SATM 6.2.2.2 The Goal Subsystem

The goal subsystem obviously is closely interrelated to other internal subsystems. Choice of goal will have an effect on the technical, human, and managerial subsystems and also upon the best structure to employ. Similarly, each of the other subsystems will affect the nature of the goals pursued and the way they are pursued.

Goals must be chosen that ensure the legitimacy and the viability of the organization within the context of its wider environment. 

In a stable environment it may be possible to set static goals. In a highly uncertain and turbulent environment, goals will have to be more flexible and multiple, satisfying a variety of constrains.

The organizational structure employed will have to reflect the need for flexible goals if the environment is uncertain. Fuller discussion of goals from the organizations-as-systems perspective can be found in Thompson and McEwan (1958, Organizational goals and environment: goal-setting as an interaction process, in: People and Organizations, G. Salaman and K. Thompson, Longman, London, pp. 155-167.), Etzioni (1960, Two approaches to organizational analysis, ASQ 5:257), and Perrow (1961, The analysis of goals in complex organizations, ASR, 26:854). 

Perhaps the most influential contribution, however, has been that by Chandler (1962, Strategy and Structure: Chapters in the History of the American Industrial Enterprise, MIT Press, Cambridge, MA.) who was able to demonstrate historically the necessity of a fit between strategy and structure. Donaldson (1996, The normal science of structural contingency theory, in: Handbook of Organizational Studies, S.R. Clegg, C. Hardy and W.R. Nord, eds., Sage, London, pp.57-75) sums up his argument as follows:

Corporations need to maintain a fit between their strategy and their structure otherwise they suffer lower performance. Specifically, a functional structure fits an undiversified strategy, but is a misfit for a diversified strategy where a multidivisional structure is required for effective management of the complexity of several distinct product markets.

(Jackson, 2000. Systems Approached to Management.Kluwer Academic / Plenum Publishers. pp111~112)