Gives one Success
MANAGEMENT
Business Objectives
An organization must formulate specific business objectives. These objectives should include not only immediate goals but also long-term proposals. After careful consideration, the management of You, Inc. has identified the following objectives:
A. To staff, train, and equip the business to answer the needs of the market, and to establish standards of excellence in performance that will exceed the norm in the industry:
Training should be handled entirely by Management.
B. To monitor the day-to -day operations of the company in a manner consistent with current principles of management information systems;
Management must have daily, weekly, monthly, and yearly monitoring of ALL phases of business. Management is really information gathering, data dispensing, and analyzes.
C. To establish and assign responsibility for such monitoring, and to evaluate performance on a regular and continuing basis; and
D. To offer a comprehensive package of programs: (fill in)
For: (fill in)
MANAGEMENT
Organizational Objectives
The organizational structure of a company provides a management tool to direct the company in accordance with good management systems. It provides and defines lines of authority and responsibility, and it allows for the effective implementation of polices adopted by the Board of Directors. The following organizational objectives have been identified by management:
A. To review and update business records;
B. To separate services from products;
C. To restructure departments throughout the company;
D. To clarify lines of authority, responsibility, and communication;
E. To define job responsibility;
F. To streamline work flow;
G. To organize an outside team of advisors to management;
H. To evaluate the organizational structure of the company on a regular basis
ALL OF THESE AND MORE ARE THE FUNCTION OF
MANAGEMENT.
Management by Objectives and Self-Control
In Brief, The system of Management by Objectives can be describes as a process whereby the superior and the subordinate mangers of an organization jointly identify their common goals, define each individuals major areas of responsibility in terms of the results expected of her/him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.
Peter Drucker's emphasis upon the Results of managerial actions rather than the supervision of activities was a major contribution for it shifted the entire focus of Management thought to Productivity - Output - and away from work Efforts - the Inputs.
A USER'S GUIDE TO MBO
WHAT RESULTS SHOULD YOU EXPECT?
Business institutions need objectives and concentration of efforts on goals and results -- that is, management. These are the needs Management by Objectives and Self-Control (MBO) promises to satisfy. But the same reasons which make MBO potentially so productive also make it only too easy for business to mistake MBO procedures for the substance of both management and objectives. The procedures may encourage the fatal error of misusing MBO as a substitute for thinking and decision making. MBO is both management by OBJECTIVES and MANAGEMENT by objectives. What is needed, therefore, are two sets of specifications -- one spelling out the results in terms of OBJECTIVES and one spelling out the results in terms of MANAGEMENT.
WHAT ARE OUR OBJECTIVES? WHAT SHOULD THEY BE?
The first result, and perhaps the most important one which the administrator needs to aim at in applying MBO, is the clear realization that her department has no OBJECTIVES. What passes for objectives are, as a rule, only good intentions.
The purpose of an objective is to make possible the organization of work for its attainment. This means that objectives must be operational: Capable of being converted into specific performance, into work, and into work assignments. The first work to be done is to identify what the objectives should or could be.
The moment this question is raised, however, it will also be realized -- and this is the second result to be obtained -- that objectives are ambiguous, ambivalent, and multiple. In attempting to reduce pious intentions to genuine objectives, the administrator will invariably find that equally valid objectives are mutually incompatible or, at least, quite inconsistent. Thus the most important result of Management by Objectives is that it forces the administrator into the realization that there cannot be one single objective.
To call realization of this fundamental problem a result of Management by Objectives may seem paradoxical. Yet it may be the most important result, precisely because it forces the administrator and his agency to a realization of the need to think and the need to make highly risky balancing and trade-off decisions. This should be one of the results management by Objectives strives for, which have to be attained if MBO is to be an effective tool that strengthens the performance of the organization. The next area in which management by Objectives has to attain results is that of PRIORITIES and POSTERIORTIES.
