Here is a term paper on ‘Management by Objectives (MBO)’ for class 11 and 12. Find paragraphs, long and short term papers on ‘Management by Objectives (MBO)’ especially written for school and college students.
Term Paper on Management by Objectives (M.B.O)
Term Paper Contents:
- Term Paper on the Definition of M.B.O
- Term Paper on the Concept of Management by Objectives (M.B.O)
- Term Paper on MBO Features
- Term Paper on the Operating Mechanism of MBO
- Term Paper on the Advantages of MBO
- Term Paper on the Problems with MBO
- Term Paper on Making MBO Effective
Term Paper # 1. Definition of M.B.O:
Define each individual’s major area of responsibility in terms of results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members. He also stressed that MBO is not merely a set of rules but is a way of thinking about management.
Dale D. McConkey has defined it as an approach to management planning and evaluation in which specific targets for a year or some other length of time are established for each manager on the basis of the results which each must achieve if the overall objectives of the company are to be realised.
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According to Drucker MBO requires, “Each manager to develop and set the objectives of his unit and himself. Higher management must, of course, reserve the power to approve or disapprove his objectives. But their development is a part of manager’s responsibility; indeed it is his first responsibility.”
These definitions centre round the following aspects:
(a) MBO requires a manager to formulate measurable objectives for his job.
(b) The development of objectives is a joint product of the manager and his immediate superior.
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(c) A system of information must be provided.
Term Paper # 2. Concept of Management by Objectives (M.B.O):
Other names of Management by Objectives are “Management by Results” “Management by Goals and Results” “Goals Management” “Work Planning and Review”.
This concept of MBO was introduced and popularized by Peter F. Drucker in 1954. Later it was developed by various writers like John Humble, Dale Mc Conkey, George Ordiorne, Edward Schleh and Douglas McGregor. In recent years this has become a philosophy of managing in many enterprises and this has become the most dynamic and exciting thinking in management.
John Humble defined MBO as a dynamic system which integrates the company’s need to achieve its goals for project and growth with manager’s need to contribute and develop himself. According to George S.Ordiorne the system of MBO can be described as a process whereby the superior and subordinate managers of an organisation jointly identify its common goals.
Term Paper # 3. MBO Features:
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The nature of MBO can be described as follows:
It has become a comprehensive management planning and control technique and is bound to affect the entire organisational structure culture and style. It calls for regulating the entire process of managing in terms of meaningful specific and verifiable objectives at various levels of management. It stimulates meaningful action for better performance and higher accomplishment. It is a must for decentralisation and decentralisation cannot work without the support of MBO.
William F.Glueck has listed the following features of MBO:
(a) Objectives must be defined in terms of measurable results.
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(b) The indicator of the results or the method of measuring the result should be specified as a part of the objectives.
(c) The time period for accomplishing the result should be specified.
(d) Objectives are to be in writing and they should be revised as and when needed.
(e) A set of objectives should include regular or routine goals and new development goals.
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(f) A set of objectives should have priorities or weights assigned to each one.
(g) Objectives should include a plan of action for accomplishing the desired results.
MBO programmes are basically designed to improve ’employee’s motivation’ through their participation in setting their individual goals and knowing in advance precisely how they will be evaluated. MBO programme includes personnel development by participation in the job and in the development of objectives.
Term Paper # 4. Operating Mechanism of MBO:
The operating mechanism of MBO is simple. The objectives and plans for various levels are set by the management. After implementing the plans for a particular period of time (Three to four months) each manager and his superior get together for review of results. They evaluate performance and develop plans for the future in the light of present performance.
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The process of MBO revolves around setting up of organisational goals which is translated downwards. It is a continuous process. This facilitates organisations in modifying objectives to suit the needs of the situation.
The steps in MBO are:
(1) Setting the objectives
(2) Redesigning of job description
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(3) Establish check points
(4) Appraisal of performance and counseling.
(1) Setting the Objectives:
The organisation is to establish verifiable objectives for the organisation and for the various positions at various levels.
