Setting Standards
Cyert and March (1963) use an aspiration level perspective and argue that
organizational goals are a function of previous goals, experience with these
previous goals, and other organization's experience with these previous
goals. Thompson (1967) measures standard setting as whether the standards
of desirability are clearly formulated, and whether the beliefs about cause-effect
relationships are relatively complete or incomplete (in Scott p. 352). He
argues that when standards are clear and cause-effect relations are known,
efficiency tests are appropriate. If standards are clear but cause-effect
relationships are not known, then instrumental tests (that determine whether
the endpoint was achieved) are appropriate. When standards of desirability
are are ambiguous, organizations must resort to social tests (which are
validated by consensus or authority). These social tests may include external
awards, endorsements, prestige, etc.