EFFECT OF AN APPLICATION OF MANAGEMENT BY OBJECTIVE PRINCIPLES IN ORGANISATION
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EFFECT OF AN APPLICATION OF MANAGEMENT BY OBJECTIVE PRINCIPLES IN ORGANISATION
Chapter one
GENERAL INTRODUCTIONS
1.0 Introduction
Management by objectives (MBO) extends beyond creating annual targets for organisational units to establishing performance goals for individual personnel. Peter Drucker first proposed the approach in his 1954 book “the Practice of Management” Since then, it has sparked numerous conversations, reviews, and research, inspiring many similar programmes.
According to Odione (1965), management by objective is considered in a broader perspective than just an appraisal technique.
It sees appraised as merely one component of a larger system of goal-oriented management. Sub-objectives are required to support objective states and/or results, as well as overall objectives. Thus, objectives create both a hierarchy and a network.
Furthermore, organisations and managers have different aims that are often incompatible, which can lead to disputes within the organisation, group, and even individual levels.
A manager may have to choose between short-term and long-term performance, and personnel interests may need to be subordinated to organisational goals (Hoontz, 1993:143).
Refers to a formal set of procedures that begins with goal setting and progresses through performance evaluations. Managers and those they supervise collaborate to develop common goals. Each person’s actions of responsibility are specified in terms of measurable expected results or “objectives,”
which are used by staff numbers to plan their work and by both staff members and their managers to monitor progress (Stoner et al, 1996:300). Performance appraisals are undertaken collectively on a continuous basis, with regular periodic reviews.
According to Freedom et al. (1996:300), the heart of MBO is the objectives, which specify the specific actions required to achieve the unit’s functional strategy and annual aim. Provides a method for integrating and focusing the activities of all organisation members on the aims of higher management and overall organisational strategy.
Another important aspect of management by objectives (MBO) is its emphasis on the active participation of managers and employees at all levels of the organisation.
Druckers (1954:63) advocated that managers and staff members define their own goals or, at the very least, be actively involved in the goal-setting process; otherwise, people may refuse to implement “someone else” goals.
Drucker also proposed that managers at all levels assist in setting goals for those above them, in the assumption that this will provide them with a better knowledge of the company’s overall strategy and how their own specialised goals relate to the big picture.
Management by objective is now practiced around the world, however despite its many uses, it is not always apparent what is meant by management by objective (MBO).
Some still regard it as an appraisal tool, while others see it as a motivating method; still others regard management by objectives (MBO) as a planning and control tool.
In other words, definitions are important to heighten the evolution concepts first; however, management by objective (MBO) should be defined as a comprehensive management system that integrated many managerial activities in a systematic manner and that is consciously directed towards the effective and efficient achievement of organisational and individual objectives (Welhrich, 1993:149).
These perspectives on management by objectives as a system of management are not shared by all; some continue to define management by objectives in a very restricted and constrained fashion.
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