improve shorprospects but will not lead to long-term success.

Less is more when defining the measure. While the measure needs to be grounded in financial ththe complexities to a minimum. Remember, if improving economic profit is the goal of the organpeople need to understand how it is calculated and ultimately how they can make decisions thateconomic profit.

* Compensation Design

If the incentive plan is not adequately tied to value creation, a disconnect will occur between theshareholder value and the manager's compensation. This disconnect may cause the actions of thto not be in the best interests of the shareholders. Some key characteristics of value-based incecompared to traditional plans are uncapped bonuses, targets based on market expectations, andbonus bank. A plan with these characteristics encourages participants to think like, act like, and


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owners.

* Integrating Performance Measures into planning framework

The new performance measure needs to be at the heart of key management processes, such as

planning, and capital allocation. A good exercise during the budgeting and planning process is tobusiness units calculate what level of bonus will be paid out if projected performance is met. Thiexcellent way to move from a "manager" mindset to an "owner" mindset. When organizations doconsistently make decisions using the new performance measure, a mixed message is sent to thorganization about the organization's overarching goal. This mixed message will lead to confusiothe key objective of the organization is.

* Initial Training and Communication Plans

The organization needs to develop a plan and the necessary material to communicate the impormanaging for value and the basic concepts of VBM. People in the organization need to understanof economic profit before they can be able to apply the concepts to daily decisions. An organizat

develop a new reporting package that is easily understood by finance and non-finance employeeresults need to be communicated visually, timely, and accurately.

The initial training provides the opportunity for employees to understand new concepts and begiideas around how they can make decisions that are more in line with value creation. Communicaresults will provide the necessary feedback to the organization about how their actions are impashareholder value. Lack of feedback on how actions are impacting value will disrupt the learningsignal a lack of importance around the initiative, and ultimately cause the initiative to lose mome

MAKING VBM A WAY OF LIFE

Companies must integrate VBM into their culture. VBM cannot be thought of as just an initiative a way of life. VBM needs to become a part of the drinking water, so to speak, meaning we have efforts to ensuring that everyone in the organization understands his or her role in creating valuorganization. This begins at the top of the organization and needs to be cascaded down the entirorganization so each individual understands the big question, "How does our company create vathe even more relevant question, "How does my role and the daily decisions that I make impactreach this level, the organization will need to devote a significant amount of resources to providenecessary learning, tools and feedback required so all individuals can understand their role in vaIf you can lead your company to a place where everyone in the organization can answer the aboyou are well on your way towards developing a culture focused on value creation.

Value-Based Management is an ethical framework for succeeding in business. As such, VBM balavalues with material values.

Value-Based Management's three notions of value are:

* A foundation ofshared ethical valuesstarting with the belief in the intrinsic value of each employee, customer and supplier).* Success in the marketplace based on delivering maximum value (higher quality at lower pcustomer.* Rewards based on the value people contribute to the company, as individuals and as a tworkers and as owners.


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The ethical and material aspects of value can be realized in a business by:

* Creating structures of corporate governance and management based on shared moral valueexpressed in a written set ofa. company core values (ethical principles which define the culture and clarify the social purpos

organization); andb. a code of ethics (a set of habits to be encouraged to guide individual behavior toward strengcompany's culture and interpersonal harmony).

* Ideally these core values and code of ethics are agreed upon by consensus by every person incompany, and are subject to periodic review and improvement (as with Herman Miller Inc.'s "renprocess"). These serve as the "compass" for guiding corporate objectives, policies, and other dealso provide a basis for judging people's behavior.

* Maximizing value for the customer (those being served), by increasing quality and/or decreas(This relationship can be expressed as V=Q/P.) Within a VBM culture, everyone in the company a primary core value "service to the customer;" not only because as a person, each customer detreated with dignity, but because ultimately it is the customer who "signs" every employee's payV=Q/P thus becomes the simple formula for any business to follow to succeed in the competitivemarketplace.

VBM is designed to "institutionalize" shared responsibility, shared risks and shared rewards withcompany's ongoing structures and processes.

BENEFITS OF VBM

* Benefits of VBM for ManagementBy moving from an autocratic to a more participatory, value-based mode, a company's leadersharound some of management's typical operational "headaches."

