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.