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On Establishing Legitimate Goals and Their Performance Impact

  • George A. ShinkleEmail author
  • Mirjam Goudsmit
  • Chris J. Jackson
  • Feifei YangEmail author
  • Brian T. McCann
Original Paper
  • 291 Downloads

Abstract

We investigate the role of legitimacy in setting organizational goals as a way to address the potential “dark,” unethical side of organizational goal setting. Coupling qualitative and quantitative research methods to better understand legitimacy in goal setting, we first induce novel hypotheses based on observed practice and then provide survey evidence to test the performance implications. Study 1 reports findings based on interviews with twenty-two company executives. We identify attention to goal credibility, prioritization of stakeholders directly involved in the goal’s attainment when setting goals, and communication openness regarding goals, as well as their combination, as being important to organizational performance outcomes. Study 2 determines whether these three practices and their interaction predict performance using a survey conducted with 522 companies across four countries. Among other findings, we contribute to the organizational goal setting literature by showing that higher organizational performance is associated with the amount of priority given to the key actors (typically employees) directly involved with the goal’s attainment. We also find a positive interaction between attention to goal credibility, key actor (employee) importance, and communication openness on financial performance and non-financial goal attainment. Our work takes an initial step toward understanding how organizations can better shape the legitimacy of organizational goals for improved organizational performance and reduced unethical behavior.

Keywords

Organizational goal setting Goal targets Legitimacy Ethics in goal setting 

Notes

Acknowledgements

We thank Editor R. Edward Freeman and two anonymous reviewers for their helpful comments and guidance.

Funding

The first-named author’s contribution to this work was funded through the support of the Australian Research Council (Award DE130100840).

Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflict of interest.

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

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Copyright information

© Springer Science+Business Media B.V. 2017

Authors and Affiliations

  1. 1.UNSW Business SchoolUNSW – SydneySydneyAustralia
  2. 2.Asia Europe Business School, Faculty of Economics and ManagementEast China Normal UniversityShanghaiChina
  3. 3.Owen Graduate School of ManagementVanderbilt UniversityNashvilleUSA

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