Indian subcontinent since time immemorial has been the abode of spiritual bliss.

It has
shown the light of wisdom and harmonious peaceful coexistence to the rest of the world.
But as the time passed by, with the influence of materialistic western lifestyle, Indian
society is now characterized by degradation in values and moral standards. In a recent
survey by Transparency International, India tops the list in the Payment of Bribe Index and
is also adjudged as one of the most corrupt countries in the world. Business is a part and
parcel of the society and is also no exception.

Traditionally, businesses have placed the highest priority on making money – concern for
employees and human values has typically received less attention. This is evident from the
Norwegian term for business administration: "Økonomi og ledelse" which puts "economics"
before "leadership". In a Financial Times (June 7-8, 2003) interview, even the grand old
man of conservative economics- Milton Friedman – concedes "The use of quantity of money
as a target has not been a success". Inline with this, a 2003 survey by the Argument Group,
found that three out of four Norwegian executives reject that a corporation's sole
responsibility 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
needed for everything in the world, but it is not enough for living a really good life. Man
needs a purpose beyond money. A 2004 survey by Roffey Park & Management Today of 750
managers and board members found that close to 70% of them were searching for a deeper
meaning in their job.

In contrast to money driven businesses, value based organizations practice leadership and
management through shared productive and ethical human values. Within this broad
framework, self-managing individuals can be left to experience and display high levels of
meaning, enthusiasm, initiative, creativity, integrity, happiness and self-organization – for
the benefit of themselves and their corporation. Such organizations realize and live
according to the principle that their associates are their greatest assets. The basic concept
of putting man first is beautifully expressed in the German philosopher Immanuel Kant's
Third Categorical Imperative: "Act so that you treat humanity, whether in your own person
or in that of another, always as an end and never just as a means. "

Of course, value based management also includes making money. It is not a question of
either man or money. It is a quest for both happiness and profit. Research shows that value
based or visionary companies perform on a markedly higher level – they earn much more
money – than merely profit-based companies. In the 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 VBM in three different sections.

Section-I deals with the concept and historical perspective, Section-II highlights the
dynamics or 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 on values (normally maximizing shareholders value). Value based management
includes all the three of the following:

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

Value based management aims to provide consistency of the corporate mission (business
policy), the corporate strategy, corporate governance, corporate culture, corporate
communication, organization structure, decision processes and systems, performance
management processes and reward processes and systems.

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

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

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
speedy redressal of 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.

COMMUNITY
Social 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
and external corporate complexity over time are highly interrelated. This is only logical if
one realizes that VBM is basically a philosophy enabling and supporting maximum value
creation organization.

Before the industrial revolution, companies were relatively small and their internally
complexity was low. Also the external environment of companies was relatively stable and
clear. Value creation was relatively straightforward, 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 18 th century, when, by
mechanizing and by the Industrial Revolution, it was possible to achieve economies of scale
through investing in machines and hiring workers. The dislocation of facilities made direct
supervision harder and insight into the efficiency and productivity of the production process
became more important. During the19th century, these methods gradually improved, using
improved transportation and communication mechanisms available. These systems were
aimed at promoting and evaluating the efficiency and productivity of decentralized
production processes and 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 firm's owner, a return to the investment of his own capital and to the pains he suffers in
exercising his "business power" in planning, supervision and control. Frederick Taylor
(1911) and Harrington Emerson develop Scientific Management (using detailed physical
manufacturing standards, enabling a simple translation to financial standards).

Corporations become more complex with a diversified product assortment and activities.
Allocation of assets over the various activities and as a result, better information on these
activities becomes more important. Management Accounting introduces Return on
Investment (ROI), at first, only at top management level for allocating resources and
judging performance.
In 1938, Grant makes some references to using the time value of money for deciding
among investment options. In 1954, Dean publishes an article in the HBR about use of
Discounted Cash Flow (DCF) practically for valuing investment proposals and other
decisions. Later, also methods are introduced such as residual income, responsibility
accounting and transfer pricing.

Professional Investing – In 1964, Sharpe introduces the Capital Asset Pricing Model (CAPM)
and in 1973 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 ground breaking book "Creating Shareholders Value". In 1994, Jim Taggart uses the
term "Value Based Management" in his book "The Value Imperative: Managing for Superior
Shareholders Returns". From now 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:
gain senior team commitment, customize the VBM framework, and finally, makes VBM a
way of life in the organization.

