WHAT IS MANAGEMENT BY OBJECTIVE (MBO)

WHAT IS MANAGEMENT BY OBJECTIVE (MBO)

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

It was first outlined by Peter Drucker in 1954 in his book ‘The Practice of Management’. In the 90s, Peter Drucker himself decreased the significance of this organization management method, when he said: “It’s just another tool. It is not the great cure for management inefficiency… Management by Objectives works if you know the objectives, 90% of the time you don’t.”

CORE CONCEPTS OF MBO

According to Drucker managers should “avoid the activity trap”, getting so involved in their day to day activities that they forget their main purpose or objective. Instead of just a few top-managers, all managers should:

• participate in the strategic planning process, in order to improve the implementability of the plan, and
• Implement a range of performance systems, designed to help the organization stay on the right track.

MANAGERIAL FOCUS

MBO managers focus on the result, not the activity. They delegate tasks by “negotiating a contract of goals” with their subordinates without dictating a detailed roadmap for implementation. Management by Objectives (MBO) is about setting yourself objectives and then breaking these down into more specific goals or key results.

Main Principle of MBO

• The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization.

WHERE TO USE MBO

• The MBO style is appropriate for knowledge-based enterprises when your staff is competent. It is appropriate in situations where you wish to build employees’ management and self-leadership skills and tap their creativity, tacit knowledge and initiative. Management by Objectives (MBO) is also used by chief executives of multinational corporations (MNCs) for their country managers abroad.

INDIVIDUAL RESPONSIBILITY

Management by Objectives (MBO) creates a link between top management’s strategic thinking and the strategy’s implementation lower down. Responsibility for objectives is passed from the organization to its individual members. It is especially important for knowledge-based organizations where all members have to be able to control their own work by feeding back from their results to their objectives.

Management by objectives is achieved through self-control, the tool of effectiveness. Today the worker is a self-manager, whose decisions are of decisive importance for results.

In such an organization, management has to ask each employee three questions:

• What should we hold you accountable for?
• What information do you need?
• What information do you owe the rest of us?

MBO STRATEGY: THREE BASIC PARTS

All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers.

Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives.

Rewards are given to individuals on the basis of how close they come to reaching their goals.

MBO ADVANTAGES & DISADVANTAGES

Advantages

• MBO programs continually emphasize what should be done in an organization to achieve organizational goals.
• MBO process secures employee commitment to attaining organizational goals.

Disadvantages

• The development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work.
• The elaborate written goals, careful communication of goals, and detailed performance evaluation required in an MBO program increase the volume of paperwork in an organization.

MANPOWER PLANNING AND DEVELOPMENT

MANPOWER PLANNING AND DEVELOPMENT

Manpower planning and development is the first and the most important function of management. The essence of manpower planning and development involves a critical analysis of the supply, demand, surplus, shortage and utilization of human resources. It is important to note that manpower planning is often taken as the most important resources of an organization because through it, other resources (material and financial) are harnessed to meet the need of man

The concept of manpower planning has been given different definition by different authors. Malthus and Jackson (1992) see manpower planning as the process of analyzing and identifying the need for the availability of human resources so that the organization can meet its human resources objectives.

Griffin (1997) sees human resources planning as a plan which involves accessing trends, forecasting the supply, demand for labour and the development of appropriate strategy for addressing any differences.

Ehegbunna (1992), sees manpower planning as having the right person in the right number, in the right place and at the right time.

Olutola (1986), when manpower planning is mentioned, it generally refers to the projection of future requirement for a given number of people with specific skill to meet the demand of various sector of the economy.

Manpower planning and development helps measurement to determine:
(a) Number of employees
(b) The level of experience each must possess
(c) Their salary scale
(d) The best way to utilize them in an activity which practice increase skills.

TYPES OF MANPOWER PLANNING AND DEVELOPMENT:

There are many ways to classify plans. According to Okoye (1997), these could be thought of in terms of substance of planning, the variety of plan that is produce, and the value to be anticipated from planning.
Koontz etal (1980) classified manpower planning and put them in a hierarchy as below;

(1) Purpose of mission:– The mission or purpose identifies the basic function or task of an enterprise or agency or any part of it.

