Management By Objectives MBO Commerce Essay

anxiety By Objectives MBO Commerce EssayAccording to George Odiome, MBO is a march whereby superior and subordinate managers of an Organization jointly assign its common inclinations, define each unmarrieds major beas of responsibility in terms of yields judge of him and wont these measures as guides for operating the unit and assessing the contribution of each of its members. anxiety by objective lenss was first popularized by Peter Drucker in 1954 book The Practice of Management. Drucker drafted MBOs as an approach to get the circumspection and employees to jointly dumbfound goals to deliver the goods cognise as objectives. The main purpose for background knowledge objectives was to give both the managers and employees a clear understanding of what they were expected to do in the agreement in enjoin to earn the objectives plenty. The objectives were set during certain time periods which at the populate stage of the period two evaluative execution of instrumen ts be carried reveal to determine the utmost to which the set objectives had been come upond. An suit of an objective includes attaining a sales or get target by the end of a financial year.In the current world of transmission line where gaining competitive over competitors has became integrity of the main goals by geological formation, Management by Objective has become angiotensin converting enzyme of the most wide accepted philosophy of solicitude as stated by Gaurav Akrani 2010. peerless of the factors that has made MBO the most acceptable direction approach is its demanding and rewarding styles of management. MBO besides received recognition when it becomes an integral part of The HP way. Hewlett-Packard incorporated this management technique at entirely take within the comp all managers had to bring objectives and integrate them with those of other mangers and of the comp both as a whole. (The Economist, 2009) This approach tensenessinges vigilance on the reach outment of objectives through involvement of the concerned parties. For example sports stadium building strong team spirit as MBO is mainly base on the assumption that people achieve much when they know what is expected of them and mess relate their personal goals to organizational objectives. Other features of MBO include goodly subordinate participation, joint goal setting, support and encouragement from top level manager to subordinates.MBO is a democratic style of management approach where every subordinate is involved and promote to participate towards achieving organizational objectives. MBO is an approach to be after that aims to overcome barriers that might stop an organization from achieving its objectives. It involves the setting up of goals by managers and their subordinate working together by specifying responsibilities and assigning authority for achieving the goals. The final yard involves constant observe of performance so as to pop continuous improve ment.Features of Management of ObjectivesThe following atomic number 18 the prominent characteristics of MBOAll activities are goal oriented. The first important feature of the MBO is that under it all the activities legislate to be goal-oriented (Dr.R.Singla 2010-11). This means that MBO concentrates on the determination of unit and individual goals in with organizational goals. These goals set state responsibilities of different parts of the organization and dish to coordinate the organization with its parts and its environment.Integration among Organizational, plane sectional and Objectives the basis of the MBO is setting of Objectives jointly by the supervisors and subordinates and their efficient realization (Dr.R.Singla 2010-11)With the MBO approach the objectives are root in the following orderFigure 1Organizational ObjectivesDepartment ObjectivesPersonal ObjectivesThe above figure shows that first of all the objectives of the organization are set. Then the department al objectives are decided which must be in line with the objective of the organization. The third sub step is personal objectives which involves individual objectives be determined first before departmental objectives can be achieved. To sum it up this process is followed to minimize clashes or oppositions at any(prenominal) level regarding the determined objectives.MBO views organization as Dynamic Entity this feature considers the organization as a dynamic entity. This means that every organization is affect by various external and internal factors therefore the organization is considered to be a dynamic unit. The dynamic nature affects the objectives which as a result make it workable that the objectives set today may not be realized. In such an event the organization might be labored act swiftly to change its objectivesMBO is a Participative Attempt the MBO process is characterized by high level of participation of the concerned people in goal setting and performance apprai sal (Kuldeep 2010). Increased participation provides the opportunity to solve decisions and make clear myopic letter relationship with managers and their subordinates.MBO Matches the Objectives and Resources The objectives set when the MBO approach is take by organization are based on the resources available so as to avoid having in execute tasks or activities because of the lack of resources. Dr.R.Singla. (2010-11).MBO is a school of thought and not a Technique MBO is not a technique of management but its a philosophy, because a technique can except be applied or employ in a one department and its effects will only be felt on the circumstance department. For example an inventory technique can only be used in relation to stock control and it cannot be used in another department like HRM.MBO gives more emphasis to Review and execution of instrument Appraisal fixity appraisal of the work performance of employees form one the important characteristics of MBO. This Philosophy helps observe whether all the employees are performing at the expected level and also identify if there is any impediments in their work performance.MBO provides more freedom to Subordinates with MBO Philosophy the subordinates are not only associated with the task of coming up with the objectives but they also get complete freedom in the performance of their work. This philosophy gives them the right to make decisions connect to their designation and as a result this increases their importance which improves their interest and job satisfaction.MBO gives more emphasis to results and not to work with the MBO philosophy more focus is given to results. The subordinates have the freedom to choose which technique to adopt to achieve the final result. This means that the subordinates are expected to give the best possible results regardless of the technique used.Steps in Management by Objectives preparednessPeter Drucker identified fives steps for MBO as sh induce in figure 1http//www. mindtools.com/media/MBO.jpgSource (http//www.mindtools.com)The five steps explainedSet of organizational Objectives this is the first