Market Based Management

Market-Based Management® (MBM®) enables organizations to succeed in the long-term by applying the principles that allow free societies to prosper. Just as upholding values such as free speech, property rights, and progress are important to a healthy, growing society, they are also pivotal in fostering a healthy, growing organization.

By applying the components of a free-market society to Koch Industries through this management philosophy, Charles G. Koch was able to build a successful, multi-national company. Over the last forty years, Koch Industries has grown to have a presence in nearly sixty countries and currently employs about 60,000 people. MBM’s proven success in the business world can provide great value to non-profit organizations because, at its essence, it focuses on creating real, sustainable value for society.

There are two main components to MBM, the ten guiding principles and the five dimensions. The ten guiding principles are key to the internal culture of an organization: integrity, compliance, value creation, principled entrepreneurship™, customer focus, knowledge, change, humility, respect, and fulfillment. When put into action, these principles combine to create a dynamic and positive culture.

An organization’s culture is the foundation of success, and a healthy, thriving workplace is a prerequisite to being able to solve problems using the five dimensions of MBM.

By viewing organizations through five different dimensions, problems are more easily diagnosed and remedied. They are: vision, virtue and talents, knowledge processes, decision rights, and incentives. These dimensions each provide a lens through which to understand and solve complex obstacles that organizations face.

To learn more about MBM and the importance of these dimensions and principles, check out the Guiding Principles and Five Dimensions.

mbm image