---
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title: "The Science of Success: How Market-Based Management Built the World's Largest Private Company"
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# The Science of Success: How Market-Based Management Built the World's Largest Private Company

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The Science of Success: How Market-Based Management Built the World's Largest Private Company [Koch, Charles G.] on desertcart.com. *FREE* shipping on qualifying offers. The Science of Success: How Market-Based Management Built the World's Largest Private Company

Review: The Truth about Capitalism - From whom could it be better to learn the Science of Success in business than one of the most successful business owners in the United States today. Charles Koch has built a tremendous operation through an understanding of economics, the free enterprise system and, mainly, by consistently providing value in the marketplace. Being rewarded for adding value to peoples' lives is essentially what Capitalism is all about. This is simply a terrific book by a man who has studied the principles of human behavior and action and realized great results through tapping into those principles. The central premise of the book is that "Capitalism Works" both for general society and for an individual business. In fact, when one actually studies capitalism one realizes that it is not only the most profitable and beneficial economic system there is but, by far, the most charitable one, as well (another recommended read: "The Capitalist Manifesto" by Andrew Bernstein). The more truly capitalistic (free) a society is the longer life span of its citizens, the higher the standard of living, and the better off are even its poor. Yes, Capitalism helps all. And, charity flourishes in a free-enterprise based society, as well. Side point: Capitalism (or free-enterprise), an economic system where people are allowed to freely buy, sell or trade in such a way as to best serve their own perceived wants and needs (with government involved only to protect against force and fraud), needs to be understood for what it is. Unfortunately, today's society all-too-often equates Capitalism with companies such as Enron. Enron, of course, was not Capitalism in action; it was theft in action. On the other hand, Mrs. Fields' Cookies is an excellent example of Capitalism. Capitalism is personified by Adam Smith's example about the baker and the brewer providing the best product and service possible knowing that doing so will benefit them while at the same time benefiting their customers. This must be taught and re-taught on a consistent basis in order for the mainstream in our society to be open to the benefits of Capitalism instead of the resistance it now receives. According to Mr. Koch's teaching, the same basic principles of human behavior, action and motivation that serves general society also serve a business, its customers and the economy, as well. It's so obvious that he is correct. He's to be congratulated for pointing this out. Market-Based Management is a system Mr. Koch developed for taking those same principles that work so well in general society and applying them to one's business. He is humble enough to point out the challenges of this system and how it is very easy to veer off the path. All-in-all, however, the proof is in the pudding; the accomplishments of this man, using his system, speak for themselves. He has grown his business 2,000-fold in the last 20 years, having 80,000 employees in 60 countries with $90 billion in revenues. And his company was called by Forbes "The world's largest private company." In a truly free-enterprise based economy, the amount of money one makes is directly proportional to the number of people they serve. Mr. Koch has served a lot of people.
Review: Worth it for the HR section alone - A fair amount of this book presents an interesting, well-written personal account of how Koch Industries applies management principles that a lot of other good management books talk about: clear sense of mission, high ethical standards, and the like. At Koch, these are codified as "Market-Based Management." The book really shines, I think, in its discussion of Human Resources. Koch industries does three things that I think are interesting: 1) When a new person enters a team, the firm redesigns the roles for every member of that team so that the new person fits in best. 2) Koch Industries pays close attention to Howard Gardner's theory of multiple intelligences in designing roles and picking people. (This is the idea that there are eight different but complimentary types of intelligence, six of them important in Koch's business, and that nearly everyone is above average in at least one of them.) 3) It use a version of Jack Welch's famous "rank and yank" system that grades everyone A-C. Although nearly every employer at least does one of these things, I don't know of any other company that does all three. The first two are touchy-feely supportive. The last one, in many cases, brutal to the "C performers" targeted. Firing some "Cs" was one of the worst management tasks I've ever taken on myself. As Koch explains, however, they're all mutually reinforcing ways of making sure that all employees have the ability to do their jobs well, do things they're good at, and have co-workers who can support their efforts. I would tend to believe that this, more than anything else, leads to Koch Industries' apperent success in replicating the market's vibrancy within the firm. More market-based economies do better, I've always believed, because they do a better job letting people realize their potential. Sometimes this involves pain when a person ends up in a job that they can't do. A lot of the time, it's wonderful.

## Technical Specifications

| Specification | Value |
|---------------|-------|
| Best Sellers Rank | #157,072 in Books ( See Top 100 in Books ) #54 in Management Science #143 in Business Decision Making #282 in Decision-Making & Problem Solving |
| Customer Reviews | 4.4 out of 5 stars 321 Reviews |

## Images

![The Science of Success: How Market-Based Management Built the World's Largest Private Company - Image 1](https://m.media-amazon.com/images/I/81jPvv7Yw7L.jpg)

