Essentials of Planning and Managing by Objectives

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Adapted from Heinz Weihrich, Management Excellence: Productivity through MBO (New York: McGraw-Hill, 1985), p. 18.• improvement of managing through results-oriented planning• Clarification of organizational roles and structures as well as delegation of authorityaccording to the results expected of the people occupying the roles• Encouragement of commitment to personal and organizational goals• Development of effective controls that measure results and lead to corrective actions
Failures of management by objectives and some recommendationsDespite all its advantages, an MBO system has a number of weaknesses. Most aredue to shortcomings in applying the MBO concepts. Failure to teach thephilosophy of MBO is one of the weaknesses of certain programs. Managers mustexplain to subordinates what it is, how it works, why it is being done, what part itwill play in appraising performance, and, above all, how participants can benefit.The philosophy is built on the concepts of self-control and self-direction.Failure to give guidelines to goal setters is often another problem. Managersmust know what the corporate goals are and how their own activities fit in withthem. Managers also need planning premises and a knowledge of major companypolicies.There is also the difficulty of setting verifiable goals with the right degree offlexibility. Participants in MBO programs report at times that the excessiveconcern with economic results puts pressure on individuals that may encouragequestionable behavior. To reduce the probability of resorting to unethicalmeans to achieve results, top management must agree to reasonable objectives,clearly state behavioral expectations, and give high priority to ethical behavior,rewarding it as well as punishing unethical activities.In addition, emphasis on short-run goals can be done at the expense of thelonger-range health of the organization. Moreover, the danger of inflexibilitycan make managers hesitate to change objectives, even if a changed environmentwould require such adjustments.Other dangers include the overuse of quantitative goals and the attempt to usenumbers in areas where they are not applicable, or they may downgradeimportant goals that are difficult to state in terms of end results. For example, afavorable company image may be the key strength of an enterprise, yet statingthis in quantitative terms is difficult. There is also the danger of forgetting thatmanaging involves more than goal setting.But even with the difficulties and dangers of managing by objectives in certainsituations, this system emphasizes in practice the setting of goals long known tobe an essential part of planning and managing.
Page 1 and 2: Essentials of Planning and Managing
Page 3 and 4: .Types of PlansPlans can be classif
Page 5 and 6: the same situation every time it co
Page 7 and 8: ProgramsPrograms are a complex of g
Page 9 and 10: 2. Establishing ObjectivesThe secon
Page 11 and 12: 8. Quantifying Plans by BudgetingAf
Page 13 and 14: Hierarchy of objectivesAs Figure 4-
Page 15 and 16: Examples of objectives for key resu
Page 17 and 18: Multiplicity of objectivesObjective
Page 19: 113evolving Concepts in Management
Page 23 and 24: KEY IDEAS AND CONCEPTSFOR REVIEWPla

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