Sunday, February 3, 2013

Management by Values: A New Management Approach

Management theory has developed based upon the success of companies. Through these examples researchers can better understand how successful techniques can be used to improve upon other organization. New techniques may provide a framework for developing companies in a highly competitive international market. The development of Management by Values offers a potential way to view and see organizations.

It is beneficial to understand how these techniques contributed and grow from each other in a natural progression. Starting at Scientific Methodology each method contributed to concepts of administrative approaches, decentralization, strategy orientation, core competencies, innovation, and values. Each technique provided some level of strength at the time they were implement. However as the world environment becomes more complex it is important to continue and develop economic approaches. New methods must be forthcoming.

According to Zhen (2012) the development of thought on modern management techniques has grown throughout the past century:

Management by Scientific Method (1911, Bethlehem by Taylor)
Management by Administration Organization (1916, Fayol)
Management by Decentralization  (1946, Drucker)
Management by Strategy  (1964, Drucker)
Management by Core Competency (1990 NEC vs. GTE)
Management by Innovation and Leadership (2000’s, Apple & Jobs)
Management by Values (Alibaba, 2010).

Management by Values can help to develop stronger and more effective cultures by using values as guiding principles to competitive advantage.  To be a competitive advantage an organizational culture should 1.) contribute to the financial development of the whole; 2.) is unique to other organizational cultures; and 3.) is not easily copied (Barney, 1986). When a culture is developed that works, it will continue to provide benefits as long as it is unique and not adapted by other organizations to achieve the same advantages.

The development of strong organizational culture based in value premises can help hold members together. Through this development, each member has appropriate value assumptions that help in guiding their decisions. Such values become further solidified the more people join the organization and reinforce this value system. Each organization has their own unique approach to the market through their value assumptions.

Guiding organizational values help determine the overall strategic approach. An organizational culture is based upon those root value systems an organization deems as the most important vantage points in order to navigate the economic environment (Zairi and Jarrar, 2011). All decisions are filtered through these values, which create guiding principles for the rest of the organization.

Business leaders can develop strong value systems to guide both their actions as well as those of their employees. Through these value systems, the organization can help guide people to appropriate decisions that further both the groups and the organizations interests. When such value systems are beneficial, and based upon mutual self-interest, they can encourage group navigation through difficult economic times and create a more competitive workplace by aligning individual activities through a cultural lens.

Barney, J. (1986). Organizational Culture: Can it be a Source of Competitive Advantage?. Academy of Management Review, 11(3), 656-665.

Drucker, P. F. (1958). Business Objectives and Survival Needs: Notes on a Discipline of Business Enterprise. The Journal
of Business, 31(2), 81-90.

Zhen, L. (2012). Management by Values: A case study. International Business and Management Vol. 4, ( 2), pp. 75-91

Zairi, M., and Jarrar, Y. (15 July 2011). Impact of Organizational Values on Business Performance. Retrieved February 3, 2013 from

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