GAINING TOP MANAGEMENT COMMITMENT

VBM is similar to all other initiatives in one respect. Senior management needs to support
VBM with their words and ultimately with their actions. It is up to the senior team to create
a sense of urgency around the initiative and clearly communicate a vision of the impact that
VBM will have on the organization. In short, they must make the reasons for VBM simple,
clear and compelling. Anything less than the full commitment of the senior team will
ultimately cause the initiative to fail and simply become, another "Program of the month",
that does not achieve the intended results. The organization will spend a lot of time, money
and energy 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
management practices are performance measurement, compensation design,
planning/budgeting and training and communication programs.

* Performance Measurement

The first step in customizing a VBM framework is to abandon accounting based metrics and
define a value-based measure, such as economic profit, as the key performance metric of
the company. The overarching goal is to improve economic profit over the long-term. When
a firm takes the long –term view, it is imperative to act in an ethical and socially responsible
manner. Anything less may improve short term prospects but will not lead to long-term
success.
Less is more when defining the measure. While the measure needs to be grounded in
financial theory, keep the complexities to a minimum. Remember, if improving economic
profit is the goal of the organization, then people need to understand how it is calculated
and ultimately how they can make decisions that improve economic profit.

* Compensation Design

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

* Integrating Performance Measures into planning framework

The new performance measure needs to be at the heart of key management processes,
such as budgeting, planning, and capital allocation. A good exercise during the budgeting
and planning process is to have business units calculate what level of bonus will be paid out
if projected performance is met. This is an excellent way to move from a "manager" mindset
to an "owner" mindset. When organizations do not consistently make decisions using the
new performance measure, a mixed message is sent to the organization about the
organization's overarching goal. This mixed message will lead to confusion about what the
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
importance of managing for value and the basic concepts of VBM. People in the organization
need to understand the basics of economic profit before they can be able to apply the
concepts to daily decisions. An organization needs to develop a new reporting package that
is easily understood by finance and non-finance employees alike. The results need to be
communicated visually, timely, and accurately.

The initial training provides the opportunity for employees to understand new concepts and
begin to develop ideas around how they can make decisions that are more in line with value
creation. Communication of results will provide the necessary feedback to the organization
about how their actions are impacting shareholder value. Lack of feedback on how actions
are impacting value will disrupt the learning process, signal a lack of importance around the
initiative, and ultimately cause the initiative to lose momentum.

MAKING VBM A WAY OF LIFE

Companies must integrate VBM into their culture. VBM cannot be thought of as just an
initiative but rather as a way of life. VBM needs to become a part of the drinking water, so
to speak, meaning we have to turn our efforts to ensuring that everyone in the organization
understands his or her role in creating value in the organization. This begins at the top of
the organization and needs to be cascaded down the entire organization so each individual
understands the big question, "How does our company create value?"—and the even more
relevant question, "How does my role and the daily decisions that I make impact value?" To
reach this level, the organization will need to devote a significant amount of resources to
provide the necessary learning, tools and feedback required so all individuals can
understand their role in value creation. If you can lead your company to a place where
everyone in the organization can answer the above questions, you 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

balances moral values with material values.

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

* A foundation of shared ethical values—starting with the belief in the intrinsic value of
each person (each employee, customer and supplier).
* Success in the marketplace based on delivering maximum value (higher quality at
lower prices) to the customer.
* Rewards based on the value people contribute to the company, as individuals and
as a team, as workers and as owners.

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

values, as expressed in a written set of
a. company core values (ethical principles which define the culture and clarify the social
purposes of the organization); and
b. a code of ethics (a set of habits to be encouraged to guide individual behavior toward
strengthening the company's culture and interpersonal harmony).

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

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

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

BENEFITS OF VBM

* Benefits of VBM for Management

By moving from an autocratic to a more participatory, value-based mode, a company's
leadership can spread around some of management's typical operational "headaches."

* Benefits of VBM for employees

A workplace that operates according to the principles of Value-Based Management
empowers employees as workers and as owners. VBM creates a corporate culture where
work can be more satisfying and economically rewarding.
* Benefits of VBM for Labor Unions
VBM involves the transformation of labor unions, offering labor representatives new and
more important roles than they have played within the adversarial wage system culture.
Unions can help deliver a higher degree of economic justice and far greater rights for their
members than the "crumbs" now bargained for within 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
interests are unified within a management system reflecting the principles of Value-Based
Management, the greater customer and employee satisfaction will be. From this can flow
increased cost savings, increased sales, and increased profits.

