Essentials of Planning and Managing by Objectives

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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.
KEY IDEAS AND CONCEPTSFOR REVIEWPlanningMission or purposeObjective or goalStrategyPolicyProcedureRuleEvolving concepts in management byobjectives (MBO) Systemsapproach to MBOProgramBudgetPlanning stepsHierarchy of objectives •Key result areasQuantitative and qualitativeobjectivesVerifiabilityBenefits of MBO Weaknesses ofMBO Recommendations forimproving MBO
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 and 20: 113evolving Concepts in Management
Page 21: Failures of management by objective

Essentials of Planning and Managing by Objectives

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