* Benefits of VBM for employeesA workplace that operates according to the principles of Value-Based Management empowers emworkers and as owners. VBM creates a corporate culture where work can be more satisfying andeconomically rewarding.

* Benefits of VBM for Labor Unions

VBM involves the transformation of labor unions, offering labor representatives new and more imroles than they have played within the adversarial wage system culture. Unions can help deliverdegree of economic justice and far greater rights for their members than the "crumbs" now bargwithin the framework of traditional labor-management bargaining.

* Benefits of VBM for the Company as a Whole

Experience within a growing number of companies indicates that the more that people's self inteunified within a management system reflecting the principles of Value-Based Management, the gcustomer and employee satisfaction will be. From this can flow increased cost savings, increasedincreased profits.

A BRIEF SURVEY OF LITERATURE

In the extensive literature survey it was found that the foreign research scholars have contribute"VBM" than the Indian research scholars. The value systems were quite different for the differen


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different companies and different countries. The following articles are covered under the literatu

The Care of VBM systems (2003) by Harley E. Ryan, Louisiance State University aimed at findingfirm significantly improves adjusted residual income after adopting value based management. HVBM improves economic performance; it highlights inefficiencies and need for improvement in co

contacts. VBM is more effective for high growth firm than for low growth firms. VBM encouragesof the invested capital. Firms with high net working capital improve economic performance afteradopted VBM. Effective corporate governance includes use of monitoring and incentive mechanisencourage the creation of shareholders value. VBM attempts to accomplish the goal by providingwith the set of decision making tools that identify alternatives.

* Word Whitt, Dept. of Industrial Engineering and Operation Research, Columbia University, Nearticle "The Impact of Increased Employee Retention on Performance in Contact Center for Custthat VBM as regards to employees is very important and contact center performance has often hlow employee job satisfaction as evidenced by high turnover of employees and giving them som

* Department of Energy, Office of Project and Fixed Asset Management inLife Cycle Asset Mana

(1997)viewed that "VBM is not just a good idea. It's the law," whereas Frederick Taylor (1911the past, man was first and in future, the system will be the first."

* Tad Leahy in 'Making their Mark'(Business Finance) views "VBM, like any new technological input in place at your company, is like a loaded gun, so you need to be careful about how you pupeople's hands," Newer companies have an easier time with value-based management than oldehave outdated, hard-to-remove legacies

* In "Transformational Leadership: Peer Mentoring as a Value- Based Learning Process"-Mary Asees values as the foundation for organizational life. The connection between individual wants anpublic values are at the heart of transformational leadership. The Leader who can achieve congrbetween individual and organizational needs in a change initiative is very likely to be successful.

SECTION III

VBM IN INDIAN CONTEXT

Gita Piramal selected the top legendary business houses in India on the basis of following VBM c

* Not rags to riches, not because of their personal triumphs but for the impact their work and ethousands of ordinary lives.* For producing products and services which are globally competitive.* Modern mind. Traders think of today's profit, an industrialist looks at tomorrow's balance shelegend thinks of the next generation.* Who go out of their way to encourage other entrepreneurs to start new businesses?

* Pioneering spirit: don't take the easy road to prosperity but hack roads through jungles, buildvillages, transform barren tracts of land into profitable assets, change mind-sets, pioneer industservices.* Commitment to education.* Patriotic entrepreneurship/economic nationalism. During the earlier Raj they fought for the Indian entrepreneurs to exist and vociferously criticized economic racism. Today they register patents in USA etc.


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TABLE SHOWING THE VALUE SYSTEM IN INDIAN COMPANIES

NAME OF THECOMPANY

FOUNDER PARAMETERS

TATA GROUP J. R. D Tata Tata ethos-ideals and traditions

Sound and straightforward business principles. Commitment towards the interests of the shareholders.

Health and welfare of the employees.

Generous towards people.

RELIANCE GROUP DhirubhaiAmbani

Huge production and best quality of output with cheapest price.

Think big, think fast, think ahead.

Introduced the equity cult to thousands of ordinary Indians.

AMUL Verghese Kurien Professionalisation of farming.

innovative process

Use of qualitative equipment.