For the objective setting the management is to take the following steps:
(a) An assessment about the resources is to be made.
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(b) Conduct market surveys to know the demand potential of the goals and services.
(c) With the help of forecasting demand is to be estimated.
(d) Establish desirable long-range and short-range objectives.
(e) Top management is to establish the specific goals to be achieved in key areas for the survival and growth of the organisation.
(f) These are to be translated downwards for each and every department. This is to be achieved by interacting with the lower level people. The point to be remembered here is that the objectives are to be developed at the lower level.
(g) Finally the plan is to be implemented and reviewed to know the veracity of the objectives.
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(2) Redesigning of Job Descriptions:
After setting the objectives there may be a change in job descriptions of various positions. This may result in a revision of the existing organisation structure. After redesigning the structure necessary changes are to be incorporated in organisation charts and manuals. The job descriptions of various jobs must define their objectives, responsibilities and authority. They are to lay down the relationship with other job positions in the organisation.
(3) Establishing Check Points:
Check points are to be established to correlate performance with standards. The standards are to be quantified with the object of making them easily intelligible to the employees.
The focus is to be on key result analysis and it should specify the information:
(a) The overall objectives of the job of the subordinate.
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(b) The key result he must achieve to fulfil his objectives.
(c) The long-term and short-term priorities of the job.
(d) The scope and extent of assistance a manager may expect from his superior and related departmental managers and the assistance he must extend to other departments.
(e) The nature of information and reports he will receive to carry out self-evaluation.
(f) The standards by which the performance is to be evaluated.
(4) Appraisal of Performance and Counseling:
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The points to be considered in connection with performance appraisal are:
(a) There must be an appraisal of performance at least once in a year in the light of prevailing circumstances and given objectives.
(b) A separate form is to be designed for review and this will depend on the nature of the enterprise.
(c) The performance evaluation is to be done on the basis of established objectives. Under MBO objectives are established both by subordinate and superior. So performance evaluation is done in an atmosphere with full understanding.
(d) Further the review of performance is done with object improving subordinate’s performance. A proper analysis of strength and weaknesses will definitely improve the operating potentials of the employees at various levels.
Term Paper # 5. Advantages of MBO:
The advocates of MBO claim that it provides the following advantages. They are viewed from:
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(a) The point of view of the enterprise
(b) Point of view of superiors
(c) Point of view of employees.
(a) Enterprise Point of View:
Focuses managers’ efforts on right objectives:
i. It improves the objective achieving capabilities.
ii. It provides the data on the basis of which managers can be rewarded objectively.
iii. It helps to pinpoint human development needs.
iv. It helps the manager to identify people who deserve promotions.
v. It improves the capability of the organisation to introduce changes as and when needed. It facilitates the manager to co-ordinate the various efforts of an organisation.
(b) Point of View of Superiors:
i. It helps the superior to coach his subordinates.
ii. It helps to establish precise and effective appraisal tools.
iii. It motivates subordinates to perform better.
(c) Point of View of Employees:
It increases job satisfaction. It clearly states what is expected of the employee.
It provides measurable objectives that the employee is expected to achieve. Besides these points the major benefit of MBO is the linking of the objective setting with individual motivation. Further it improves the employee morale which result from face to face communication between superior and subordinates.
Term Paper # 6. Problems with MBO:
MBO has certain weaknesses or difficulties. They are either inherent in the system or due to the poor implementation of the system. As a philosophy it appears to be simple but in reality many people find it difficult to implement it.
The limitations of MBO are:
(a) Inadequate Top Management Support:
The top management considers MBO as a panacea for all problems they face. So they implement MBO by delegating it somebody else. They provide only lip sympathy. Without the constant participation and strong support of the top management MBO does not work successfully.
(b) Inadequate Explanation of MBO:
MBO can succeed only when employees and managers at various levels are made to understand right from the introduction stage. MBO will not work if it is not adequately explained.