A BRIEF SURVEY OF LITERATURE

In the extensive literature survey it was found that the foreign research scholars have
contributed much on "VBM" than the Indian research scholars. The value systems were
quite different for the different authors, different companies and different countries. The
following articles are covered under the literature study:

The Care of VBM systems (2003) by Harley E. Ryan, Louisiance State University aimed at
finding whether a firm significantly improves adjusted residual income after adopting value
based management. He found that VBM improves economic performance; it highlights
inefficiencies and need for improvement in compensation contacts. VBM is more effective for
high growth firm than for low growth firms. VBM encourages efficient use of the invested
capital. Firms with high net working capital improve economic performance after they
adopted VBM. Effective corporate governance includes use of monitoring and incentive
mechanism to encourage the creation of shareholders value. VBM attempts to accomplish
the goal by providing manager with the set of decision making tools that identify
alternatives.

* Word Whitt, Dept. of Industrial Engineering and Operation Research, Columbia

University, New York, in his article "The Impact of Increased Employee Retention on
Performance in Contact Center for Customer" found that VBM as regards to employees is
very important and contact center performance has often hampered by low employee job
satisfaction as evidenced by high turnover of employees and giving them some value.

* Department of Energy, Office of Project and Fixed Asset Management in Life Cycle Asset
Management (1997) viewed that "VBM is not just a good idea…. It's the law," whereas
Frederick Taylor (1911) opines "In the 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 initiative you put in place at your company, is like a loaded gun, so you need
to be careful about how you put that gun in people's hands," Newer companies have an
easier time with value-based management than older ones that have outdated, hard-to-
remove legacies

* In "Transformational Leadership: Peer Mentoring as a Value- Based Learning Process"-

Mary Ann Mavrinac sees values as the foundation for organizational life. The connection
between individual wants and needs and public values are at the heart of transformational
 leadership. The Leader who can achieve congruence between 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 criteria.

* Not rags to riches, not because of their personal triumphs but for the impact their work
and effort have on thousands 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
sheet but a legend 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,
build factories in villages, transform barren tracts of land into profitable assets, change
mind-sets, pioneer industry or services.
* Commitment to education.
* Patriotic entrepreneurship/economic nationalism. During the earlier Raj they fought for
the rights of Indian entrepreneurs to exist and vociferously criticized economic racism.
Today they register Indian patents in USA etc.

TABLE SHOWING THE VALUE SYSTEM IN INDIAN COMPANIES

NAME OF THE FOUNDER PARAMETERS

COMPANY
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 Dhirubhai Huge production and best quality of output with cheapest price.
Ambani
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 Subhash Fully committed to current concepts such as shareholder value, and value-based
Chandra management (including out-sourcing, employee stock options etc.)
Quality products at competitive prices.
 Challenged government vision of what people want from electronic entertainment.

BOMBAY Cawasji Factory system with factory labor.

SPINNING MILL Nanabhoy Davar
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 country.
Open discussions -Asks everyone to tell top management what problems are and what
should be the solutions. Then instills discipline that what has been decided must be
done perfectly.

INFOSYS N R Narayana Ethical business practices and transparency

Murthy

WORLD TEL Satyen (Sam) Access to telephone lines for ordinary people
Gangaram
Pitroda
HINDUSTAN Prakash Tandon Professional management
LEVER.

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
transparency, innovativeness, quality and depth of management, financial performance,
quality of product and services, global competitiveness and people practices & talent
management. The bright example is the ranking made for the top 25 companies as shown
below:-

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

* The survey also reveals that reliance is rated on second on financial performance but has
been pegged at 10th on ethics and transparency. Nevertheless, the fact that reliance did not
slide down a lot further despite the Ambani family washing dirty hands in public is a
testimony to the mystique of Ambani brand. Reliance is the only company that has featured
in the top 10 of every most respected company's survey since 1983.

* Another fascinating fact found was that, people tend to express respect for the Tata
Group as a whole and not for any individual TATA company. I.e. only 'Tata'. It was in
second position in infrastructure sector. It has done well in ethics and transparency.

* SBI the country's biggest bank with nearly 14000 branches was in third position in
banking sector due to use 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 force to reckon with due to better quality of products.