Constructive social change in rural areas.

Empowering the rural masses.

Information and infrastructure.

BIRLA GROUP G D Birla Commitment to untested values.

Humanity and tolerance for the weaknesses of others.

Taking risks.

ZEE TV SubhashChandra

Fully committed to current concepts such as shareholder value, and value-bamanagement (including out-sourcing, employee stock options etc.)

Quality products at competitive prices.

Challenged government vision of what people want from electronic entertainm

BOMBAYSPINNING MILL

CawasjiNanabhoy Davar

Factory system with factory labor.

Led the way for other entrepreneurs to enter industry.

MITTAL STEEL L N Mittal Unique mix of cultures in the management team: takes best from each count

Open discussions -Asks everyone to tell top management what problems are should be the solutions. Then instills discipline that what has been decided mperfectly.

INFOSYS N R NarayanaMurthy

Ethical business practices and transparency

WORLD TEL Satyen (Sam)Gangaram

Pitroda

Access to telephone lines for ordinary people

HINDUSTANLEVER.

Prakash Tandon Professional management

Source: The Millennium Special; the Past the Present & the Future-Gita Piramal, rediff on net

Today, value based management is very important and the aspects are ethics and transparencyinnovativeness, quality and depth of management, financial performance, quality of product andglobal competitiveness and people practices & talent management. The bright example is the rafor the top 25 companies as shown below:-


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* INFOSYS Technologies has bagged the number one position and for the fourth time it is againa record of sorts (2001, 2003, 2004, and 2006).

* The survey also reveals that reliance is rated on second on financial performance but has bee10th on ethics and transparency. Nevertheless, the fact that reliance did not slide down a lot furt

the Ambani family washing dirty hands in public is a testimony to the mystique of Ambani brandthe only company that has featured in the top 10 of every most respected company's survey sin

* Another fascinating fact found was that, people tend to express respect for the Tata Group asnot for any individual TATA company. I.e. only 'Tata'. It was in second position in infrastructure done well in ethics and transparency.

* SBI the country's biggest bank with nearly 14000 branches was in third position in banking seuse of technology and focusing more on medium sized business and advertising campaign.

* Increasing competition and internal strife have turned AMUL slightly bitter but it remains a fowith due to better quality of products.

