Goal congruence

Definition

Goal congruence is the alignment of individual or departmental goals with the overall objectives of an organization. It ensures that all parts of the organization are working towards common strategic aims.

5 Must Know Facts For Your Next Test

1. Goal congruence helps in harmonizing individual incentives with organizational performance.
2. Achieving goal congruence can reduce conflicts and enhance cooperation among departments.
3. It is crucial for effective performance measurement and evaluation in decentralized organizations.
4. Balanced scorecards are often used to facilitate goal congruence by linking performance metrics to strategic goals.
5. Lack of goal congruence can lead to suboptimal decision-making and inefficiency in resource allocation.

Review Questions

• Why is goal congruence important for decentralized organizations?
• How does a balanced scorecard help achieve goal congruence?
• What are potential consequences of a lack of goal congruence within an organization?

Related terms

Decentralization:

The distribution of decision-making authority throughout different levels within an organization.

Balanced Scorecard:

A strategic planning and management system that uses various performance metrics to align business activities with organizational strategy.

Responsibility Center:

A segment or unit within an organization for which a manager is held accountable for certain financial and operational outcomes.