What Are Management Values and Why Are They Important?

By Indeed Editorial Team

Published November 20, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Effective management is an essential skill for organizations to succeed, grow, and gain long-term profitability. Value-based management is one of these approaches, where the organization encourages leaders to implement strategies that increase overall value. By understanding what you can do within the organization to focus on value-based management, you can help the company improve business performance and reach its short- and long-term goals. In this article, we explore what management values are, provide a list of ways to add value, share the benefits of managing for value, and provide a list of values.

What are management values?

Management values refer to a type of management strategy that many organizations encourage leaders to adopt to increase long-term business growth, success, and profitability. It's also called value-based management. Value-based management focuses on management techniques and activities that increase value for the organization. It helps leaders align organizational goals, analytical tools, and strategic methods to the overall success of the organization and prioritize activities according to how much value they contribute to the organization. As a result, managers can often make better decisions that are more aligned at all levels of the organization.

Not only does value-based management improve long-term business success for the organization, it also helps eliminate waste, control costs, and improve efficiency. Organizations can allocate their resources more effectively and focus on improving results to help ensure they leverage their most valuable resources and materials fully. Management for value can also help ensure the organization is well-positioned financially to prioritize activities that can increase that value.

Related: 15 Important Professional Values for the Workplace

Ways to add value through management

There are many ways an organization can focus on adding value using specific management techniques and approaches. Here are a few methods to consider:

Collect feedback at all levels

Feedback is crucial for all organizations. Management teams benefit from collecting internal and external feedback at all levels of stakeholders that interact with the organization. Whether you're requesting feedback from customers or employees, you can gain important data that indicates how the organization or management team can improve. For example, organizations often send out customer feedback surveys to understand whether customers enjoyed their products and what they might like to see in the future. It helps organizations determine whether their products are successful and how they can improve the products to gain more revenue and market share.

Internal and external feedback also helps organizations collect employee concerns or suggestions. They can use these concerns and suggestions to improve strategic operations and identify new operational processes that make the organizations more efficient. Feedback can also make employees feel recognized and heard within the organization, which can improve employee satisfaction and motivation.

Related: The Importance of Considering People's Values at Work

Develop or improve products and services

Organizations can help ensure they're always innovating and meeting consumer demand by continuously developing or improving upon their products and services. Since consumer trends and needs are always changing, organizations can increase their value by continuously adapting their products and services according to what consumers want. For example, the organization can create new product lines that fit the pains and demands of customers or they can add new features to existing products. The first option might help the organization reach new customer segments, and the second option can help them gain market share with existing customer segments.

Employees can organize customer feedback surveys, focus groups, and questionnaires to identify what items and features customers want to see the organization create. These market research methods also help the organizations determine the areas that aren't performing well, which helps them create strategies to improve these areas or discontinue those product lines and features. Not only can organizations reduce costs by eliminating products that don't generate profit, they can also gain increased profit by creating new products and services that align with customer needs.

Consider alternative vendors

Many organizations rely on a network of external vendors to operate smoothly and successfully. These vendors might provide human resources, materials, software, and data. While you might have worked successfully with the same vendors for years, it's beneficial to revisit your list of sellers periodically. Frequent audits can help the organization identify opportunities for cost-savings, such as finding alternative vendors that offer the same resource for less money or negotiating better contracts. You might also find vendors that provide alternatives at a lower price or that can help make the production process more efficient.

Benefits of managing for values in the workplace

Values in management play an important role in helping organizations improve their short-term and long-term success and profitability. The organization's value system guides workplace culture, employee morale, operation processes, customer relationship management, and vendor relationship management. There are some benefits to managing for values in the workplace:

Employee development

Human resources are one of the most valuable assets for any company. An organization with a professional, knowledgeable, and well-rounded workforce can generate better performance and results. A strong value system guides managers to implement techniques that help ensure the overall development of employees in all areas. For example, if one of the organization's values is delivering quality, managers can focus on delivering transparent feedback and training programs to help employees become more skillful. As a result, employees are always aware of new methodologies and technology that can help them in their roles.

Related: 10 Management Roles for Workplace Success (With Examples)

Create healthy attitudes

Values create the foundation for behaviours, attitudes, and actions within an organization. When managers and employees understand the organization's value system, they're more likely to understand the attitudes, perceptions, and motivations that guide their actions and behaviours. Organizations with strong values and managers that demonstrate these values daily encourage employees to develop healthy attitudes toward customers, their managers, their team members, and other internal and external stakeholders. It also helps create a healthy work environment that promotes employee morale and job satisfaction.

Related: What Is Work Culture? Definition, Elements, and Examples

Promotes organizational change

Organizations are always looking for ways to improve internal processes. Value systems can facilitate these organizational changes and change management initiatives because they help guide the company's vision and mission. Organizations can evaluate what's currently happening and where they want to be in a certain number of years. They can also analyze what competitors are doing and re-assess how they compare. Values also help ensure organizational changes and change activities remain aligned with the company's overall goals.

Related: The Importance of Leadership and Culture in Organizations

Guides work ethic

Work ethic refers to the belief in the importance of work resulting from the determination or desire to work hard to achieve certain results or reach certain goals. It revolves around a set of values and virtues that strengthen and guide your character and capabilities to work hard. Work ethic includes skills, initiative, habits, attitudes, interpersonal visions, and desires that employees have while they're at work. Organizational values can create an environment where employees believe their work has intrinsic value, motivating them to improve their performance.

Management values to consider

Here are some values of management you can consider:

Accountability

Accountability means evaluating individuals and organizations on their performance and behaviours based on their responsibilities. Corporate accountability helps ensure employees and managers at all levels within the organization remain answerable to its internal and external stakeholders. It also means that organizations are required to justify their reasons for deviating from their goals, vision, mission, or strategic direction. Accountability helps organizations track all their successes and explain potential failures to help ensure they only happen once.

Related: Core Value Examples for the Workplace (With Tips and FAQs)

Delivering quality

Delivering quality is a measure of performance that employees deliver within the organization and to the customers. Quality measurements might include productivity, defects, effectiveness, and efficiency. This value helps organizations reach long-term growth, success, and profitability because consistency quality ensures growing and loyal customers. Organizations that have this value typically focus on activities that optimize their resources and create external relationships that make their production process more efficient. They also prioritize customer relationship management to meet customer needs and address any concerns.

Collaboration

Many organizations prioritize collaboration as an important value for their employees to demonstrate. Collaboration means employees work well together, respect differences in ideas and opinions, and make meaningful contributions to the team. Organizations with high collaboration skills are often more productive and resourceful than organizations with a focus on independence. Most collaboration efforts require effective leadership and guidance. It's important for managers to create an environment that facilitates collaboration, such as transparent communication, frequent feedback, and positive company culture.

Respect

Respect is the foundation of healthy company culture and employee satisfaction. It refers to having admiration and appreciation both for individuals and the company's rules and policies. It's important for managers to help employees create good habits focused on showing respect and appreciation for internal and external stakeholders. For example, you can show respect by trying to understand team members, being empathetic of differences, being polite, showing gratitude, and looking for commonalities.

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