CURRENT

RANK

PREVIOUS

RANK

COMPANY TOTALSCORE

INNOVATIVE-NESS

QUALITYAND DEPTH

OFMANAGEME

NT

FINANCIAL

PERFORMANCE

ETHICS'AND

TRANSPARENCY

QUALITY OFPRODUCT

ANDSERVICES

PEOPLEPRACTICES

AND TALENTMANAGEMEN

T

CO

1 1 INFOSYSTECHNOLOG

Y

18,124.2 2,230.2 2581.0 2778.2 2772.3 2315.7 2623.4

2 3 WIPRO 10,218.5 1,052.7 1,435.9 1551.4 1590.3 1235.5 1636.6

3 2 RELIANCEINDUSTRIES

9,118.8 1,276.5 1,317.5 1969.6 1021.4 1007.4 1132.5

4 9 ICICI BANK 8,911.2 1,528.3 1,381.8 1211.6 1166.9 1200.5 1229.6

5 13 TATACONSULTANCY SERVICES

8,474.5 822.8 1,232.0 1210.3 1445.7 976.6 1323.3

6 5 MARURTIUDYOG

7,690.9 1,012.1 1,069.6 1010.5 1047.2 1357.7 1061.2

7 21 ITC 7,154.2 938.5 1,167.3 1120.4 1004.4 943.4 1116.0

8 7 HDFC BANK 7,097.9 1,091.9 1,126.3 956.3 1076.4 1000.2 1029.5

9 12 TATA MOTORS 6,357.9 647.9 982.8 780.2 1202.3 997.5 848.2

10 14 LARSEN & TOURBRO

6,331.8 662.2 924.8 940.0 1027.5 926.4 937.4

11 23 NOKIA INDIA 6,286.2 1,213.4 700.1 605.6 675.3 1156.2 887.4

12 26 BHARATIAIRTEL

5,969.4 1,064.6 872.3 902.7 690.0 880.1 822.8

13 17 OIL ANDNATURAL GASCORPORATI

ON

5,952.3 687.1 944.9 996.6 836.6 694.3 799.2

14 8 JET AIRWAYS 5,860.9 978.2 797.1 532.1 689.0 1086.4 805.615 18 HERO HONDA

MOTORS5,798.3 863.8 763.0 993.0 697.9 915.1 784.4

16 15 TATA STEEL 5,751.9 499.2 846.9 765.0 1182.6 736.2 850.0

17 4 HINDUSTANLEVER

4,863.1 629.0 780.0 621.3 716..3 707.8 811.1

18 11 GCMMF(AMUL)

4,659.2 967.7 625.0 450.1 721..9 923.4 527.0

19 10 RANBAXYLABORATORI

4,433.2 655.9 622.9 692.6 561.7 639.0 630.4


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ES

20 20 BAJAJ AUTO 4,309.2 689.1 629.2 725.7 551.3 675.9 474.9

21 24 CITI BANK 4,155.7 746.7 680.4 495.1 412.0 568.3 695.2

22 16 STATE BANKOF INDIA

3,939.8 451.7 578.9 699.8 703.7 478.7 494.2

23 6 DR. REDDY'SLABORATORI

ES

3,527.2 624.1 495.0 630.1 428.2 432.1 445.3

24 32 NEW DELHITELEVISION

3,457.7 618.8 489.8 395.9 417.0 592.1 573.3

25 22 INDIAN OILCORPORATI

ON

3,431.0 426.0 497.1 574.1 489.7 491.8 480.0

Source: Business World , 5 June,2006 p.54

RANKS OF SELECTED COMPANIES IN INDIA'S 100 MOST VALUABLE BRANDS

Rank Company Image andperception

Brandawareness

Brand loyalty Brandassociation

Brandperformance

Ove

4 INFOSYS 3.897 3.463 3.120 3.183 9.776 2

8 TATA 3.732 3.630 3.252 3.382 8.998 2

14 ICICI 3.705 3.667 3.248 3.238 8.534 2

41 RELIANCE 3.179 3.793 2.969 2.668 6.723 1

50 SBI 2.863 3.687 3.064 3.196 6.122 1

72 LIC 2.660 3.533 3.279 2.633 5.412 1

97 AMUL 2.142 2.511 2.551 2.554 4.274 1

Source: 4p's Business & Marketing July 2006

* Infosys manages to snatch top slot in this ranking criterion. It stands for integrity, trust and epractices. Infosys is the company that is not just a back office of international companies, but ththat can be trusted to provide customized solution that have international excellence. It has beeone of the most "innovative" companies in the world.

* TATA brand represents a sense of nationalization, reliability, assurance and a true value for mthe brand Tata can be termed as a brand that represents leadership with trust. The heritage of return to the society that it earns has evoked trust amongst the consumers, employees, sharehothe community.

* Reliance today, conveys a titanic empire emerging as a true blue multinational .In spite of theand the controversy in early 2006, when the two Ambani scions Anil and Mukesh decided to go sways, the emergence of Reliance, with definite conviction, does reflect the parallel rise of the naprivate sector from behind the shadow of the public sector enterprises.

* SBI is today hailed as the big daddy of Indian banks as it touches the lives of people from Kaskanya kumari and building the nation with the enormous welfare activities. The bank has evolvesynonym of trust, reliability, and credibility. From a fuddy- duddy sluggish employee image to t

being customer friendly, India's largest bank SBI has come a long way providing various producservices. The investors are emotionally connected with the tagline of SBI "We have the power of

STEEL AUTHORITY OF INDIA LIMITED

SAIL is the largest public sector steel industry with vision "To be a respected world-class corporaleader in Indian steel business in quality, productivity, profitability and customer satisfaction" anthat


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* Building lasting relationship with customer based on trust and mutual benefit* Uphold highest ethical standards in conduct of their business* Create and nurture a culture that supports flexibility, learning and is proactive to change* Chart a challenging career for employees with opportunities for advancement and rewards.

* Value the opportunity and responsibility to make a meaningful difference in people's lives.

