Database Reference
In-Depth Information
For a company with relatively small capital, the earnings and cash flow perspective may not pro-
duce appreciably different results, but, even in such cases when we factor in accounts payable and
inventories, the two approaches may provide highly divergent views.
15.2.3 Value to Managers
By convention, in the discussions on stakeholders, senior managers are usually grouped with
owner/investors, which is incorrect. Managers with their responsibilities for driving the growth
and profitability of the company have a different perspective of the values that are important to
them vis-à-vis the owner/investors.
Senior managers look for the following:
◾
The freedom to articulate the vision of the organization and translate the same into objec-
tives for the organization
◾
The latitude to focus on a select set of strategies and tactics
◾
The latitude to form the management team that believes in this vision and gels with this
approach
◾
The facility to define the measures of performances for the organization as a whole as well as
the individual business and operational managers
◾
The authority to allocate and deploy systems and resources for executing the plans
◾
The authority to institute and implement systems for measuring and reporting on the mea-
sures of performance for different functions and levels of the organization at predefined time
periods or on ad hoc basis
◾
The latitude to mold the policies and procedures in line with the company's vision
◾
The latitude to commit research and development (R&D) efforts on technological and man-
agerial issues that they perceive to be of importance for the future
◾
Remuneration that is commensurate with risks and targeted tasks
With the increase in the pace and pulse of businesses, the leeway available for CEOs and other
senior executives has been diminishing continuously. The window of tolerance for failing revenues
or periods of executing corrective strategies is progressively becoming smaller. In such circum-
stances, the hard-driving managers become conscious of the value that is catalyzed by them for the
enterprise and the returns that they accrue to themselves. It is a supreme irony of our times that,
with their increasing power and prestige, the CEOs and members of a management team are also
most vulnerable to being summarily replaced due to perceived nonperformance.
15.2.4 Value to Employees
As described in Chapter 1, Section 1.3 “Management by Collaboration,” the dynamic changes in
the market and global competition being confronted by companies have resulted in more flexible
organizations. These organizations are populated with empowered workers who are multiskilled
with enhanced responsibilities. No organization can sustain the generation of value at high levels
for extended periods without a corresponding value added to the employees of the company.
Employees value factors like the following:
◾
Opportunities for participating and contributing significantly to the activities of the
enterprise
◾
Reasonable compensation
