Value-based management in learning organizations

Value-based management in learning organizations

Learning organizations

Soren Nymark - Value-based management in learning organizations through 'hard' and 'soft' managerial approaches: The case of Hewlett-Packard is about 'Learning organizations' enabling companies to remove hierarchical levels and to introduce a flatter organizational structure, which can lead to reduced costs and increased productivity.

A recent Danish study has proved coherence between a flat, integrative organizational structure and an increased productivity. This enables a kind of management in which the managerial form is not as direct as it is in more traditional structured companies.

Value-based management is advanced as a possible answer to the question of which managerial form that is appropriate for these kind of companies.

In the article, value-based management is described as well as the underlying factors that are affected by such a managerial form in learning organizations.

Value-based management can fundamentally be seen as an indirect managerial style. It is
concerned with making the employees carry out the correct work assignments on their
own initiative without ordering them directly to do so. In learning organizations / knowledge based companies the circumstance also exists that the management does not know what the employees specifically are supposed to do, and the management is not expected to know. The management’s role is to define, create, and communicate the conditions in which knowledge workers can work. Conditions about what is acceptable behavior, and which actions are appropriate in relation to the management’s vision and company values. By this information from the management the employees deduct their understanding of conditions and direction in the company. Value-based management is thus a managerial form that is concerned with making a group of people work together towards a mutual goal without explicit managerial pressure and use of power.
 

Required managerial elements in relation to value-based management are advanced.

Examples from Hewlett-Packard are used to illustrate both the use of value-based management in practice and the underlying factors.