Friday, February 19, 2010

Goal Congruence

There is a management control concept known as goal congruence.

A good management control system ensures that individual's action taken to achieve personal goals also help to achieve the organisation's goals. In a goal congruent process, the actions people are led to take in accordance with their perceived self-interest are also in the best interest of the organisation.

Example: Silicon Valley is one of the major sources of new business creation and wealth in the US economy. It attracts people with certain common characteristics: an entrepreneurial spirit, a zest for hard work, high ambition, and a preference for informal work settings. Over the last 50 years, it has created companies such as HP, Microsoft, Apple, Sun Microsystems, Oracle, etc. Even after the boom-and-bust cycle, the old line companies and the dot com survivors have kept up Silicon Valley's reputation as the centre of technology innovation.

Do refer to management guru, Vijay Govindrajan and Robert Anthony's book on the subject for more on this.

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