TATA GROUP

The TATA Iron and Steel Company were India's first and the largest steel company in the privateToday, Tata steel ranks among the worlds top steel company and has emerged one of the lowesof steel of world. The values and the work culture were imbibed by the legendary J.R.D Tata whthat whether in business or life, it was people which matters the most. Tata steel values viz. "reindividual" "credibility" and "excellence" are demonstrated in everything it does. TATA has madetowards employee relations, environment, corporate governance and community.

AMUL CO-OPERATIVE

The Brand name AMUL from the Sanskrit word "Amoolya"meaning priceless, has really become of many things; specifically "the taste of India". AMUL was established in 1971 and since then haleadership position in dairy products and now the big daddy in market. This CIO International ITAward has recognized the Cooperative Movement & its Leadership under the "Amul" brand, initiaKurien, Milkman of India, who's main Motto is to build Indian Society economically & literally strinnovative cooperative resourceful network, so as to provide quality service & products to the enand good returns to the farmer members.

Amul embarked upon its illustrious journey as a beacon for the Indian cooperative movement in then, it has been undergoing a multidimensional evolution whose overarching objective has beenthroughout: serving the farmer and catering to consumer requirements. A structural landmark in

evolution process was the formation of the GCMMF in 1974. Throughout these last 31 years, we demonstrated- again and again-that Amul both represents and reconciles diverse expectations aaspirations.

RELIANCE GROUP OF COMPANIES

"Growth through Vision""Growth has no limit at Reliance. I keep revising my vision.

Only when you can dream it, you can do it."

Dhirubhai H. AmbaniFounder Chairman

Reliance Group of Companies

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leadermaterials and energy value chain businesses. He is credited to have brought about the equity cuthe late seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'daand learn to excel'. In spite of the de-merger and the controversy in early 2006, when the two AAnil and Mukesh decided to go separate ways, the emergence of Reliance, with definite convictioreflect the parallel rise of the nascent Indian private sector from behind the shadow of the publicenterprises


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MUKESH AMBANI GROUP

Reliance Industries Limited is the largest private sector business enterprise in India, on all majoparameters, including sales, profits, net worth and assets.

ANIL AMBANI GROUP

The Reliance Anil Dhirubhai Ambani Group is among India's top three private sector business hmajor financial parameters. The interests of the Group range from communications (RelianceCommunications) and financial services (Reliance Capital Ltd), to generation, transmission and dpower (Reliance Energy), infrastructure and entertainment.

STATE BANK OF INDIA

State Bank of India (SBI), the largest bank of India has been the lifeline of Indian Banking Systenetwork of branches throughout the country, it strives to cater the expectations of different stakWith the provision of new and innovative financial product and diversified services, it has attune

changing needs of time.

INFOSYS

India's face of IT: that is whatInfosys has been to the world. It stands for excellent HR practicesgeneric brand after the TATAs to have made a mark, Infosys is the company that is not just a baInternational companies, but the companies that can be trusted to provide customized solution tinternational excellence. Infosys works with a vision to be a globally respected corporation that best-of-breed business solutions, leveraging technology and delivering by best-in-class people. Imission to achieve the objectives in an environment of fairness, honesty and courtesy towards temployees, vendors and society at large.

Values drivers: C-LIFE

* Customer Delight: A commitment to surpassing our customer expectations.* Leadership by Example: A commitment to set standards in business and transactions and bexemplar for the industry and own teams.* Integrity and Transparency: A commitment to be ethical, sincere and open in dealings.* Fairness: A commitment to be objective and transaction-oriented, thereby earning trust and * Excellence: A commitment to strive relentlessly, to constantly improve the workforce, servicproducts so as to become the best.

LIFE INSURANCE CORPORATION

LIC offers insurance protection through its insurance services. It utilizes people's money for peowith a mission to ensure quality of life through financial security by providing products and serviaspired attribution with competitive return and by rendering resources for economic developmen

FINDINGS

From the table specifying the value based management in various companies, we are able to haknowledge about their strategies framed to satisfy their stakeholders. Software Company Infosybagged the first prize in value management this year gives importance to the values of each par


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financial and social enhancement of the company. On the other hand, Tata Company which is lacompany in Steel sector has framed various programmes for each party for increasing the efficiesatisfaction of interested parties. Reliance after its division between two brothers has not reducemanagement. In the same way other companies specified like State Bank of India, Life InsurancCorporation, SAIL have framed their values keeping in consideration the parties' values and orga

values.

