Developed by Koch Industries’ CEO Charles Koch, Market-Based Management® (MBM®) prepares individuals to deal successfully with the challenges of growth and change while fostering a healthy, growing organisation. By applying the same shared values that unleash prosperity in free societies – such as value creation, integrity, responsibility, free speech and tolerance – we encourage each other to take initiative and to challenge.

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

  • Vision: Determining where and how the organisation 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 organisation

When these dimensions are applied in an integrated, mutually reinforcing manner, they create continuous transformation and positive growth.

The MBM® philosophy enables employees to constantly search for opportunities to improve and grow. Rooted in guiding principles such as Integrity, Humility and Respect, the MBM® framework attempts to bring some of the workings of the free market inside the company—building on the belief that freedom is a powerful engine for generating well-being, discovery and growth.

In his latest book, “Good Profit,” Charles Koch shows managers, entrepreneurs, leaders, students, innovators, and employees of all kinds — and in any field — how to apply the principles of his revolutionary Market-Based Management® system to generate good profit in their organisations, companies and lives. To learn more about this book, please click here, and to learn more about MBM® philosophy, click here.

Guiding Principles

1. INTEGRITYHave the courage to always act with integrity.
2. STEWARDSHIP & COMPLIANCEAct with proper regard for the rights of others. Put safety first. Drive environmental excellence and comply with all laws and regulations. Stop, think and ask.
3. PRINCIPLED ENTREPRENEURSHIP™Practice a philosophy of mutual benefit. Create superior value for the company by doing so for our customers and society. Help make Koch the preferred partner of customers, employees, suppliers, communities and other important constituencies.
4. TRANSFORMATIONTransform yourself and the company. Seek, develop and utilize the visions, strategies, methods and products that will enable us to create the greatest value.
5. KNOWLEDGEAcquire the best knowledge from any and all sources that will enable you to improve your performance. Share your knowledge proactively. Provide and solicit challenge consistently and respectfully.
6. HUMILITYBe humble, intellectually honest and deal with reality constructively. Develop an accurate sense of self-worth based on your strengths, limitations and contributions. Hold yourself and others accountable to these standards.
7. RESPECTTreat everyone with honesty, dignity, respect and sensitivity. Embrace different perspectives, experiences, aptitudes, knowledge and skills in order to leverage the power of diversity.
8. SELF-ACTUALIZATIONBe a lifelong learner and realize your potential, which is essential for fulfillment. As you become increasingly self-actualized you will better deal with reality, face the unknown, creatively solve problems and help others succeed.

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