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Impact Of Management By Objective On Organizational Performance
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CHAPTER ONE
INTRODUCTION
The imperative of attaining
organizational performance objectives constitute a fundamental
phenomenon for the management of modern organization. Therefore
strategic measures are constantly formulated and implemented bottom-line
to achieve key results. Management by objective is one type of
management philosophy adopted to ensure that organizational programme
objectives or results are attainable.
Peter Drucker (19454) defined
management by objective as a dynamic system which seeks to integrate the
company need to clarify and achieve its profit and growth goals with
the managers need to contribute and develop him. Drucker first
publicized these ideas in the practice of management in 1954
subsequently, MBO has been canvassed by other writers notably, McGregor
and Humble. McGreor in the Human side of enterprise supported MBO on the
grounds that it gave subordinate the opportunity to participate in good
setting and performance appraisal and based on a theory Y philosophy.
Humble in Improving Management Performance suggests that MBO focus on
the key results areas where improved performance is likely to have a
dramatic impact on organization performance. However, all writes are
careful to emphasize two points first that MBO is not a management
technique but a philosophy which if accepted requires a shift of
managerial attitudes and perspective; second that MBO needs to be
integrated with other organizational procedure and notably the budgeting
process, performance appraisal, management development and management
reward.
Management by objective (MBO) also known as management by
results (MBR) is a process of defining objectives within an organization
so that management and employees agree to the objectives and understand
what they need to do in the organization in order to achieve them. The
term, management by objective was first popularized by Peter Drucker in
his 1954 book, the practice of management.
The essence of MBO is
participative goal setting, choosing course of actions and decision
making. An important part of MBO is the measurement and the comparison
of the employee actual performance with the standards set. Ideally when
the employees themselves have been involved with the goal setting and
choosing the course of action to be followed by them, they are more
likely to fulfill their responsibilities.
According to George S.
Odiorne, the system of management by objectives can be described as a
process where the superior and subordinate jointly identify its common
goals, define each individuals major areas of responsibility in-terms of
the results expected of him and use these measures as guides for
operating the unit and assessing the contribution of each of its
members.
Objectives can be set in all domain of activities
(production, marketing, services, sales, human resources, finance,
information system etc).
Some objectives are collected for a whole department in the whole company, other can be individualized.
Managers must determine the mission and the strategy goals of the enterprise.
The
goal set by top level managers are based on the analysis of what can
and should be accomplished by the organization within a specific period
of time.
The functions of these managers can be centralized by
appointing a project manager who can monitor and control activities of
the various departments. If this cannot be done or is not desirable each
manager’s contributions to the organizational goal should be clearly
spelled out. Objective need quantifying and monitoring. Reliable
management information systems are needed to establish relevant
objectives and monitor their reach ratio in an objective way. Pay
incentive (bonuses) are often linked to results in reaching the
objectives.
The case study analysis shall aim to determine the impact of MBO on organizational performance of UBA Plc.
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ABSRACT - [ Total Page(s): 1 ]The research progress a detail analysis of the concept of management by objective and portrays its impacts an organization performance. It elucidates the structure of management by objective through the systematic and organized approach that allows management to focus on achievable goals and attain best possible results from available resources. It provides detail analysis of organization performance measures as the overall central focus of management by objective. In-view of analyzing a practic ... Continue reading---