Main Principle
The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization.
The MBO style is appropriate for knowledge-based enterpriseswhen your staff is competent. It is appropriate in situations where you wish to build employees' management and self-leadership skills and tap their creativity, tacit knowledge and initiative. Management by Objectives (MBO) is also used by chief executives of multinational corporations (MNCs) for their country managers abroad.
Management by Objectives (MBO) systems, objectives are written down for each level of the organization, and individuals are given specific aims and targets. "The principle behind this is to ensure that people know what the organization is trying to achieve, what their part of the organization must do to meet those aims, and how, as individuals, they are expected to help. This presupposes that organization's programs and methods have been fully considered. If they have not, start by constructing team objectives and ask team members to share in the process."
"The one thing an MBO system should provide is focus", says Andy Grove who ardently practiced MBO at Intel. So, have your objectives precise and keep their number small. Most people disobey this rule, try to focus on everything, and end up with no focus at all.
For Management by Objectives (MBO) to be effective, individual managers must understand the specific objectives of their job and how those objectives fit in with the overall company objectives set by the board of directors. "A manager's job should be based on a task to be performed in order to attain the company's objectives... the manager should be directed and controlled by the objectives of performance rather than by his boss.
The managers of the various units or sub-units, or sections of an organization should know not only the objectives of their unit but should also actively participate in setting these objectives and make responsibility for them.
The review mechanism enables leaders to measure the performance of their managers, especially in the key result areas: marketing; innovation; human organization; financial resources; physical resources; productivity; social responsibility; and profit requirements.
However, in recent years opinion has moved away from the idea of placing managers into a formal, rigid system of objectives.
understand the concepts on how to apply these tasks in management and be successful at
Many organizations have developed written statements known as Mission and vision statements, which support employee performance and motivation strengthening the organizations culture and helping reach goals. Some organizations promote high performance restructuring by dedicating the introduction of a team approach to work structuring, and high skill variety and feedback on performance, which results in job characteristics and improved satisfaction. Organizations nowadays are forced to pay extra attention to their employees’ needs and customers’ needs by means of employee recognition, goal alignment and work force engagement. For teams to be engaged and effective, members must feel appreciated, and believe in their leaders (Dixion & Hart, 2010). Organizational culture obtained with Path-goal theory is equivalently important because appropriate culture is required to sustain or facilitate established high performance efforts. With high employee performance and goal alignment organizations use management by objective (MBO) an integrative approach for management that supports the attainment of customer satisfaction through wide variety of tools and procedures that the end result will be higher quality of goods and services achieving business excellence (Evans J
It allows the company to move towards its goals efficiently and effectively. Being specific in the objective sets a clear picture of what is need. Including systems to measure the output and success of the objective allows for future improvement and to ensure thing stay on track. A company always wants to ensure that their objective is achievable. The tasks should be challenging but not create hardship or frustration. Objectives that are realistic take into account the skills, funds and other resources available to completing the task. In the case of Maersk, an example of following a SMART objective was the response by the company to the 2008 recession. Maersk’s HRM team had to set short term objectives to maintain growth while improving its workforce. The implementation of different strategies aided the company in its successful development and hiring of qualified candidates to support the short term
One of the main objectives of an organization is to beat its counter part in our possible way. In order for an organization to insure that they must be good at leading, planning, organizing and controlling their resources and materials to accomplish performance objectives. In other words management. There are four main types of management, Classical, Behavioural, Quantitative and now the Modern Approach to Management. The Modern Approach states that there is no one good way of management. A successful organization utilizes all the types of management. A good example of this is the movie Lean on Me, starring Morgan Freeman as Joe Clark, the protagonist of the movie. Joe is a very talented teacher, who takes a lot of pride in his work, but due to certain events (budget cuts), he has to make some very key decisions upon his future at East Side High, New Jersey. After the resignation of Joe Clark, things go back to worse at East Side High, so after 20 years Joe is once again called upon to take the duty of the principal of this once great school. His goal was to accomplish a 75% average on the state's basic skills test. This goal might be easy at any school, but then again East Side High was not just another school. The previous year the score was 33%. The school was filled with drug dealer, crime, graffiti and other things. Therefore it required a miracle to increase the school's literacy average by approximately 40%.