Business, almost without exception, have to strive to attain multiple objectives. At the same time, each area of objectives will require a number of separate goals. Yet no organization is capable of doing many things, let alone doing many things well. Organizations must concentrate and set priorities. By the same token, they must make risky decisions about what to postpone and what to abandon -- to think through posteriorities.
One basic reason for this need to concentrate is the Communications problem within the organization. Organizations which try to attain simultaneously a great many different goals end up CONFUSING their own members. (what I call the disincentive of confusion) Another good reason for concentration of goals is that no organization has an abundance of truly effective resources. We have all learned that money alone does not produce results. Results require the hard work and efforts of dedicated people; and such people are always in short supply. Yet nothing destroys the effectiveness of competent individuals more than having their efforts splintered over a number of divergent concerns -- there is nothing more frustrating or less productive than to give part-time attention to a major task. To achieve results always requires through and consistent attention to the problem by at least one effective person. However even a unitary, or simple goal often requires a choice between very different strategies which cannot be pursued at the same time; one of them has to be given priority, which means that the other one assumes secondary status or is abandoned for an unspecified time. For in strategy, timing is of the essence. Nothing is less productive than to do five years later what would have been an excellent and worthwhile program five years earlier. Business, of course, does not like to abandon. The product or service that no longer serves a purpose, no longer produces results, no longer fulfills a major need, is usually also the product or service which the people now at the top have spent the best part of their working lives to create and make succeed. However, in business enterprise, the market eventually forces management to face up to reality and abandon yesterday.
Therefore, essential to MANAGEMENT by Objectives is the establishment of priorities. This requires first decisions concerning the Areas of Concentration. Equally essential is the Systematic Appraisal of all Products and Activities in order to find the candidates for abandonment. It is wise to put each product and service (forms and reports) on trial for its life every two or three years to ask:
"If we had known what we now know at the time we established this thing,
would we have gotten into it?"
If the answer is NO, one does not say
"What do we have to do to make it viable again?"
One does not even say
"Should we consider getting out of it?"
One says,
"How fast can we get out?"
Goals of Abandonment and schedules to attain these goals are an essential part of MANAGEMENT by OBJECTIVES, however unpopular or disagreeable they are. The next Results are specific GOALS, with specific TARGETS, specific TIMETABLES, and specific STRATEGIES. Implicit in this is the CLEAR DEFINITION of the RESOURCES needed to attain these goals, the efforts needed, and primarily the allocation of available Resources -- especially of available PERSONPOWER.
A "plan" is not a PLAN unless the resources of competent, performing people needed for its attainment have been allocated. Until then, the plan is only a good intention; in reality not even that.
Finally, MANAGEMENT by OBJECTIVES needs to define HOW Performance can be MEASURED, or at least JUDGED. To think through the appropriate measurement is in itself a policy decision and therefore highly risky. MEASUREMENTS or at least Criteria for Judgment and Appraisal, define what we mean by PERFORMANCE. They largely dictate where the efforts should be spent. For this reason it must be emphasized that measurements need to be measurements of performance rather than that of efforts. Thus with measurements defined, it then becomes possible to Organize the Feedback from Results to Activities.
WHAT IS MANAGEMENT? WHAT SHOULD IT BE?
MANAGEMENT by OBJECTIVES has to attain a number of results to be properly applied. The first result is Understanding. MANAGEMENT by objectives is not a way to obtain agreement. What MBO has to produce as the first MANAGEMENT result is understanding of the difficulty, complexity, and risk of these decisions. To make them intelligently requires informed dissent. Informed dissent is essential where people of good will and substantial knowledge find out how differently they view the same problem, the same mission, the same task, and the same reality. Otherwise, symptoms rather than the underlying problem will be attacked; trivia rather than results will be pursued. People in an organization who seem to differ on the answers usually differ on what the right question is. The issues are of such complexity and have so many dimensions that any one person can be expected to see only one aspect and only one dimension rather than the total configuration.
However, effective action requires an understanding of complexity. It requires an ability to see a problem in all its major dimensions. Otherwise, a maximum of effort will produce no results, or more commonly wrong and undesired results.