But are the companies really rendering the responsibilities in true sense? No. We can prove this Tata companies' fulfillment of national objectives on the condition that the competitions from othcompanies and international companies are minimized. Reliance entering into a scam in oil sectothat they are failing in standing to their own values. State Bank of India Strike of employees forenhancement shows their dissatisfaction on their own bank. Amul declaring an artificial scarcity brings an environment of distrust among the customers. By specifying the values in the website report does not mean that the companies are really standing to the values rather they should prhonest and fair way.

SUGGESTIONS

The Indian corporate houses should be conscious to give values to all the stakeholders basically customers and community classes; and the value based management can be made with the folloprinciples-

* Commerce with morality* Business with responsibility* Management with humanity* Administration with principle

CONCLUSION

Value Based Management is introducing a new era where values of company as well as the variointerested are treated as an asset. Companies, whether private or public, profit making or non-pbanking or trading, have to frame ethical and honest values which satisfy the needs of the vendemployees, customers, and other stakeholders. For example: - Infosys Leader Mr. Nagawara RaNarayana Murthy says "I'm a capitalist in mind, a socialist at heart" and is awarded the first posmanagement this year. In 21st century the winners in order to stand the global competition alwastick to the fundamental values, no matter what the situation. It is rightly said by Shiv Khera, MConsultant,

"Winners stand firm on values but compromise on petty things.Losers stand firm on petty things but compromise on values".

Again when our value systems are not clear, getting what we want will be a bigger tragedy. The

Midas says it all. Distorted values leads to tragedy like the king who had a lot of money but still of money for which he asked god to make every thing gold what he touches and thereafter he todaughter who turns gold. This means that we should have some value systems but that value sybe focusing on right things for right reason. Value Based Management in Indian context has growthe realization of its tangible benefits but out of the compulsions at the marketplace. VBM in ordmeaningful must be a way of life and philosophy because it is the eternal vigilance that pays theliberty.

REFERENCES


14/15

* Copeland Tom, Koller Tim and Murrin Jack, "Valuation: Measuring and Managing the Values oCompanies", John Wiley & Sons, New York. Third Edition,2000

* Weaver Samuel C., and Weston J. Fred, "A Unifying Theory of Value Based Management", Pap

Anderson Graduate School of Management. University of California, USA,2003

* Word Pitt, "The Impact of Increased Employee Retention on Performance in Contact Center foDept. of Industrial Engineering and Operation Research, Columbia University, New York,

* Sawhey Clifford "Simple, Selfless, Superrich" , Toping IT with Integrity www.lifepositive.com

* Nilekani, Nandan N., CEO, Infosys Technologies, "Infosys Winning Formula" rediff news poweBusiness Standard ,August 18, 2006

* Sharma, A.K, Talwar Balvir, "CSR Modern-vis--vis Vedic Approach" Measuring Business ExVol.9, Nov'01,2005, pp. 35-45

* Korajczyk, Robert A., 2001, Paper on Value Based Management,www.kellogg.nwu.edu/faculty/korajczy/htm, October 12

* Rappaport Alfred, Creating Share value: guide for Manager & investors, New York, The free p

* Prasad, L.M. Principles and Practice of Management, Sultan Chand, New Delhi, 2004

* Drucker, P.F., Practice of Management, Allied Publishers, New Delhi

* Planman Consulting & ICMR Research," India's 100 Most Valuable Brands",4Ps Business & Ma2006, pp. 38-145

* www.valuebasedmanagement.net

* www.businessworldindia.com

* www.businessandeconomy.org

* www.economicstimes.com

N.M. LeepsaStudent

Ravenshaw College

Sonali PatnaikFaculty

P.G. Department of Finance and ControlVISWASS

Bhubaneswar

P.K. Pradhan


15/15

FacultyP.G. Department of Commerce

Utkal UniversityVani Vihar

Source: E-mail March 4, 2008

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