step which involves setting of the organizational objectives. Objective setting begins with the conducting of an internal and external summary to determine the level of might, threats and opportunities.Cascading Objective Down to Employees This countenance stages involves communicating of the set goals and objectives from the top level management to subordinates till they reach everyone. Drucker used the stylishness acronym to make as a tool to make the make MBO objective setting more effective so as to set goals that were come-at-able and to which workers felt accountable toFor example the founder of Microsoft corporation Bill supply adopted a MBO approach to keep every employee informed the well-nigh the companys objectives by following the guidelines belowEliminate politics, by giving everybody the equal message.Keep a flat organization in w hich all issues are discussed openly.Insist on clear and direct communicationPrevent competing Missions or objectivesEliminate rivalry between different parts of the organization endow teams to do their own thingsSource (www.1000advices.com)Encourage Participation in final stage Setting step three aims to get everyone to understand how their personal goals burst in with the objective of the organization. This is done when goals and objectives at all levels are overlap and discussed so as to get everyone understand how things are conducted and then sets their own goals that are in line with the organization objectives.Monitor this stage involves growing actions plans after setting objectives, it is important to establish a proper monitoring remains which keeps track of the progress made towards achieving the set goals, the monitoring dust helps the organization identify deviations or barriers that could slow down the organization from achieving its goals. If any barriers are id entified then the corrective actions are taken to set the organization on the right courseEvaluate and Reward Performance. This last step involves rewarding the desired performance. MBOs main focus is to improve performance at all levels so as to achieve higher efficiency. In order to ensure this happen a good evaluation system has to be put in place to evaluate employees performance and in acidify motivate employees as they strive to achieve the set objectives.Advantages of Management by ObjectivesOver the years since Peter Drucker popularized this philosophy it has become one of the widely adopted by organizations because of the various advantagesOne of the advantages of MBO is that it improves resource and employment management (Rahman 2009). This eliminates to erupt utilization of available of resources and this can be adept to the organization in many ways. One is the increase in efficiency which reduces wastage and improves productivity which as a result would lead to inc reased net income for the organization.The second advantage is that MBO keeps every employee informed. Since all the employees in the organizations are encouraged to participate in setting the objectives, all of them know their responsibilities. This guides employees to work come apart as their responsibilities are clearly outlined and reduce the possibility of them waiver off trackThe third advantage is that MBO improves employees motivation. Involving all employees in decision making make employees feel valued by the organization and cod to this employee commitment is improved. This can good for the organization because a motivated and affiliated workforce will strive to do their best and in turn help the organization achieve its desired results.The forth advantage of MBO is that it facilitates effective control. Due to the continuous monitoring approach employed by MBO this can be useful in guiding the organization to achieve better results. The Monitoring system can be used to by the organization to gauge the performance against the laid down standard and undesired deviations are corrected in time.The fifth advantage of MBO is that it encourages foots. (Drucker, P. (1986). The MBO philosophy puts more focus on the results in order to achieve the objectives rather than procedure to achieve the objectives. This gives subordinates freedom on how, which method to employ in order to achieve the required results. This can be beneficial to the organization as innovation help an organization gain competitive advantage trough naked ideas and products.Disadvantages of Management by ObjectivesHowever as much Management by Objective may be beneficial to organizations there some limitations or disadvantages worth being mentioned.The first disadvantage is that MBO put employees under pressure. MBO being a result focused philosophy pressure is exerted on all the levels of the organization so as to attain the objectives. This might a disobedient thing for the orga nization as pressured employees might be stressed out due to the emphasis put on results within the organization and this could lead to high labour turnover. This could cost the organization a fortune as the organization could be forced to recruit and train new employees.The second disadvantage is that MBO is time consuming. In order for MBO to be successful regular meetings and exchange of reports have to be conducted. This means managers have to speed a lot time in attending and preparing reports for the meetings while they could be rivet in performing important tasks that are over looked. These over looked could urinate a hindrance of in attaining the objectives laid down.The third disadvantage is that MBO puts more importance to picayune term objectives. In order for an organization to achieve it ultimate goals and success the immense term and short term goals should be given equal importance. However the MBO philosophy tends to give more attentions to the short term objecti ves and due to this employees are more concerned by the short term objectives. This creates a situation where they want to be successful at any cost within the shortest time possible and such a situation could be costly to the organization in the long run. culminationManagement by Objectives might be seen as an outdated management philosophy by modern managers today but I confide it still has a place in modern management.If carefully adjust with the culture of the organization MBO can be quite beneficial to the any organization as from this report the advantages out weight the disadvantages. Also For example Intel has been successive due to the use of MBO However as stated by Drucker MBO is just another tool. It is not the great cure for management inefficiency Management by objectives works if you know the objectives 90% of the time you dont. In order for MBO to be successful in Modern management managers and subordinates must closely work together to constantly update their sh ort term and long term objectives from time to time due to the ever change business environment. Also an effective communication structure has to be place to as to allow managers and subordinates to easily set and communicate objectives to all concerned employees.