Question9. Explain the role of management in Business organization?

How can this role can be improved by introducing

Ethical and Value based Management? 2017\2016\2015

Management is the process of guiding the development, maintenance, and allocation of resources to attain organizational goals. Managers are the people
in the organization responsible for developing and carrying out this management process. The four primary functions of managers are planning, organizing,
leading, and controlling. By using the four functions, managers work to increase the efficiency and effectiveness of their employees, processes, projects,
and organizations as a whole.

BASIC MANAGERIAL ROLE

Regardless of level or areas with an organization, all within an organization, all managers must play
certain roles and exhibit certain skills if they are to be successful.
 TABLE OF MANAGERIAL ROLES:

Category Role Sample Activities

Figurehead Attending ribbon-cutting ceremony for new
plant.
Leader Encouraging Employees to improve
productivity.
Interpersonal Liaison Coordinating Activities of two project Groups
Monitor Scanning industry reports to stay abreast of
development.
Informational Disseminator Sending information on new organizational
initiatives
Spokes Person Making a speech to discuss growth plan
Entrepreneur Developing new ideas for innovation
Disturbance Resolving conflict between two sub-
Handler ordinates
Decisional Resources Reviewing and Revising budget requests
Allocator
Negotiator Reaching agreement with a key supplies or
labour union

HOW ETHICAL MANAGEMENT CAN IMPROVE MANAGEMENT ROLE IN BUSINESS ORGANIZATIONS:

Ethics Management:

Ethics management related to social responsiveness of a firm. It is ‘the discipline dealing with what is good and bad, or right or
wrong, or with moral duty and obligation. It is a standard of behaviour that guides individual managers in their works’

‘ it is the set of moral principles that governs the actions of an individual or group’ When managers assume social responsibility,
it is believed that they will do it ethically, that is, they know what is right and wrong.

Approaches to Management Ethics:

There are three approaches to management ethics:
1. Utilitarian approach:
In this approach, managers analyse the effects of decisions on people affected by these decisions. The action rather than the
motive behind the action is the focus of this approach. Positive and negative results are weighed and managerial actions are
justified if positive effects outweigh the negative effects. Pollution standards and analysing the impact of pollution on society is
management ethics code under utilitarian approach.

2. Moral rights approach:

In this approach, managers follow ethical code which takes care of fundamental and moral rights of human beings; the right to
speech, right to life and safety, right to express feelings etc. In the context of business organisations, managers disclose
information in the annual reports necessary for welfare of the people concerned. The nature, timing and validity of information is
taken into account while reporting information in the annual reports.

3. Social justice approach:

According to this approach, managers’ actions are fair, impartial and equitable to all individuals and groups. Employees are not
distinguished on the basis of caste, religion, race or gender though distinction on the basis of abilities or production is justified.
For example, all employees, males or females with same skills should be treated at par but it is justified to treat employees who
produce more differently from those who produce less.
 HOW VALUE-BASED MANAGEMENT IMPROVE MANAGEMENT ROLE IN BUSINESS ORGANIZATIONS:

Value Based Management

Value Based Management (VBM) is the management philosophy and approach that enables and supports maximum value creation in organizations, typically the maximization of
shareholder value. VBM encompasses the processes for creating, managing, and measuring value.

Value Based Management aligns a company’s overall aspirations, analytical techniques, and management processes with the key drivers of value.

The three elements of Value Based Management:

 Creating Value. How the company can increase or generate maximum future value. More or less equal to strategy.
 Managing for Value. Governance, change management, organizational culture, communication, leadership.
 Measuring Value. Value Based Management is dependent on the corporate purpose and the corporate values. The corporate purpose can either be economic (Shareholder Value) or
can also aim at other constituents directly (Stakeholder Value).
Value Based Management improves management of business?

 Can maximize value creation consistently.

 It increases corporate transparency.
 It helps organizations to deal with globalized and deregulated capital markets.
 Aligns the interests of (top) managers with the interests of shareholders and stakeholders.
 Facilitates communication with investors, analysts and communication with stakeholders.
 Improves internal communication about the strategy.
 Prevents undervaluation of the stock.
 It sets clear management priorities.
 Facilitates to improve decision making.
 Encourages value-creating investments.
 Improves the allocation of resources.
 Streamlines planning and budgeting.
 Facilitates the use of stocks for mergers or acquisitions.
 Prevents takeovers.
 It helps to better manage increased complexity and greater uncertainty and risk.