Since I have been interested in the Koch family and Koch Industries I recently finished “Market Based Management” by Charles Koch. I was somewhat disappointed to learn that his is really the only book published by any Koch. I would love for Charles Koch and his brother to come out with autobiographies since they are both getting up in age. Also another reason to write an autobiography is not to allow historians to revise history. The first chapter was a mini biography about Koch Industries and Charles but nothing like a true autobiography Market Based Management MBM uses the principles of different fields in order to run a business or organization in a more effective way. The book points out that some of it is common sense and it is but if so many people don’t use common sense isn’t it really uncommon knowledge. Anyone familiar with economics and business would be very familiar with the terms in the book. The book talks about vision, knowledge processes, decision rights, and incentives. People would think that a company like Koch Industries is a command and control organization where Charles Koch delivers orders to his employees. This is the furthest thing from the truth. Employees are given power to look for ways to improve things. Most companies don’t really encourage this because they have bureaucratic layers of only allowing certain people to do certain work. Employees at Koch are rewarded for improving things or creating value. Charles Koch is the first to admit that Koch Industries has had some failures in their business. In the back of the book is a list of business that Koch no longer operates.
MBM seems to be more capitalist oriented than traditional management systems. Having employees understand the big picture along with how they can create value is important. Some employees just see themselves as doing tasks, but don’t really understand how they are impacting the company, shareholders, and the reputation of the company.
Koch is a private company. This means they don’t have to disclose quarterly or annual earnings. One positive to this is that that Koch doesn’t have to comply with burdensome requirements in terms of compliance or requirements that public companies have to comply with. I am somewhat surprised other companies in the investment have not gone from public to private due to the burdensome regulations and rules involved. The only negative downside is that if the company was public individual investors could invest money in the company which would give Koch capital to purchase equipment, invest in new projects, or improve existing plants. Charles Koch has one son named Chase Koch who I have a feeling might take over once Charles passes. The company started with Fred Koch and so far has stayed in the family. It will be interesting to see what happens in the coming years with the company and whether they stick to market based management.
MBM seems to be more capitalist oriented than traditional management systems. Having employees understand the big picture along with how they can create value is important. Some employees just see themselves as doing tasks, but don’t really understand how they are impacting the company, shareholders, and the reputation of the company.
Koch is a private company. This means they don’t have to disclose quarterly or annual earnings. One positive to this is that that Koch doesn’t have to comply with burdensome requirements in terms of compliance or requirements that public companies have to comply with. I am somewhat surprised other companies in the investment have not gone from public to private due to the burdensome regulations and rules involved. The only negative downside is that if the company was public individual investors could invest money in the company which would give Koch capital to purchase equipment, invest in new projects, or improve existing plants. Charles Koch has one son named Chase Koch who I have a feeling might take over once Charles passes. The company started with Fred Koch and so far has stayed in the family. It will be interesting to see what happens in the coming years with the company and whether they stick to market based management.
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