MANAGEMENT by OBJECTIVES is an administrative process rather than a political process. This makes it more important to focus on understanding as the first management result -- bringing out the basic views, the basic dissents, the different approaches to the same task and the same problem within the organization.
The second management result of Management by Objectives is to produce Responsibility and Commitment within the organization; to make possible Self-Control on the part of the managerial and professional people. The desired result is willingness of the individual within the organization to focus his or her vision and efforts toward the attainment of the organization's goals. It is the ability to have self-control; to know that the individual makes their right contribution and is able to appraise himself or herself rather then be appraised and controlled from outside. The desired result in commitment, rather than participation!
Usually MBO says to the individual manager, here are the goals the company/organization. What efforts do you have to make to further them?
The Right Question Are:
What do you, given our goals, think the objectives should be, the priorities should be, the strategies should be?
What by the way of contribution to these goals, priorities, strategies, should this company hold you and your department accountable for over the next year or two?
What does your department aim for, separate and distinct from the company?
What will you have to contribute and what results will you have to produce to attain these goals?
Where do you see major opportunities of contribution and performance for this company and your component?
Where do you see major problems?
The subordinate and boss cannot communicate unless they realize that they differ in their views of what is to be done and what could be done. It is also true there is no MANAGEMENT by Objectives unless the subordinate takes responsibility for performance, results, and in the last analysis, for the organization itself.
The next results are Personnel/Decisions. MBO requires allocation of resources and concentration of effort. MANAGEMENT by Objectives should always result in changing the allocation of effort, the assignment of people and the jobs they are doing. It should always lead to a restructuring of the human resources toward the attainment of objectives. Job descriptions may be semi-permanent, but assignment should always be considered as short-lived. It is one of the basic purposes of managerial objectives to force the question. Which are the specific assignments in this position which, given our goals, priorities, and strategies, at this time make the greatest contribution?
Unless this question is being brought to the surface, MBO has not been properly applied. I t must determine what the right concentration of effort is and what the personpower priorities are, and then convert the answers into personnel action. Unless this is done, there may be objectives but there is no MANAGEMENT!
Similarly important and closely related are results in terms of Organization Structure. If the work in organization over the last sixty years has taught us anything, it is that structure follows strategy. MANAGEMENT by Objectives should enable the administrator to think through organization structure. Organization structure, while not in itself policy, is a tool of policy. Any decision on objectives, priorities, and strategies, has consequences for organization structure. The ultimate result of MANAGEMENT by Objectives is DECISION, both respect to the goals and performance standards of the organization and to the structure and behavior of the organization. Unless MBO leads to decision, it has no results at all; it has been a waste of time and effort (resources). The test of MBO is not knowledge, but effective action. This means, above all, risk-taking decisions.
The literature talks about MBO often as a "tool for problem solving." However, its proper application is as a means of problem definition and problem recognition. Perhaps even more important, it is a means of problem prevention.
Thus, MBO is not a procedure to implement decisions, but a systematic attempt to define, to think through, and to decide. Filling out forms, no matter how well designed, is not MANAGEMENT by Objectives and Self-Control. The Results Are!!
MBO is often called a tool for planning. It is not the same thing as planning, but it is the core of planning. MBO is usually called a management tool. Again, it is not all of MANAGEMENT. It is not the way to implement decisions on policy, on goals, on strategies, on organization structure, or on staffing. It is the PROCESS in which decisions are made, goals are identified, priorities and posteriorities are set, and organization structure designed for the specific purposes of the company.
It is also the people integrating themselves into the organization and directing themselves towards the organization's goals and purposes. But the success depends upon the administrator in applying MBO, he or she must obtain the right results, both with respect to OBJECTIVES and to MANAGEMENT.
From: Toward The Next Economics: and Other Essays
Chapter 5
by Peter F. Drucker
Management by Objectives gives you: Planning, Control, Organization, and Leadership (PCOL).
