Koch companies focus on building competitive advantages in the industries in which they operate.

Koch companies create these advantages and capture profitable opportunities in the marketplace through leadership in developing and practicing the Market Based Management® business philosophy. This philosophy, implemented in Koch companies worldwide, was developed based on these beliefs:

• Long-term business success comes only from creating real value for customers and society, not the illusion of value.
  
  
• The world is experiencing an unprecedented (and accelerating) rate of change.
  
  
• To create value amid this change requires a well-founded understanding of what people value and how the world works.
  
  
• Throughout history, the framework that leads to the greatest value creation is one based on economic freedom, individual responsibility and the rule of law.
  
  
• A market system based on private property and economic freedom has proven to be the most effective and efficient system for creating prosperity and social progress.
  
  

Koch companies try to bring the productive power of the free market into their operations by applying the MBM® business philosophy through five dimensions:

Vision: Koch companies constantly seek opportunities, in any industry, for which their capabilities will create superior value.

Virtue and Talents: Integrity, humility, teamwork, intellectual honesty and the desire to create real value are necessary for a free society to function properly. Talented people who embody these virtues are an important driver in an organization’s success.

Knowledge Processes: A key driver of prosperity is understanding what people value and how to satisfy those values. Thus, Koch companies strive to create a culture and the measures necessary to build the relevant knowledge.

Decision Rights: Creating superior value requires that decisions be made by those who have demonstrated the ability to get results. Therefore, authorities are set more by comparative advantage than by hierarchy.

Incentives: Koch companies try to reward their people like entrepreneurs, paying them a portion of the long-term value they create.