September 23, 2016

Management by Values

Management by Values (MBV) differentiates between three terms: vision, mission and other operating values.

Every company should have explicitly defined two important groups of values or shared principles.

1. The basic values associated with its vision (Where are we going?) and its mission (What for? or Why does the company exist?).

2. The instrumental or operating values associated with the organization's way of thinking and way of doing things to meet the challenges of  understanding market, new product development, producing and selling.

The differentiation between basic or final values and operating values: The basic values give meaning and cohesion to the collective effort to move the company towards where it wants to go in the long-term. They clarify the reason for its existence,  the kind of business it wants to become, the differentiation that it will provide, any. Every business company has a double mission: one economic and , the other social; the second depends clearly on the first. The economic mission  is to earn revenues and distribute the share of partners in business in timely way and retain the profit. The social mission expresses the supply of specific products or services to the society and take care of other social obligations that demand that it takes care of the people involed in its business activities on the supply and distributive sides.

The operating value determine or define its "operating culture". They are the explicit principles of action that regulate the daily conduct of individual employees in their work to achieve the vision and mission of the company. Some examples include: mutual trust, customer satisfaction, honesty, teamwork, etc.

Construction of new beliefs and values as the foundation of new structures, new processes and new
human resources policies:

Managers have to "think through" what new beliefs and values must underpin the new organization structures, new internal processes (including introduction of new technologies), new colleagues (recruitment) new human resources policies (selection, compensation, training, etc.).

MBV helps the leadership in constructing a collective sense of what the company "should be", and some freely chosen and accepted "rules of the game", to channel future action. In this way, MBV provides a way for effecting transformation and introducing coherence, across the length and breadth of the company.

MBV proposes the need to manage values, to guard them as the scarce resources they undoubtedly are. Managing values means managing the culture (behavior, artifacts, values and beliefs) of the company, strengthening it day by day and always revitalizing it, to face the unknowns of the future.

In today’s ever-increasing globalized, complex, chaotic and fast-changing world, leaders need to develop and enshrine an organizational culture based on shared values.  The values have to be selected from the bedrock of mankind and distilled by millennia of the human civilizing experience

Dolan and colleagues (Dolan et al., 2006; Dolan et al., 2008; Dolan, 2011) proposed that the set of values followed by an organization has to be a combination of three facets (or axes):
1) economicpragmatic values;
2) ethical-social values;
and 3) emotional-developmental values.

• Economic-Pragmatic Values: This group of values are necessary to sustain the various organizational subsystems by allowing them to participate in the production-consumption system. Encompassing efficiency, performance standards and discipline etc. these values guide such activities as planning, directing and controlling.

• Ethical-Social Values emerge from norms and mores as to how people should conduct themselves in public and at work and go about their personal and professional relationships. Values such as honesty, integrity, respect and loyalty belong to this group.

• Emotional-Developmental Values create impetus for action. These values are related to intrinsic motivation: optimism, passion, perceived freedom, satisfaction and happiness are a few examples of such values. Deficiency in these values hinder involvement and and organizational commitment.

Simon L. Dolan and Yochanan Altman (2012) in Managing by Values: The Leadership Spirituality Connection, advocated that the fourth axis of spiritual dimension has to be added to three groups of values.

The task of an effective leader is to select the value set that is aligned with the mission and vision of the organization and manage so that they become shared values. Leader has the ability to influence his followers but he has to use his influence in a rational way and emotional way so that the followers achieve their economic and emotional needs under his guidance as an organization.

Practicing MBV

MBV is a process for making lasting, positive performance improvements impacting their culture, strategy, processes and people.


Leaders have to define the values for their organization first. Vaues become the basis for decision-making and action/behavior in the organization.


Values have to be communicated and articulated. Everyone becomes informed about the organization’s mission, vision, values and aspirations—including their importance. This may include formal and informal meetings, resource materials for individuals and printed communications. Most important is the examples set by the leaders of the organization in living the values being communicated.


This step takes lot of effort and time.  Behavioral rountines that reflects the values have to be developed and the members of the organization have to be provided opportunities to exhibit the recommended behavior through role plays and actual situations. Monitoring by the leaders to identify the deviations and to correct the deviations has to be done and this responsibility is to be given more and more people so that organization wide monitoring of value reflecting behavior becomes the norm in the organization.

Management by Value has to result in behaviour change to give results.


Dolan, Simon L. and GarcĂ­a, Salvador, Managing by Values in the Next Milenium: Cultural Redesign for Strategic Organizational Change (June, 2000). Available at SSRN: or

Managing by Values: A Corporate Guide to Living, Being Alive, and Making a Living in the 21st Century
S. Dolan, S. Garcia, B. Richley
Springer, 28-Jul-2006 - Business & Economics - 236 pages

This book develops a new framework, Management by Values (MBV), for strategic and competitive advantage. Through its step-by-step guide to implementation, it serves as a necessary strategic leadership tool whose practical application will mine market potential through its relevance to individual organizational members.

Simon L. Dolan and Yochanan Altman (2012), "Managing by Values: The Leadership Spirituality Connection", PEOPLE & STRATEGY, Volume 35/Issue 4

MBV Consultant

Managing by Values
Kenneth H. Blanchard, Michael J. O'Connor, Jim Ballard
Berrett-Koehler Publishers, 1997 - Business & Economics - 154 pages

Today's business world is characterized by increasing change - technological, cultural, social, economic, and personal - the net effect of which is increasing anxiety, insecurity, and more pressure than perhaps ever before on today's employees, managers, and business owners. Managing By Values provides a practical, proven new solution for addressing these issues. Blanchard and O'Connor provide a framework for stability, continuity, and growth in the midst of these challenges. Written in the simple, direct story format that has become a trademark of Ken Blanchard's previous books, Managing By Values builds on the mass of diverse research, experiences, and literature on organizational, group, and individual performance and satisfaction. Based on the authors' research and applied real-world experience with client organizations, Managing By Values provides a practical, proven approach for how to give your organization the gift of a promising future while also discovering a way for all of its stakeholders to be satisfied in the process.

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