MBO takes organization/company Goals and translates them into Objectives.
MBO takes each persons task and fits them into the Company Goals.
Workbook/Outline of:
Management by Objectives and Self Control (MBO and SC)
1. Diagnosis:
Preliminary activities leading toward an understanding of needs,
jobs, technology, and organizational issues.
2. Planning:
Articulation of overall goals and strategies for organization;
management commitment to MBO process, and training development in its use.
3. Defining the Job:
Describe job, content, duties, requirements, and responsibilities.
4. Goal Setting:
Subordinate initiates interaction by developing a set of goals for the upcoming period.
These goals should be closely related to organizational strategies.
5. Objective Setting:
The type of goal(s) set is discerned (maintained, project, development)
and the goal(s) is turned into an objective by setting target dates,
choosing measurement methods, and prioritizing.
6. Review:
Superior reviews goals and objectives, offers suggestions for improvement, etc..
7. Agreement:
Steps 5 & 6 are repeated until supervisor and subordinate agree on goals and objectives for the period.
8. Interim Review:
Superior and subordinate get together to review the progress toward goal accomplishment during the evaluation period. These meetings can be scheduled any time during the period and focus not only on progress, but also on adjusting goals if informational, environmental, or organizational events so dictate.
9. Final Review:
At the end of the evaluation period, the superior and subordinate formally get together to review results. The goals here are analysis, discussion, and feedback for the next cycle. The process begins again.
You need a true team to put together individual efforts into a common effort. We as individuals contribute something different, but each person must contribute toward a common goal. Business performance requires that each job be directed toward the objectives of the whole business. This means that in particular each manager's job/supervisor's job must be focused on the success of the whole. The performance that is expected of the manager/supervisor must be derived from the performance goals of the business.
Planning:
Management by Objectives
Then (past)
Now (present)
Gap Between Measures
Then
Future Anticipation -- Present Situations -- Course of Action -- General Strategies -- Know Main Problem
Analyze Problem -- Choose Objectives -- Be Specific --Evaluate --Develop Programs
Start Over
Example: Problem -- errors or mistakes
How can each person cut or reduce errors by 20%?
It does not tell us how to do it, only Goals are set.
But each persons Objectives will be Specific, Time Bound, and Measurable.
STRATEGIC PLANNING
Strategic Planning is having the organization define its Mission, Goals, and Objectives. And Analyze if this purpose is needed. To Perform a Competitive Analysis to see if the organization is in tune with the Future Trends.
Management capacity -- in terms of people hours of talent available -- is the most important resources of any corporation and is also limited. Strategic Planning develops a frame of reference for analyzing the corporation, its individual business and its competitors. The objective is to provide management with the tools they need to deploy their creative entrepreneurial talent more efficiently by focusing on strategically relevant issues, using guidelines based on the ever increasing body of research available today.
The Disincentive of Confusion
or
Technical Productivity and Real Productivity:
How they effect the bottom line.
I. Definition of productivity
A. Technical productivity
B. Real Productivity
II. Effective Management IS Real Productivity
A. Effective management is effective communication
i. Communication style preferences
ii. Learning style patterns
B. Productivity and task assignment
III. Assessment of Preferred Administrative Activities
IV. Learning Pattern Assessment
V. Matching Manager preferred activities and Employee learning patterns
A. Relationship between preferred administrative activities and tasks assignments,
a team building approach
B. Identification of learning patterns
VI. Strategies to effect Real productivity
A. Communication and learning patterns
B. Assignment control as KEY to productivity
VII. Goals and Objectives
A. How meeting objectives IS Real productivity
B. How Real productivity effects goals
VIII. Technical Productivity and the Bottom Line
A. How REAL productivity effects Technical productivity
B. Technical Productivity and The Bottom Line
Appreciation may be the most important job of management.
Developed by
Bruce Perlman, Ph.D.
and
Charles McGruder, Ph.D.
| Last Updated: 10/19/22 |