CURRE PRE COMPANY TOTAL INNOVAT QUALITY FINANCIA ETHICS' QUALITY PEOPLE GLOBAL
NT VIO SCORE IVE-NESS AND DEPTH L AND OF PRACTICES COMPETITIVE
RANK US OF PERFORM TRANSPAR PRODUCT AND TALENT -NESS
RAN MANAGEME ANCE ENCY AND MANAGEMEN
K NT SERVICES T
1 1 INFOSYS 18,124.2 2,230.2 2581.0 2778.2 2772.3 2315.7 2623.4 2823.4
TECHNOLOG
Y
2 3 WIPRO 10,218.5 1,052.7 1,435.9 1551.4 1590.3 1235.5 1636.6 1716.1
3 2 RELIANCE 9,118.8 1,276.5 1,317.5 1969.6 1021.4 1007.4 1132.5 1393.9
 INDUSTRIES
4 9 ICICI BANK 8,911.2 1,528.3 1,381.8 1211.6 1166.9 1200.5 1229.6 1192.5
5 13 TATA 8,474.5 822.8 1,232.0 1210.3 1445.7 976.6 1323.3 1463.8
CONSULTAN
CY SERVICES
6 5 MARURTI 7,690.9 1,012.1 1,069.6 1010.5 1047.2 1357.7 1061.2 1132.5
UDYOG
7 21 ITC 7,154.2 938.5 1,167.3 1120.4 1004.4 943.4 1116.0 864.2
8 7 HDFC BANK 7,097.9 1,091.9 1,126.3 956.3 1076.4 1000.2 1029.5 817.6
9 12 TATA MOTORS 6,357.9 647.9 982.8 780.2 1202.3 997.5 848.2 899.0
10 14 LARSEN & 6,331.8 662.2 924.8 940.0 1027.5 926.4 937.4 913.6
TOURBRO
11 23 NOKIA INDIA 6,286.2 1,213.4 700.1 605.6 675.3 1156.2 887.4 1048.0
12 26 BHARATI 5,969.4 1,064.6 872.3 902.7 690.0 880.1 822.8 737.0
AIRTEL
13 17 OIL AND 5,952.3 687.1 944.9 996.6 836.6 694.3 799.2 993.2
NATURAL GAS
CORPORATI
ON
14 8 JET AIRWAYS 5,860.9 978.2 797.1 532.1 689.0 1086.4 805.6 972.5
15 18 HERO HONDA 5,798.3 863.8 763.0 993.0 697.9 915.1 784.4 781.2
MOTORS
16 15 TATA STEEL 5,751.9 499.2 846.9 765.0 1182.6 736.2 850.0 872.1
17 4 HINDUSTAN 4,863.1 629.0 780.0 621.3 716..3 707.8 811.1 597.6
LEVER
18 11 GCMMF(AMU 4,659.2 967.7 625.0 450.1 721..9 923.4 527.0 444.1
L)
19 10 RANBAXY 4,433.2 655.9 622.9 692.6 561.7 639.0 630.4 630.7
LABORATORI
ES
20 20 BAJAJ AUTO 4,309.2 689.1 629.2 725.7 551.3 675.9 474.9 563.2
21 24 CITI BANK 4,155.7 746.7 680.4 495.1 412.0 568.3 695.2 558.0
22 16 STATE BANK 3,939.8 451.7 578.9 699.8 703.7 478.7 494.2 532.8
OF INDIA
23 6 DR. REDDY'S 3,527.2 624.1 495.0 630.1 428.2 432.1 445.3 472.3
LABORATORI
ES
24 32 NEW DELHI 3,457.7 618.8 489.8 395.9 417.0 592.1 573.3 370.8
TELEVISION
25 22 INDIAN OIL 3,431.0 426.0 497.1 574.1 489.7 491.8 480.0 472.3
CORPORATI
ON
Source: Business World , 5 June,2006 p.54

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

Rank Company Image and Brand Brand loyalty Brand Brand Overall mean
perception awareness association performance
4 INFOSYS 3.897 3.463 3.120 3.183 9.776 23.438
8 TATA 3.732 3.630 3.252 3.382 8.998 22.993
14 ICICI 3.705 3.667 3.248 3.238 8.534 22.421
41 RELIANCE 3.179 3.793 2.969 2.668 6.723 19.332
50 SBI 2.863 3.687 3.064 3.196 6.122 18.931
72 LIC 2.660 3.533 3.279 2.633 5.412 17.518
97 AMUL 2.142 2.511 2.551 2.554 4.274 14.033
Source: 4p's Business & Marketing July 2006