The set goals should also be those that are favourable to the workers, as well as the management team as a whole. This is to ensure that they can be met easily without much difficulties involved.
It is necessary for these managers to assure that their employees know what is expected of them. They also need to effectively communicate the company goals and strategies in addition to frequently giving feedback to their employees. Managers also need to have the confidence in their employees to allow them autonomy in their work roles.
Once plans have been developed, an organization must address how management will be accomplishing be those plans. This involves operational plans that must flow from strategy; specify resource, time issues, and commitment of human resources. Operational plans at the lower - levels of the organization, have a shorter time horizon, and are narrower in scope (Bateman, Snell 2003 p.113). A good example of this is Wal-Mart's main strategic goal. It is to provide quality merchandise at an affordable low cost to consumers. Its operational goals focus on efficient logistics requiring technology and inventory management systems to help reduce costs so it can be passed on to the customer. Operational plans are derived from a tactical plan and are aimed at achieving one or more operational goals (Bateman, Snell 2003 p.113).
function, managers need to analyse how activities and resources are to be grouped and carry out plans successfully (Bartol 2007). A manager have to understand their ability to manage the lower level employee which is the most valuable of the company as they are the key of output and implement in the planning. Then manager will coordinate the jobs between authority and responsibility that is to define the role position of them (MSG 2012).
«The emphasis (of MBO) is on trying to predict and influence the future rather than on responding and reacting by the seat of the pants. It is also a ‘results-oriented’ philosophy of management, one of which emphasizes accomplishments and results. The focus is generally on change and on improving both individual and organizational effectiveness.»
Life is all about setting goals and trying to achieve them. The same theory also applies in the managerial industry. The accomplishment of desired results in a business is called performance. One of the major concerns of the top managers of a firm is the actual performance of the firm so its measurement is unavoidable.
"In everyday language usage, management refers to the people in organizations who manage, and to the activities they perform." (Fulop, Frith, Hayward 1992 p. 187) To be more specific, management is the process of organizing work activities with and through people to ensure the activities are completed efficiently and effectively (Robbins, Bergman, Stagg, Coulter 2006, p. 9). Through management, the goals of the organization or business are to be achieved. Henri Fayol, one of the most influential contributors to modern concepts of management, proposed that there are five primary functions for management, which consist of planning, organizing, commanding, coordinating and controlling. Nonetheless, the functions of commanding and coordinating have metamorphosed into leading (Crainer 2003).
Management can be simply defined as ¡§getting things accomplished through other people¡¨. Management is then the term describe the work done by the manager, which are planning, organizing, leading and controlling the use of human and other resources, in order to help the organization to achieve a higher organization performance. Planning is to define to goals or targets of the organization and devising action plans to meet organization goals. Organizing is to determine what tasks should be done, arrange jobs to subordinates, controlling the budgeting and divided tasks to individuals or teams. Leading is to motivate staffs to work, maintaining the progress of activities and good relationship and to ensure to work done effective and efficient. Controlling is to measure work performance, assess whether goals have been met, compare the set targets, and make corrections when it is needed
An organisation is a deliberate arrangement of team consisting different personal identities to accomplish some specific goals and managers are the ones who hold the responsibility of mastering and placing them together to strive for that purpose (Robbins, Bergman, Stagg, and Coulter, 2008). Robbins et al. (2008) have stated that managers are people who coordinate and oversee the work activities of others so that the goal is accomplished effectively and efficiently. Managers usually possess qualities such as having strong communication skills, flexibility, imagination, enthusiasm, problem solving skills, and of course the desire to be a great leader (Phdinmanagement.org, 2014). The structure of management conducted by a manager is often influenced by the four functions introduced by Henri Fayol (planning, organising, leading, controlling); how Henry Mintzberg’s management roles play in the organisation and also the three essentials management skills proposed by Robert L. Katz (Robbins et al., 2008).
Although most companies have different strategic goals to achieve; they need to make sure that not only are the goals of the company are followed through, but the performance of each individual employee is recognized. The company also has to ensure their supervisors are willing to push their subordinates to their fullest potential in whatever their career goals may be.
Operations management strategies play an important role in any organization to achieve organizational goals. An organization uses these operations strategies to maintain and control all its operations...