According to my research on different business strategies, I can say that based on the information provided within the question the term being described is called a Management by Objectives (MBO). Like mentioned in the question this is a model whose main focus is to improve the performance of an organization by clearly defining objectives in which everyone in the organization agrees upon.
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MBO is a systematic and organized approach that aims to increase organizational performance by aligning the subordinate objectives throughout the organization with the overall goals set by management.
As the term implies, an irresistible impulse is a defense by excuse (in this case by insanity) in which the defendand shouldn't be held responsible for their actions given that they could not control them.