Last updated: April 16, 2019
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Management by objectives

This is a technique that uses mutual goal setting between individuals and their superiors. After the agreement between superior and subordinates on the goals that are supposed to be pursued for coming period, superior must dedicate the authority which is required and the necessary resources in order to carry out his duties in the right manner.  Periodic assessment is necessary to know the progress made and the appraisal needed at the end of period so that new goals for the next period can be set.  When using management by objectives, measurable and realistic goals need to be set for example, goals may be set to increase next year sales by 12% over the last year and expansion is very necessary in order to increase sales. There are goals which may not be qualified, for example, if there is need for personnel officer to improve managerial skills of employees, it may be hard to know the improvement skills to be used. This problem can be solved by knowing the specific skill to be acquired and time period over which the skill will be acquired.

Management by objectives needs careful planning at all organization levels.  The people who commit themselves to accomplish goals should consider how these goals are realistic in right of organizational environment. Managers, superiors and departmental heads should know the assumptions made concerning goals to be met by the departments and ensure consistency of individual goals with departmental goals and goals of other people in the department.  Overall goals in the department should complement with higher level organization goals. (Sink, 1985).

The main principle of management by objective is to enable every person within the organization get an understanding of the objectives and goals and be aware of their responsibilities and roles. Employees should be empowered to implement and achieve their plans which help in achieving the plans of the organization automatically. Management by objectives should be used in enterprises that are knowledge based where the staffs are competent and there is need to build skills in self leadership and creativity.

There are written objectives at each organization level and there are targets and specific aims given to individuals to ensure that people have knowledge of what organization are aiming to achieve and what is to be done to ensure the aims are achieved and the help needed from individuals. This shows that, organization programs should be considered fully and team members should share in constructing the objectives of the team.

In order to ensure that management by objective is effective, specific objectives about the job should be understood by individual managers and ensure that the objectives can fit with company objectives that are set by board of directors. The job of manager should be based on the tasks he performs which are controlled by performance objectives rather than by the boss. Review mechanism helps leaders in measuring performance of managers in key areas such as innovation and productivity and managers are put in system of objectives which requires maximum flexibility.

Operations of management by objectives are compatible with empowerment. When decentralization is followed by telling people what to do and allowing them to do it in their way, people should develop personally because of difference in hierarchy of needs which need to be managed differently for them to perform well and achieve their own potential. In empowerment, there is control and command which remains as rank or power. Individual with particular skills should contribute to success of the company and subordinates rely on superiors to get direction and know performance, standards and results.

Management by objectives helps to link strategic thinking of top management with strategy formulation at lower level. There is passing of responsibility by organization to individual members which is important to organizations that are knowledge based where its members have control over the work assigned to them and give feedback of their results. Self control is very important in achieving objectives and being effective. A worker should be a self manager whose decisions help to obtain valuable results from what is done. Each employee is asked by management what he should be held accountable for, the information he requires and the information that he is to offer to the organization. (Sink, 1985).

Management by objectives controls and directs many projects. It has a proactive management, it is mainly result oriented where it gives emphasis on accomplishment and considers change which helps in improving effectiveness of individual and organization as a whole.  In any project environment, evaluation of individuals is on accomplishment of duties assigned to them in the right manner but not the time spent to finish those duties.

Project manager have personnel which he has not worked with before and this requires him to define the objectives clearly by setting objectives of their own and sub-objectives. Basing on good communication and good working relations, management by objectives helps to ensure time is utilized well where employees report at the time they are supposed to begin their duties and do not leave until the time they are supposed to retire from work and make good use of project resources.

In strategic management, management by objective relies on defining each employee objectives and there after the compare and direct performance on the set objectives. This helps to increase organization performance by aligning goals and objective of all subordinates in the organization. This enables employee to get input in identifying their own objectives and working to meet the deadline set for completion of the task. (Robbins, 1991).

According to drucker, activity track should be avoided by managers where they should not get so much involved in their daily activities thereby forgetting their main purpose and objectives to be met. The concept of management by objective is that, all managers and not just a few top managers should be involved in the process of strategic planning to ensure that the plan is implemented effectively. There should be implementation of a number of performance systems to help organization maintain the right track and therefore management by objective is a predecessor of management that is value based.

Advantages of using management by objectives

There is direct participation of individuals which motivate them to achieve goals that are set by the organization. Once the individuals are motivated, they feel encouraged to put more effort in their duties and focus on accomplishing the goals that are set without failure. Every effort by individual is rewarded either by appreciating and recognizing his contribution or by giving rewards based on performance which encourages individuals as they carry out the duties assigned  to them and doing them at their best because they know at the end their effort in achieving goals will be fruitful. Management by objective is a tool for planning to get project results. It meets individual needs and the needs of project. It is a method used to clarify the contribution individuals and organization units to the project.

Management by objectives ensures that better objectives are set.  When individual who are supposed to attain the goals are allowed to participate in developing those goals, they bring with them realism because they handle activities daily. The objectives will be easy to achieve because they are set by people who are involved in accomplishing them and because they know the means available for achieving the objectives, they will ensure that the objectives that are set are the ones that can be achieved in the right manner.

There is improved potential for self control through setting objectives that are clear and realistic and individual are allowed to control their own performance and they perform their daily duties and measure how useful and successful they are in ensuring that the set goals are effective. Performance appraisal  is  improved because, individual performance is appraised  by measuring achieved results against objectives that are set in order to reduce objectivity in measuring general attitude and cooperativeness towards the work that is performed. (Kotler, 2007).

Shortcomings of management by objectives

The management by objectives approach is criticized due to emphasizing on short term goals. For example, there is little consideration on long term goals in reducing programs for training employees to reduce cost and staff development is hampered in the long run. During initial stages, it consumes a lot of time in implementation when clear objectives are set at all organization levels. It takes five years to have an organized management by objectives system for middle and large sized companies.

There is problem in choosing participants because line managers with little or no responsibility are the effective participants. When the job is programmed, management by objectives fails completely because it has an assumption that, people must cooperate and give their objectives honestly during group discussions and if we consider the real world, interests that are competing in the real world remains reserved in their association. (Palmer, 1998).

In conclusion, enterprise management is significant and complex, the complexity emerges from the need to reconcile objectives that are heterogeneous. It is necessary to manage individual behavior because actions are affected by internal factors and environmental factors.  Characteristics of structure of organization influence selection of model used to manage design of organization. Man makes organizations model but at the same time supports their alteration and enterprise management play essential role in transition process. Management by objective appeared as literature in mid twentieth century but it is not new today. It has several determinants where objective is defined in the beginning and specified. There is clarity and measurability so that the objective can be evaluated. There is participation of structures of management in objective determination and ways of achieving it are established. (Kotler, 2007).



Palmer E. (1998): management by objectives:

Sink D. (1985): productivity management, planning, evaluation and improvement: John Wiley and sons.

Robbins S. (1991): management: Schermerhorn.

Kotler P. (2007): successful knowledge in managing projects: School press.