Organizational Correlates of the Goals of Business Managements

Summary T his paper presents the goals of business managements as expressed by the chief executives or deputy chiefs of 145 business establishments. The goals most frequently expressed by management are profits, public service in the form of good products, and employee welfare. But other goals are also important such as growth, efficiency, meeting competition, and operating the organization. Managers of large businesses more often speak of public service than do managers of small businesses, probably because they are relatively secure and because they are in the public eye. If they are unionized, large businesses show more interest in the welfare of their employees than do small businesses. If nonunion, the relationship is reversed. The explanation of these findings regarding expressed interest in employee welfare is probably complex, involving the psychological distance between manager and employee, the varying nature of collective bargaining, and the ideologies of owners and professional managers. The higher the proportion of white‐collar employees, the fewer the managers who mention profits. Similarly, the higher this proportion the more managers mention growth as a goal (but still not more than the number mentioning profits). These findings appear to reflect the varying cultural milieu of white‐collar and blue‐collar establishments. The finding becomes all the more important in view of the long‐term trend toward greater upgrading and professionalization of labor. Managers of “successful” growing businesses, like large businesses, more frequently speak of good products than do managers of declining businesses. They are also more interested in meeting and staying ahead of competitors. Their orientation is outward; they express less interest in such internal matters as running the organization. Although these findings do not directly contradict the position of Adam Smith that the public interest is best served by the pursuit of “own self‐interest,” they do suggest that the success of the business itself is furthered not by the pursuit of own self‐interest but by the pursuit of public service in the form of good products. On the other hand, there is no evidence in the present data that the managers' pursuit of broader social responsibilities, such as employee or community welfare, furthers the growth of the business. These data suggest that understanding and evaluation of organizations and institutions require a consideration of their broad functions and characteristics. It is the characteristics of the total organization and of all its members that determine its goals. If it has a function outside its membership, it is this function that must be given attention, rather than the rewards it offers its leaders, its owners, or its members.