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

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

* Reliance today, conveys a titanic empire emerging as a true blue multinational .In spite of
the de-merger and the controversy in early 2006, when the two Ambani scions Anil and
Mukesh decided to go separate ways, the emergence of Reliance, with definite conviction,
does reflect the parallel rise of the nascent Indian private 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
Kashmir to kanya kumari and building the nation with the enormous welfare activities. The
bank has evolved today as a synonym of trust, reliability, and credibility. From a fuddy-
duddy sluggish employee image to the image of being customer friendly, India's largest
bank SBI has come a long way providing various products and services. The investors are
emotionally connected with the tagline of SBI "We have the power of SBI".

STEEL AUTHORITY OF INDIA LIMITED

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

* 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
private sector. Today, Tata steel ranks among the worlds top steel company and has
emerged one of the lowest producers of steel of world. The values and the work culture
were imbibed by the legendary J.R.D Tata who believed that whether in business or life, it
was people which matters the most. Tata steel values viz. "respect for the individual"
"credibility" and "excellence" are demonstrated in everything it does. TATA has made
commitment towards employee relations, environment, corporate governance and
community.

AMUL CO-OPERATIVE

The Brand name AMUL from the Sanskrit word "Amoolya" meaning priceless, has really
become the symbol of many things; specifically "the taste of India". AMUL was established
in 1971 and since then have achieved leadership position in dairy products and now the big
daddy in market. This CIO International IT excellence Award has recognized the Cooperative
Movement & its Leadership under the "Amul" brand, initiated by Dr. V Kurien, Milkman of
India, who's main Motto is to build Indian Society economically & literally strong through
innovative cooperative resourceful network, so as to provide quality service & products to
the end consumers and good returns to the farmer members.

Amul embarked upon its illustrious journey as a beacon for the Indian cooperative
movement in 1946. Since then, it has been undergoing a multidimensional evolution whose
overarching objective has been the same throughout: serving the farmer and catering to
consumer requirements. A structural landmark in this evolution process was the formation
of the GCMMF in 1974. Throughout these last 31 years, we have demonstrated- again and
again-that Amul both represents and reconciles diverse expectations and aspirations.

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. Ambani
Founder Chairman
Reliance Group of Companies

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global
leader in the materials and energy value chain businesses. He is credited to have brought
about the equity cult in India in the late seventies and is regarded as an icon for enterprise
in India. He epitomized the spirit 'dare to dream and learn to excel'. In spite of the de-
merger and the controversy in early 2006, when the two Ambani scions Anil and Mukesh
decided to go separate ways, the emergence of Reliance, with definite conviction, does
reflect the parallel rise of the nascent Indian private sector from behind the shadow of the
public sector enterprises

MUKESH AMBANI GROUP

Reliance Industries Limited is the largest private sector business enterprise in India, on all
major financial parameters, 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 houses on all major financial parameters. The interests of the Group range from
communications (Reliance Communications) and financial services (Reliance Capital Ltd), to
generation, transmission and distribution of power (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
System. With the network of branches throughout the country, it strives to cater the
expectations of different stakeholders. With the provision of new and innovative financial
product and diversified services, it has attuned itself to the changing needs of time.

INFOSYS
India's face of IT: that is what Infosys has been to the world. It stands for excellent HR
practices. The only generic brand after the TATAs to have made a mark, Infosys is the
company that is not just a back office of International companies, but the companies that
can be trusted to provide customized solution that have international excellence. Infosys
works with a vision to be a globally respected corporation that provides best-of-breed
business solutions, leveraging technology and delivering by best-in-class people. It has a
mission to achieve the objectives in an environment of fairness, honesty and courtesy
towards the clients, employees, 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 be an exemplar 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 respect.
* Excellence: A commitment to strive relentlessly, to constantly improve the workforce,
services and products so as to become the best.

