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Tuesday, November 08, 2005

Koch Industries' Mission Statement

Koch Industries has a pretty interesting principles that they adhere to as part of their trademarked philosophy called Market Based Mangement® (MBM)

MDM® Principles

1. Integrity
Conduct all business affairs lawfully and with integrity.

2. Compliance
Strive for 10,000% compliance, with 100% of us fully complying 100% of the time. Ensure excellence in environmental, safety, and all other compliance. Stop, think and ask.

3. Value Creation
Create real long-term value by the economic means. Understand, develop, and apply Market Based Management® to get superior results. Eliminate waste.

4. Entrepreneurship
Demonstrate the sense of urgency, discipline, accountability, judgment, initiative, economic and critical thinking skills, and risk-taking mentality necessary to generate the greatest contribution to the company.

5. Customer Focus
Understand and build relationships with customers to profitably anticipate and satisfy their needs.

6. Knowledge
Seek and use the best knowledge in decisions and proactively share your knowledge while embracing a challenge process.

7. Change
Embrace change. Envision what could be, challenge the status quo, and drive creative destruction.

8. Humility
Practice humility and intellectual honesty. Constantly seek to understand and constructively deal with reality to create real value and achieve personal improvement.

9. Respect
Treat others with dignity, respect, honesty, and sensitivity. Encourage and practice teamwork.

10. Fulfillment
Create value and produce results in order to realize your full potential and find true enjoyment in your work.

MDM® Living Values

Koch companies focus on building competitive advantages in the industries in which they operate.

Koch companies create these advantages and capture profitable opportunities in the marketplace through leadership in developing and practicing Market Based Management®. MBM®, implemented in Koch companies worldwide, was developed based on these beliefs:

  • Long-term business success comes only from creating real value for customers and society, not the illusion of value.

  • The world is experiencing an unprecedented (and accelerating) rate of change.

  • To create value amid this change requires a well-founded understanding of what people value and how the world works.

  • Throughout history, the framework that leads to the greatest value creation is one based on economic freedom, individual responsibility and the rule of the law.
A market system based on private property and economic freedom has proven to be the most effective and efficient system for creating prosperity and social progress.
Koch companies try to bring the productive power of the free market into their operations by applying MBM through five dimensions:

  • Vision: Koch companies constantly seek opportunities, in any industry, for which their capabilities will create superior value.

  • Virtue and Talents: Integrity, humility, teamwork, intellectual honesty and the desire to create real value are necessary values for a free society to function properly. Talented people who embody these virtues are an important driver in an organization’s success.

  • Knowledge Processes: A key driver of prosperity is understanding what people value and how to satisfy these values. Thus, Koch companies strive to create a culture and the measures necessary to build the relevant knowledge.

  • Decision Rights: Creating superior value requires that decisions be made by those who have demonstrated the ability to get results. Therefore, authorities are set more by competitive advantage than by hierarchy.

  • Incentives: Koch companies try to reward their people like entrepreneurs, paying them a portion of the long-term value they create.
Source: KochIndustries

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