(2) Objectives:– This is the results towards which the organization activity is directed.

(3) Strategies: This is used in the military to mean plan made in the tight of what is believed on adversary might not be so. The purpose of strategies then is to determine and communicate through a system of major objectives and policies a picture of what kind of enterprises is envisioned.

(4) Policies:– Hicks and Gullet (1981), define policies general statement that guide decision making. Within the framework existing or anticipated resources.

(5) Budget:- Agu (2003), budget are statement of financial resources, the budget is necessary for control but cannot serve as a sensible standard of control unless it reflects plan.

EFFECTS OF MANPOWER PLANNING AND DEVELOPMENT:

According to Agu (2003), Manpower planning and development gives the organization a sense of direction and purpose. Thus, the consistent guides needed in resources allocations are used in performing other activities are provided.

It increases the skill of a manager in accurate decision making and thereby reduces the chances of mistakes and errors. It also reduces waste of materials, time and money.

According to Obi (2005), manpower planning and development is used to anticipate problems and take corrective action before they become menace to the organization operations and to co-ordinate all significant activities so that personnel, facilities and materials can be made available at required time.

It also minimizes redundancy, duties and correctly helps to allocate duties and positions in business. It set a precise practicable and understandable manner in the organization. It provides the means of integrating and viewing the organization as well as visualizes how the overall goals are interrelated in achieving the overall goals rewarding subordinates.

According to Drucker (1954) defines it as a means of using subordinates. It is a means of using goals to motivate people rather than to control them.

FACTORS THAT INFLUENCE MANPOWER PLANNING AND DEVELOPMENT IN NIGERIA

(1) Educational factor:- The pursuit of wrong policy or a shift in the educational policy of a country can cause a shortage in manpower requirement of a nation. This is in the case of developing countries where the educational policies had focused on the trading of administrative personnels to the neglect of their technical counterpart. The result is that, the colonial masters had to escort their labour in the areas of scarcity to the former colonies thereby getting employment for their nationals.

(2) Technological factors:- With change in technology, there must be change in skill requirements of industries. Many jobs are been deskilled because many factories, apart from manufacturing new parts are decommissioning old ones while many joinery workers are now factory maids. Therefore a change in the technology employed in an organization or in any arm of the enterprise or the use of semi-finished
product will have definite effect on human resources, especially on their occupation and skill.

(3) Social change or factors:- Experience has shown that many youths, do not want to remain in rural areas but want to go to the urban centres where they can enjoy social amenities provided by the government. Where there is a dearth of labour for the industries located in the rural areas, there is excess for those in the urban areas.

(4) Economic factors:- Economic also play an important role in the labour supply and mobility in any country. In the case of early 1970’s that is immediately after the civil war for instance, there was a general reconstruction and rehabilitation, and the Nigerian economy was growing fast. This lead to more employment competition and some skills become scarce.

(5) Political changes:- A change in government in this country usually put fear in organization or enterprises as the policy statements of successive government create one hardship or the other for industries and some time disrupt continuity.

References

Bedeian Arthur G. (1987); Management, CBS College Publishing, New York.

Burton Gens (1997); Management Today; Principles and practice New Delhi, McGraw Hill Tata.

Drucker P.F.G (1973); Management; London: Heinemann Publication.

Drunker P (1977); People and Performance the best of Drunker on Management London: Heinemann Ltd.

Ejiofor P.N.O (1989); Foundation of Business Administration London: Africa Feb. Publishers Ltd.

Eyre E.C (1984) Mastering Basic Management London, Macmillan Education Ltd.

Glueck F.W (1980); Management (2nd Ed.) C.d Illinois: The Dryden Press.

Handy C.C.B (1981); Understanding Organization, Great Britain: Penguin books.

Haywood Phil (1974); Planning and Human Need; Singapore: McGraw Hill Book Company.

Koontz H et al (1993); Management: A Global Perceptive New York: McGraw Hill.

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