Introduction To Market-Based Management

To begin with, Introduction to Market-Based Management was an excellent booklet and provided an extreme amount of information to organizations who currently follow a command-based management approach. Although, according to the market-based management booklet a market-based approach is best for organizations who want to be successful, it is by no means an easy transition. In order for a company to fully transition from command-based management to market-based management they have to undergo a tedious, yet fulfilling process. After reading how successful Koch Industries is and how they once had fewer than 700 employees, about 1,000 miles of pipeline, and operations focused on Kansas and Oklahoma twenty-five years ago has grown into a company that has an annual track record above industry average lets me know that their use of "market-based management" is the greatest move any organization can make.

The basis of the market-based management booklet is to provide readers with the principles the authors believe are important in making progress toward their first objective: "to articulate the conceptual framework and principles of market-based management in a manner that could be understood by the entire organization" (2). In my organization this objective does not apply. Any information would not be "articulated" to the whole organization,but to a managers and higher ups. I like this way of thinking because the whole organization will feel they are involved and play an important role in the outcome of the organization.

Furthermore, the booklet goes on to state that organizations and businesses need to tap into their employees talents, abilities, and knowledge in order to serve the customer better. According to the authors of the booklet, to accomplish this goal they must use market-based management because it provides a framework on how they can meet the requirements. In addition, the authors provide several reasons to why an organization should choose the market-based management approach. For one, centralized planning will limit an individual knowledge because it is assumed that leaders know whats best for everyone. I agree that leaders can't possibly have all the knowledge needed to run a successful organization. In addition, in order for a company to be successful they need to also apply the belief that market principles applies to external as well as internally. According to the booklet, companies who fail to apply market principles internally, "will one day find themselves distant competitors to the firms that do" (5).

Another market principle organizations must apply is that individual freedom is a must and will make a big difference in "economic and social" well being. Market-based management focuses on finding an organization's structures, responsibilities, values, and incentives that motivate employees to want to fulfill the organizations mission. Now this does not mean that employees of an organization can do as they please and what they think will increase revenue. Market-based management also seeks to divide decision making amongst all employees so the right person with adequate knowledge of the job and the right incentives will make each decision and will take responsibility for the outcome. In my opinion, this will stop the blame game and hold everyone accountable for their actions and decision making. This will also encourage everyone in the organization to make good decisions because the organization is not limiting their knowledge.