## Customer Reviews

### ⭐⭐⭐⭐⭐ The Truth about Capitalism
*by B***G on July 12, 2007*

From whom could it be better to learn the Science of Success in business than one of the most successful business owners in the United States today. Charles Koch has built a tremendous operation through an understanding of economics, the free enterprise system and, mainly, by consistently providing value in the marketplace. Being rewarded for adding value to peoples' lives is essentially what Capitalism is all about. This is simply a terrific book by a man who has studied the principles of human behavior and action and realized great results through tapping into those principles. The central premise of the book is that "Capitalism Works" both for general society and for an individual business. In fact, when one actually studies capitalism one realizes that it is not only the most profitable and beneficial economic system there is but, by far, the most charitable one, as well (another recommended read: "The Capitalist Manifesto" by Andrew Bernstein). The more truly capitalistic (free) a society is the longer life span of its citizens, the higher the standard of living, and the better off are even its poor. Yes, Capitalism helps all. And, charity flourishes in a free-enterprise based society, as well. Side point: Capitalism (or free-enterprise), an economic system where people are allowed to freely buy, sell or trade in such a way as to best serve their own perceived wants and needs (with government involved only to protect against force and fraud), needs to be understood for what it is. Unfortunately, today's society all-too-often equates Capitalism with companies such as Enron. Enron, of course, was not Capitalism in action; it was theft in action. On the other hand, Mrs. Fields' Cookies is an excellent example of Capitalism. Capitalism is personified by Adam Smith's example about the baker and the brewer providing the best product and service possible knowing that doing so will benefit them while at the same time benefiting their customers. This must be taught and re-taught on a consistent basis in order for the mainstream in our society to be open to the benefits of Capitalism instead of the resistance it now receives. According to Mr. Koch's teaching, the same basic principles of human behavior, action and motivation that serves general society also serve a business, its customers and the economy, as well. It's so obvious that he is correct. He's to be congratulated for pointing this out. Market-Based Management is a system Mr. Koch developed for taking those same principles that work so well in general society and applying them to one's business. He is humble enough to point out the challenges of this system and how it is very easy to veer off the path. All-in-all, however, the proof is in the pudding; the accomplishments of this man, using his system, speak for themselves. He has grown his business 2,000-fold in the last 20 years, having 80,000 employees in 60 countries with $90 billion in revenues. And his company was called by Forbes "The world's largest private company." In a truly free-enterprise based economy, the amount of money one makes is directly proportional to the number of people they serve. Mr. Koch has served a lot of people.

### ⭐⭐⭐⭐⭐ Worth it for the HR section alone
*by D***E on April 13, 2007*

A fair amount of this book presents an interesting, well-written personal account of how Koch Industries applies management principles that a lot of other good management books talk about: clear sense of mission, high ethical standards, and the like. At Koch, these are codified as "Market-Based Management." The book really shines, I think, in its discussion of Human Resources. Koch industries does three things that I think are interesting: 1) When a new person enters a team, the firm redesigns the roles for every member of that team so that the new person fits in best. 2) Koch Industries pays close attention to Howard Gardner's theory of multiple intelligences in designing roles and picking people. (This is the idea that there are eight different but complimentary types of intelligence, six of them important in Koch's business, and that nearly everyone is above average in at least one of them.) 3) It use a version of Jack Welch's famous "rank and yank" system that grades everyone A-C. Although nearly every employer at least does one of these things, I don't know of any other company that does all three. The first two are touchy-feely supportive. The last one, in many cases, brutal to the "C performers" targeted. Firing some "Cs" was one of the worst management tasks I've ever taken on myself. As Koch explains, however, they're all mutually reinforcing ways of making sure that all employees have the ability to do their jobs well, do things they're good at, and have co-workers who can support their efforts. I would tend to believe that this, more than anything else, leads to Koch Industries' apperent success in replicating the market's vibrancy within the firm. More market-based economies do better, I've always believed, because they do a better job letting people realize their potential. Sometimes this involves pain when a person ends up in a job that they can't do. A lot of the time, it's wonderful.

### ⭐⭐⭐⭐ Enjoyable and Intriging
*by A***M on June 16, 2007*

While I don't think all the quotes credited to members of the Koch family were actually given birth by them, this is an interesting, albeit self-serving book. Having said that, most anyone who writes about his own business is going to be self-serving. So one can't be condemned for that. If you're interested in bringing success into your organization, you need to read this book. It gives you a unique look at a truly successful business and the basic philosophy that is alleged to have created and maintained it. I had a bit of a problem with the author when he expressed his belief of doing business on a handshake. In today's world that's not something I would want to try. I'm a firm believer in a good contract to prevent most of the problems that can come up in even the best relationships. But one doesn't have to agree with everything he reads as no one person is necessarily right. Nor is one way of doing business a good fit for everyone. Koch Industries is indeed a highly respected company. The family is reputed to have fought a good deal over control and money yet the book makes the family sound very close. But, again, the author wants to put the best light on things and perhaps as we get older we only want to recall the good. Nonetheless, this is a good read. It's short. It won't take long to read and you probably will dig out a gem or two that you can use and capitalize on. The Koch family (at least the author) is a free market thinker and holds to libertarian beliefs. As a free market thinker and libertarian myself, I understand and appreciate this style of capitalism. You'll find that in this book. And that's a good thing.

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*Last updated: 2026-01-31*