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    Goal Congruence

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    Cheese Butter
    Goal congruence refers to the situation where the goals of different interest groups coincide. It can be achieved by aligning corporate goals with the goals of interest groups so they share a common framework. Managers' remuneration packages can also motivate goal congruence between managers and shareholders. Factors influencing goal congruence include external factors like work ethics and industry type, as well as internal factors such as culture and management styles. Providing managers incentives tied to profits, share price, or shares in the company can further achieve goal congruence.

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    Goal Congruence

    Uploaded by

    Cheese Butter
    29 views2 pages
    Goal congruence refers to the situation where the goals of different interest groups coincide. It can be achieved by aligning corporate goals with the goals of interest groups so they share a common framework. Managers' remuneration packages can also motivate goal congruence between managers and shareholders. Factors influencing goal congruence include external factors like work ethics and industry type, as well as internal factors such as culture and management styles. Providing managers incentives tied to profits, share price, or shares in the company can further achieve goal congruence.

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    MAS 4

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    Goal congruence refers to the situation where the goals of different interest groups coincide. It can be achieved by aligning corporate goals with the goals of interest groups so they share a common framework. Managers' remuneration packages can also motivate goal congruence between managers and shareholders. Factors influencing goal congruence include external factors like work ethics and industry type, as well as internal factors such as culture and management styles. Providing managers incentives tied to profits, share price, or shares in the company can further achieve goal congruence.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    29 views2 pages

    Goal Congruence

    Uploaded by

    Cheese Butter
    Goal congruence refers to the situation where the goals of different interest groups coincide. It can be achieved by aligning corporate goals with the goals of interest groups so they share a common framework. Managers' remuneration packages can also motivate goal congruence between managers and shareholders. Factors influencing goal congruence include external factors like work ethics and industry type, as well as internal factors such as culture and management styles. Providing managers incentives tied to profits, share price, or shares in the company can further achieve goal congruence.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    The Concept of Goal Congruence and How It Can Be Achieved

    Goal Congruence is the term which describes the situation when the goals of different
    interest groups coincide.
    A way of helping to achieve goal congruence between shareholders and managers is by
    the introduction of carefully designed remuneration packages for managers which would
    motivate managers to take decisions which were consistent with the objectives of the
    shareholders.
    Corporate goals must be in alignment with the goals of the different interest groups so
    they could have a common framework which can serve as a basis in monitoring the attainment
    of the goals established.
    Interest groups need to fit their intent with the corporate vision and long-term strategy.

    Factors that Influence Goal Congruence


    External Factors

     Work Ethics
     Attitudes
     Loyalty
     Pride in doing job
     Diligence
     Type of industry

    Internal Factors

     Culture
     Management styles
     Informal Organization
     Perception and communication
    Achieving Goal Congruence
    Goal congruence can be achieved by focusing on the corporate vision and the intent of
    the different interest groups.
    Goal congruence can be achieved, and at the same time, the ‘agency problem’ can be
    dealt with, providing managers with incentives which are related to profits or share price, or
    other factors such as:

     Pay or bonuses related to the size of profits termed as profit-related pay.


     Rewarding managers with shares, e.g.: when a private company ‘goes public’ and
    managers are invited to subscribe for shares in the company at an attractive offer price.

    QUESTIONS

    1. The term which describes the situation when the goals of different interest groups
    coincide. (Ans. Goal Congruence)
    2. Interest groups need to fit their intent with the corporate vision and long-term strategy.
    (TRUE)
    3. Goal congruence can be achieved by focusing on the corporate vision and the intent of
    the one interest groups. (FALSE)
    4-5. What are the factors that influence goal congruence. (Ans. External Factor and Internal
    Factor)

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