Essentials of Planning and Managing by Objectives

SummaryPlanning involves selecting the missions and objectives as well as the actions toachieve them. It requires decision making, which means choosing a futurecourse of action from among alternatives. Planning and controlling are closelyinterrelated, although they are discussed separately in this book There are manytypes of plans, such as missions or purposes, objectives or goals, strategies, policies,procedures, rules, programs, and budgets. Once an opportunity is recognized, amanager plans rationally by establishing objectives, making assumptions (premises)about the present and future environment, finding and evaluating alternative courses ofaction, and choosing a course to follow. Next, the manager must make supportingplans and devise a budget. These activities must be carried out with attention to thetotal environment. Short-range plans must of course be coordinated with long-rangeplans.Objectives are the end points toward which activities are aimed. Objectives areverifiable if it is possible, at the end of the period, to determine whether they havebeen accomplished. Objectives form a hierarchy, starting from corporate missions orpurposes going down to individual goals. Managers can best determine the numberof objectives they should realistically set for themselves by analyzing the nature ofthe job and how much they can do themselves and how much they can delegate. Inany case, managers should know the relative importance of each of their goals.Management by objectives (MBO) has been widely used for performanceappraisal and employee motivation, but it is really a system of managing. Among itsbenefits, MBO results in better managing, often forces managers to clarify thestructure of their organizations, encourages people to commit themselves to theirgoals, and helps develop effective controls.Some of its weaknesses are that managers sometimes fail to explain thephilosophy of MBO (which emphasizes self-control and self-direction) tosubordinates or give them guidelines for their goal setting. In addition, goalsthemselves are difficult to set, tend to be short-term, and may become inflexibledespite changes in the environment. People, in their search for verifiability, mayoveremphasize quantifiable goals.