Understanding a Value Centered Organisation

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K P Gopalkrishnan
Assistant Professor HR and Business Ethics
Pillai Institute for Management Studies and Research
Panvel –

This paper attempts to clarify what is meant by value centred organisations since increasingly the word value is being used by Human Resource professionals to delineate their prognosis. To remove the fuzziness this paper takes a definitional stand and gives the HR professional a working idea of this highly abstruse subject – a subject on which divergent views expressed by a number of authors has managed to confuse many a reader. More often than not it boils down to my views for the rest of society-right or wrong. This is a sad commentary and every social and behavioural scientist must work to bring about as much clarity as possible.

Economists define infrastructure as the relationship between the four major factors of production i.e. land, labour, capital and management. Of late, another factor has been added and that is the creation of knowledge. Superstructure is defined as the socio-political-cultural relationships based on the economic relationship delineated in infrastructure. Hence capital budget allocations form the basis of infrastructure but current budget allocations form the basis of superstructure. However, management scientists do not speak the language of economists. When we speak of creating infrastructure in micro or organisational terms we invariably talk of foundations required for generating value. This value is usually in tangible and measurable terms. Hence we include power, buildings, telephony, telecommunications, information networking, roads, canals etc in infrastructure. When we speak of infrastructure in the organisational sense we tend to include systems and processes that assist value generation. It has also been observed, however, that the term value centred organisation is being increasingly used in literature on Human Resources Management and Organisational Development. Top management is not far behind in using the term to spruce up their annual reports and after dinner speeches. Yet there is a great deal of ambiguity about what the tem actually means. The upshot of it is that the young manager is confused about its implication and often takes decisions based on (highly) subjective perceptions of objective social reality believing (mistakenly at times) what such an organisation involves. This affects the infrastructure of the organisation making it more dis-equilibrated that necessary. What stabilises it is its corporate culture. This paper presents the reader with a bird’s eye of view of what a value centred organisation means and what its basic characteristics are. To that extent this piece is informative and explanatory at the same time. It is hoped that at the end of the paper some of the grey areas and mental cobwebs associated with it are rendered a little less opaque. Value, to begin with, should not be mixed up with ethics since the former is a mind-based concept while the latter is an activity-based concept. That there is a fair degree of auto-correlation between the two is also well accepted. But what seems to confuse the young management executive is the term value itself. Value has basically two connotations. In its subjective connotation value implies beliefs as in these are our beliefs and this is what we stand by. In its objective connotation value implies the economic utility added by a person, process or product to the organisation. This is evidenced when we say this is the value of our company’s output, this is the value added by this innovation or this much value was enhanced due to quality assurance measures. Please note that a value in the subjective connotation need not be ethical as was witnessed in the case the Madhavpura Bank and the Global Trust Bank episodes. Similarly a value in the objective connotation need not be positive as was witnessed in the case of sick...
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