What is Stakeholders Value Management and its application

Over years, organizations have moved from the goal of profit maximization to wealth creation for shareholders. The present era is of ‘Stakeholders’ and the organizational objectives revolve around creating value for them. ‘Product – centric’ view has made way for ‘People – centric’ approach. Stakeholders Value Management includes a whole gamut of activities, which aim to maximize value for all the stakeholders – shareholders, customers, and employees etc. Since the expectations of stakeholders are varied and ever evolving, it takes the effort of the entire organization to create value. Process such as Management by Objective (MBO) becomes very important because it involves willingness and commitment of employees at all levels. Organizations employ Activity-based Management (ABM) to distinguish between value adding and non-value adding activities, to reduce time and effort for performing an activity and to improve the overall performance of the company. Valuebased Management (VBM) is yet another process applied by organizations to generate value for its stakeholders by detecting areas of additional value creation. A whole range of activities – value-based analysis, target setting and managerial commitment, employee training and empowerment, gain sharing, etc. are intertwined to realize full potentials of VBM. To top it all, the concept of Balanced Scorecard (BSC) is being increasingly used by the organizations to generate and manage value for their various stakeholders. Perspectives related to financial, customers, internal processes and learning & innovation measures form the core of a Balanced Scorecard. It requires a concerted effort from a management team to convert the organization’s mission and strategy into measurable targets, which can bring the desired change. All these tools and processes have empowered present day organizations to meet the value expectations of its stakeholders.