||It’s not a new idea about management by objectives. In fact, it was originally proposed by Peter Drucker 50 years ago as a means of using goals to motivate people rather than to control them. Management by objectives emphasizes participatively set goals that are tangible, verifiable, and measurable.|
MBO operationalizes the concept of objectives by devising a process by which objectives cascade down through the organization. The organization’s overall objectives are translated into specific objectives for each succeeding level, that like as divisional, departmental, individual in the organization. But because lower-unit managers jointly participate in setting their own goals, MBO works from the “bottom up” as well as from the “top down.” The result is a hierarchy that links objectives at one level to those at the next level. And for the individual employee, MBO provides specific personal performance objectives.
There are four ingredients common to MBO programs. These are goal specificity, participative decision making, an explicit time period, and performance feedback.
There are many cases in which MBO that failed to meet expectations of management. A close look at these failed cases, however, indicates that the problems rarely lie with MBO’s basic components. Rather, the culprits tend to be factors such as unrealistic expectations regarding results, lack of commitment by top management, and an inability or unwillingness by management to allocate rewards based on goal accomplishment.
Management by objectives (MBO) is now practiced around the world. Yet, despite its wide application, it is not always clear what is meant by MBO. Some still think of is as an appraisal tool; others see it as a motivational technique; still others consider MBO a planning and control device.
Some of its weaknesses are that managers sometimes fail to explain the philosophy of MBO to subordinates or give them guidelines for their goal setting. In addition, goals themselves are difficult to set, tend to be short-term, and may become inflexible despite changes in the environment. People, in their search for verifiability, may overemphasize quantifiable goals.
Managers at different levels in the organizational hierarchy are concerned with different kinds of objectives. The board of directors and top-level managers are very much involved in determining the purpose, the mission, and the overall objectives of the firm. Middle-level managers are involved in the setting of key-result-area objectives, division objectives, and departmental objectives. The primary concern of lower-level managers is setting the objectives of departments and units as well as of their subordinates. So the goals and objections of top-level and middle-level managers will be concern MBO very much.
The case of enterprises is a chemical technology company. They have well performance and profit at past time. But control their performance by budget, cost and profit. Due to they happened a fire accident in 1991,that made them a larger damage. Therefore, change the performance system from cost and profit to MBO.
The first issue is how to process the MBO system into an enterprise that control their performance by budget and had good profit still.
The second issue is if process MBO into an enterprise if start from top and middle manager, that is right or not and will be assistant with process MBO in future.
Any change in organization will be influent for all departures. How to make the change smoothly and accept by all colleagues that is another issue.
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