Current theories of organizational goals are shown to have significant shortcomings. A process theory is utilized to overcome the methodological and empirical difficulties of descriptive theories, and to avoid the roadblock posed by Arrow's Impossibility Theorem and the strained assumptions made by prescriptive theories to counter it. The process theory consists of four propositions (with ten parts) concerning the processes used by chief executive officers of organizations to establish goals, revise goals, and manage conflict over goals. Data gathered from field interviews conducted with four small business firms are consistent with the propositions.
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