The Science of Success: How Market-Based Management Built the World's Largest Private Company

The Science of Success: How Market-Based Management Built the World's Largest Private Company

by Charles G. Koch

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Overview

Charles Koch may very well be the most successful businessman you've never heard of. Under his leadership, Koch Industries has become a dynamic and diverse enterprise that Forbes called "the world's largest private company."

This groundbreaking book includes the same material used by the leaders and employees of Koch companies to apply Market-Based Management (MBM) to get results. In it, Charles Koch outlines the unique management methodology developed and implemented by Koch Industries. Koch credits MBM for its 2,000-fold growth since 1967, with today having 80,000 employees in 60 countries and with $90 billion in revenues in 2006. MBM is a scientific approach to management that integrates theory and practice, and provides a framework for dealing with the ongoing challenges of growth and change. There really is a science behind success, and it can be applied to any organization.

MBM is rooted in the Science of Human Action, and is defined by five dimensions:

  • Vision—Determining where and how the organization can create the greatest long-term value
  • Virtue and Talents—Helping ensure that people with the right values, skills and capabilities are hired, retained and developed
  • Knowledge Processes—Creating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitability
  • Decision Rights—Ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable
  • Incentives—Rewarding people according to the value they create for the organization

When these dimensions are applied in an integrated, mutually reinforcing manner, they create continuous transformation and positive growth. Any organization—corporation, small business, nonprofit, government agency—can apply these proven principles.

In addition to an in-depth discussion of MBM's five dimensions, this book also draws on Koch's candid examples of his company's successes and failures. Born out of a life-long study of economics, science, philosophy, psychology, political theory and history, MBM is essentially a practical business application of the principles that have led to innovations and the most prosperous, peaceful, robust economies in history. Let this book show you how to apply the same management philosophy that has served Koch Industries so effectively. MBM will benefit you, your company, your customers and your employees. For more information about Market-Based Management, visit www.mbminstitute.org.

Product Details

ISBN-13: 9780470148549
Publisher: Wiley
Publication date: 05/11/2007
Series: Wiley Desktop Editions Series
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 208
Sales rank: 111,309
File size: 712 KB

About the Author

CHARLES G. KOCH is Chairman of the Board and CEO of Koch Industries, Inc., a position he has held since 1967. Since then, the company has been transformed into a dynamic and diverse group of companies in refining and chemicals, fibers and polymers, commodity and financial trading, and forest and consumer products. Familiar Koch company brands include STAINMASTER carpet, LYCRA spandex, Quilted Northern tissue, and Dixie cups. Koch has continuously supported academic and public policy research (including numerous Nobel Prize winners) for more than 40 years, and has helped build a number of market-based organizations. Koch received a bachelor's degree in general engineering and two master's degrees—in mechanical and chemical engineering—from the Massachusetts Institute of Technology.

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Table of Contents

Preface.

Acknowledgments.

Chapter 1. Evolution of a Business.

Chapter 2. The Science of Human Action.

Chapter 3. Vision.

Chapter 4. Virtue and talents.

Chapter 5. Knowledge Processes.

Chapter 6. Decision Rights.

Chapter 7. Incentives.

Chapter 8. Lessons Learned.

Appendices.

Partial List of MBM Models.

Notes.

Bibliography.

Index.

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The Science of Success: How Market-Based Management Built the World's Largest Private Company 3.8 out of 5 based on 0 ratings. 5 reviews.
RolfDobelli More than 1 year ago
The “science of human action” and “market-based management” (MBM) form the core ideas of the libertarian business philosophy and the successful commercial operating principles of Charles G. Koch, chairman and CEO of Koch Industries Inc. (KII). Following these principles, Koch has enjoyed astounding success: A $1,000 investment in KII in 1960 would now be worth $2 million (with a reinvestment of dividends). During most of this period, Koch himself planned KII’s strategy and ran the company. Here, with a few jargon pitfalls, he details his business methods and operating practices. Koch is known for his heavy financial support of conservative political causes and candidates, but this is not a political book. It is, in fact, more a work of business philosophy than a hands-on manual for Koch’s MBM system, which he describes as an approach and attitude based on a selection of “mental models” and not as a linear path. getAbstract recommends Koch’s thoughtful exposition to all 80,000 KII employees and to business executives who want some clues about emulating KII’s success.
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