LIFE INSURANCE CORPORATION

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

FINDINGS

From the table specifying the value based management in various companies, we are able
to have a brief knowledge about their strategies framed to satisfy their stakeholders.
Software Company Infosys who bagged the first prize in value management this year gives
importance to the values of each party for the financial and social enhancement of the
company. On the other hand, Tata Company which is largest company in Steel sector has
framed various programmes for each party for increasing the efficiency and satisfaction of
interested parties. Reliance after its division between two brothers has not reduced the
value management. In the same way other companies specified like State Bank of India,
Life Insurance Corporation, SAIL have framed their values keeping in consideration the
parties' values and organizational values.

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

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

* 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
various parties interested are treated as an asset. Companies, whether private or public,
profit making or non-profit-making, banking or trading, have to frame ethical and honest
values which satisfy the needs of the vendors such as employees, customers, and other
stakeholders. For example: - Infosys Leader Mr. Nagawara Ramarao Narayana Murthy says
"I'm a capitalist in mind, a socialist at heart" and is awarded the first position in value
management this year. In 21st century the winners in order to stand the global competition
always plan to stick to the fundamental values, no matter what the situation. It is rightly
said by Shiv Khera, Management Consultant,

"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 story of Midas says it all. Distorted values leads to tragedy like the king who had a lot
of money but still wanted more of money for which he asked god to make every thing gold
what he touches and thereafter he touches her daughter who turns gold. This means that
we should have some value systems but that value system should be focusing on right
things for right reason. Value Based Management in Indian context has grown not out of the
realization of its tangible benefits but out of the compulsions at the marketplace. VBM in
order to be meaningful must be a way of life and philosophy because it is the eternal
vigilance that pays the price of liberty.
WELCOME TO INDIAN MANAGEMENT !
This is a special site developed by the Centre for Organization Research and Development in
Management (CORD-M), Hyderabad, India. The members of CORD-M Under the Guidance of Prof.
B. R. Virmani have been involved in research on various aspects of Indian management for over two
decades and would like to share some of their research findings as well as help various types of
organizations in developing and implementing some of management practices and precepts
specially meant to address the issues and peculiarities of Indian organizations. Prof. B. R. Virmani is
the Chairman of Centre for Organisation Research and Development in Management. (CORD-M)
and Formar Dean of Administrative Staff College of India (ASCI), Hyderabad, India.

The management concept in the west developed as a result of evolutionary process,

based on the changing values systems of the people - the social, political, and economic
environment as well as educational and cultural milieu. However, in India, historically
we never evolved our own concepts, keeping the Indian scenario in view. We found it
convenient to transfer management technology, trust as scientific technology. As a
result of these grafting process of management, we have created more confusion in
management thinking.

However, suddenly due to success of the Japanese methods of management, even the
western countries have started doubting their own concepts and are trying to emulate
the Japanese lessons. This has further confused the Indian managers as well as the
management experts, who all along were following as a gospel truth whatever the
westerners had developed.

Our Research finding in Indian Management indicate that many of the Management
practices suggested by Foreign specially the Western consultants when implemented in
Indian Organizations, get rejected by the environment resulting in contradiction within
the Indian context between stated policies and actual practices termed as "Dualism" in
Indian Management. Many of these practices remain on paper without proper
implementation. Therefore, it becomes imperative to evolve our own concepts of
Management, which are in tune with Indian environment and value systems. Based on
extensive research we have evolved such concepts and Management practices which
are acceptable in Indian context.

Challenges of Indian Management

Management in India is an amalgam of practices borrowed from the West-and more

recently from Japan-overlaid with age-old Indian values and norms that the still extant.
This book is a seminal attempt to understand the nature of Indian Management and
how it can be institutionalized. With an in-depth historical perspective and a thorough
analysis of four types of Indian organizations-traditional family-owned private sector;
public sector, government departments and multinationals - the author highlight certain
common styles, policies and practices that are in consonance with the Indian
environment and also provides guidelines for management practices for Indian
organizations. The contradiction within the Indian context between stated policy an
actual practice has been explored and brought to the fore. Also in this book: " Evolution
of management in India from ancient times to the present; " Evolution of management
practices in the West and Japan; their strengths and weaknesses as also their relevance
in the Indian context. " Overview of Indian Management and the future direction it
could take. Lucidly written and replete with detailed case studies based on data
collected from over 50 organizations the book provides the path Indian Management
needs to take in the context of the changing competitive environment. It will be
invaluable for CEOs, managers, public policy administrators as also for consultants,
teachers, researchers and students of management. The book is published by Response
Books Sage Publications, New Delhi (2007).