Goal setting, evaluation, learning and revision: A dynamic modeling approach

Learning in organizations (or individuals) interacts in important ways with organizational goal dynamics. Most organizations seek specific explicit or implicit goals. In the simplest computer-simulation models of goal-seeking in organizations, there is a constant goal and the model captures the dynamic difficulties involved in reaching that given goal. In more sophisticated models, the goal itself is variable. The goal can erode as a result of various phenomena such as frustration due to persistent failure; it can evolve further as a result of confidence caused by success; or, it can be evaluated and adjusted periodically as a result of some formal process. Goal evaluation and goal setting are important elements of the continuous learning cycle in organizations. With respect to goal dynamics, there are models of limited and linear goal erosion dynamics. We extend existing models by including organizational capacity limitations on performance improvement rates and non-linear interactions in goal erosion. Our model offers a general theory of goal formation in individuals as well as organizations, including potential goal erosion, caused by persistent poor performance, as well as positive goal evolution dynamics, as a result of consistent success. The model supports the notion that successful strategies involve learning about goal-performance interactions.