Goal Setting Theory Flashcards
Latham & Locke (2007)
- Understanding a person’s motivation to achieve/do something comes from a person’s: needs, values, goals, affect, and performance.
- Needs are linked to a person’s survival and well-being: it explains why people take action. E.g. food and sleep. These are needs that activate people to do something (make food, go to sleep).
Key findings Lotham & Locke:
- Higher goals lead to greater effort and persistence than easy goals, given a committed employee
- Goals that are specific and difficult lead to a higher level of performance than vague goals (e.g. ‘do
your best’)
Limitations Lotham & Locke
- The research is done on individualistic-basis (interaction is missing)
- Works in particular cultural contexts
- The focus is on performance goals, whereas learning goals (in university, education) are often better
than performance goals - What if goals are in conflict with each other?
Thompson & MCEwen (1958)
- Emphasize the interdependence of complex organizations within the larger society and the
consequences this has for goal setting - Emphasize the similarities of goal-setting processes in organizations with greatly different goals
Interdependence
the dependence of two or more people/organizations on each other.
Strategies for dealing with the organizational environment:
- Competitive
- Co-operative: bargaining, co-optation, or coalition
- Competition (encourages rivalry)
Competition is a process whereby the organization’s choice of goals is partially controlled by the environment. Competition is a means of eliminating inefficient organizations.
Bargaining
- Periodic review to stay satisfied (supplier and customer)
- Focusses on resources rather than goals
- Involves direct interaction with other organizations (unlike competition)
- Sets limits on choice of goals
- Results in environmental control over organizational goals
- Reduces probability of arbitrary, unilateral goal-setting
Co-optation
- Increases the likelihood that related organizations will find compatible goals (by overlapping
actions, e.g. interlocks: the CEO of Netflix is also in the board of directors of Heineken) - Reduces possibilities of contradictory actions (by two or more organizations)
- Aids in the integration of a part in a complex society
- Results in environmental control over organizational goals
- Reduces probability of arbitrary, unilateral goal-setting
Coalition
- Common purpose of multiple organizations
- Most extreme form of environmental conditioning of org. goals
- Most widely used when two organizations pursue a goal calling for more support (especially for
more resources, e.g. gigantic facilities like dams or atomic reactors) - Requires a commitment for joint decision of future activities
- Therefore, limits unilateral or arbitrary decisions
Competition
interaction with the environment that influences the least control over the organization’s goals setting process, whereas coalition influences the most control over the goal setting process.
Arbitrary
on the basis of random choice or personal impulse, rather than any reason or system
Unilateral
action/decision performed by or affecting only one person (/group/organization)
involved in a situation, without the agreement of others
Conclusion Thompson & MCEwen (1958)
- If goals are formulated arbitrarily or unilaterally, a company cannot continue indefinitely. An organization should be aware and react to its relations with the environment.
- Competition, bargaining, co-optation, and coalition help gaining support from the organizational environment. Therefore, the selection of one or more of these strategies is a strategic problem
Interaction with its environment:
- Often influenced by a need of resources (RDT)
- Pressure from the environment ‘to do the right thing’ (LT) (e.g. LIDL is changing from a cheap
and efficient possible way due to the environmental pressure, to shifting their focus on sustainability and animal welfare
Sitkin et al (2011)
In this paper they move away from the fact that everything is about performance goals but they also look what organizational goals do to someone’s learning process. In addition, there is a take of combining goal-setting with dynamic capabilities (DCT).
Stretch goals
seemingly impossible (you don’t know how to reach) organizational goals/extreme organizational goals. Promote new ways of thinking and acting by creating an internal crisis. Set a goal that is almost impossible to reach given the organization’s current capabilities (practices, skills, knowledge).
Stretch goals
seemingly impossible (you don’t know how to reach) organizational goals/extreme organizational goals. Promote new ways of thinking and acting by creating an internal crisis. Set a goal that is almost impossible to reach given the organization’s current capabilities (practices, skills, knowledge).
Underlying mechanisms of stretch goals (more detailed in model section):
- Cognitive (reasoning): attention vs. hypervigilance (extremely sensitive to surroundings)
- Affective (emotions): enthusiasm vs. aversion to change
- Behavioral (company culture/attitude): broad search for new sources vs. chaotic change
Stretch goals are…
- beneficial
Good past performance (met its goals, everybody is happy with the goals)
Slack resources have been large (a lot of (e.g.) financial resources) - disadvantageous
Weak past performance
Slack resources at a minimum level (low level of resources available)
Limitations Sitkin et al (2011)
More clearly identify control mechanisms, learning strategies, and decision aids to achieve greater effectiveness in stretch goals
Kotlar & De Massis (2013)
Goal setting involves coalitions, especially in family firms.
A crucial point in family firms: the moment of succession
Family firms complexity:
- Goal diversity
- Conflicts between circles
- Conflicts within circles (within particular family members)
- Conflicts between generations
four types of individual goals
- Goal content (economic vs. non-economic)
- Goal recipient (family vs. non-family)
- Family & economic
– generate wealth for the family - Family & non-economic
– family harmony, status - Non-family & economic
– firm’s economic, financial performance - Non-family & non-economic
- employees, community
Goals reflect membership
(the position of a person, e.g.: function within company) in the circles, different generations (younger vs. older) do have different goals, and goals reflect stage in the succession process of the firm. All these aspects contribute to goal diversity within a firm.
Goal diversity
(how many different goals there are within an organization) reaches a maximum when the next generation is about to take over/when a new CEO is being appointed.
To manage goal diversity
bargaining and/or stabilization
Bargaining
negotiate for a compromise
Stabilization
compromise for certain goals between family members/employees
Professional mode
in the business setting (more formal), this mode results in contracts,
agreements, ‘administrative’ bargaining and formal stabilization (e.g. everything is discussed in
meetings)
Family mode:
informal, involves values, moral codes, emotions (e.g. can be discussed during
family dinner)
Conclusions
• If goal diversity is stabilized (through social interaction), it leads to a stronger commitment towards goals (especially when achieved through family interaction).
• In family firms, the complexity of strategy processes and performance is much higher although the main focus is the same for any other business organization: achieve positive economic performance.
