Market-Based Management. Charles G. Koch's Contribution to Organizational Thought

Abstract

Market-based management is an original approach to management developed by Charles Koch around the developed principles of the Austrian school of economics and applied in an entrepreneurial context. This article reconstructs Koch’s managerial ideas, highlighting the foundation of his approach in the thought of F.A. von Hayek, L. von Mises and J. Schumpeter and compares his views on organization and management with the views of the leading representatives of the modern management thought. The article consists of introduction and three main sections. The first section contains an outline of intellectual biography of Charles Koch and a short history of the Koch Industries. In the second section I present the main tenets of the market-based management and trace back their roots to the ideas of scholars working within the tradition of Austrian school of economics. The third section concludes the paper with the critical analysis of Koch’s theoretical acumen, indicating their similarity to the previously developed concepts in organizational science, and some remarks on their highly successful implementation in his managerial practice.