Strategic Management and Corporate Governance (SIMA)

Reconcilable differences? On the relation between social and economic goals and the importance of process goals

Valeria Cavotta, Elisa Villani, Johanna Mair

Organizational goals can be defined as aspirations, desired organizational outcomes distinct from measurable targets (Kotlar et al., 2018), and the realized outcome along some measurable indicators is called performance (Greve, 2008). Organizational goals are important in organizations as they can be used to guide action, set employee motivations and assess organizational performance (Ethiraj and Levinthal, 2009; Kotlar et al., 2018). In general, organizations pursue a variety of goals, such as improving productivity, reducing costs, as well as social or family goals (Bateman et al., 2002; Gaba and Greve, 2019; Hirschi et al., 2019; Kotlar and De Massis, 2013; Mazzelli et al., 2018). An important question stemming from goal multiplicity is the relation between them. Although goals can be independent, competing or reinforcing, the small extant literature on goal multiplicity has focused on goal conflict (Hirschi et al., 2019). Goals are understood to be in conflict when the pursuit of one jeopardizes the pursuit of another at any given point of time. As such, literature has investigated how organizations can mitigate goals conflicts, for instance through goals prioritization and sequential attention allocation (Ethiraj and Levinthal, 2009; Gaba and Greve, 2019; Greve, 2008). However, multiple goals can not only be in conflict but might also be interdependent or even in synergy. These latter types of relationship in performance goals have been much less investigated. Moreover, extant literature on goal multiplicity has focused on outcome goals such as profitability, rather than more ongoing process goals such as learning from experience, which might play an essential role in the achievement of multiple outcome goals. Process goals and the relation between them and outcome goals has in fact received scant attention. Process goals such as “listening to costumers”, “learning from experience”, or “communicating with employees” are continuous, ongoing, and tactical ways of operating and doing business (Bateman et al., 2002: 1138). As such, process goals are not only essential to the achievement of outcome goals but, not differently from outcome goals, they can also take large material and attentional resources.

This study aims to fill this gap by investigating the following question: what is the role of process goals to achieve outcome goals and ultimately performance? In asking this question, we set our investigation in the context of social entrepreneurship whereby organizations pursue a variety of economic and social goals that are typically thought of as highly competing (Battilana, 2018).

#organizational goals #outcome goals #process goals #Social enterprises