What is Market-Based Management?
Market-Based Management (MBM®) is a management philosophy that empowers individuals and organizations to succeed long-term by applying the principles of mutual benefit.
History demonstrates that peaceful and prosperous societies tend to practice certain common principles, such as guaranteeing free speech, protecting private property rights, and ensuring that the inherent dignity and rights of all are equally protected. We’ve found that these principles can be analogously applied within organizations to help employees fulfill their potential, and in doing so help the organization grow and succeed as it creates value for others.
By applying these principles of human progress to Koch Industries through this management philosophy, Charles G. Koch was able to transform what was a small engineering firm into the country’s second-largest private company. Since the 1960s, Koch Industries has grown to have a presence in over 70 countries and currently employs about 130,000 people worldwide (about 65,000 in the U.S.). But MBM isn’t a business philosophy. It’s a management philosophy. Because it’s based in principles, its proven success is seen not only across industries and countries at Koch Industries, but also among many of the organizations within the Stand Together philanthropic community, including think tanks, grassroots organizations, impact funds, and community-based nonprofits.
There are two main components to MBM: the five dimensions and the eight MBM Guiding Principles.