(c) Poorly defined Objectives:
MBO can succeed only when objectives are set in measurable terms. In the absence of quantified objectives it is difficult to evaluate the performance of employees.
It is difficult to establish objectives in the following cases:
(i) Short-term objectives and unimportant ones.
(ii) In very volatile environments.
(iii) It is hard to develop when the position’s job description and responsibilities are vague.
Further the achievement of short-term objectives is to be linked with the achievement of long-term objectives.
(d) Personality Conflicts:
MBO is not appropriate for all levels and for everyone. It will succeed only when managers and subordinates feel comfortable with it and willing to participate in it. In case of personality conflict between superiors and subordinates it will be to set up MBO. It is extremely difficult when the participants do not get along.
(e) Lack of Training:
To ensure that MBO works it absolutely essential for the manager to use a liberal or moderate leadership style. But if the manager prone to sit down with the subordinate, dictates goals and targets with no input permitted from the subordinate and then demand they be met in a specified time.
The manager is not prepared to consider the influence of uncontrollable external factors or never worries about unrealistic objectives then there exists no two way communication. This spoils the morale and initiative of all employees.
(f) Inadequate Reinforcement of MBO:
MBO works well when proper feedback is provided by holding meeting at periodic intervals. They are to be held frequently to generate necessary feedback. The superior must get with the subordinate at the appropriate time. This will facilitate him to share with his superior his accomplishments and problems. In the absence of this the entire process will get diluted and it may be taken casually.
(g) Rigidity:
MBO tend to introduce inflexibility in the organisation. The set goals are to be reviewed and modified as and when needed. The superiors may not be prepared to modify objectives because of fear of resistance from employees. The lower level goals are to be modified to achieve the long- term objectives of the enterprise. This type of situation is to be handled effectively.
(h) Costly Process:
MBO is costly and time consuming. It is time consuming because it requires a lot of time to be spent on meetings for setting objectives and for review. It is costly because it takes away the time for managing to a greater extent.
(i) Overemphasis on Paper Work:
MBO is essentially a philosophy of management. When organisations convert this approach into costly, technique oriented paper work they virtually kill the spirit of it. Organisations may design various forms to vouch performance. This huge volume of paper work will be resisted by both employees and managers and the MBO process as well.
Term Paper # 7. Making MBO Effective:
To make MBO effective the steps to be taken are:
(a) Top Management Support:
It is essential that MBO should start at the top of the organisation. There must be the active participation of the top management. The top management must use objectives as an instrument for managing to set the right tradition at the top to be followed by the lower levels.
(b) Active Participation in Goal Setting:
In MBO goal setting is a joint exercise of both superior and subordinate. This is possible only when there is face to face communication. Further this must be followed by effective review of performance. So there must be effective two-way communication in the organisation in goal setting.
(c) Decentralisation of Authority:
Decentralisation expects a proper set of employees. The managers at various levels must be willing to delegate sufficient authority to subordinates. The subordinates must be capable of accepting challenging assignments by proper discussion with superiors. So decentralisation can succeed only when the managers and employees at various levels have a right attitude towards performance.
(d) Executive Orientation:
The executives are to implement MBO. They should be adequately oriented about the value of MBO. They must be exposed to proper training and understanding of MBO for its successful implementation.
(e) MBO is an Integrated Programme:
MBO must be integrated with all the organisation programmes ranging from financial activities, human resource programmes, product planning and development etc.
(f) In Setting up an MBO Programme:
The steps to be taken are clear cut specification of objectives is to be made. The naming of the departments and the units that are to participate is to be specified. Clarifying relationships between departments which are affected by MBO. Assign job responsibilities for MBO activities and ensure that job descriptions are clear. Establish time deadlines for achieving each stage of MBO and monitor its achievement.
(g) Setting of Measurable Objectives:
The organisation should set up realistic, important, measurable objectives at all levels. The objectives are to be clear, concise and unambiguous. They must be achievable by the person concerned. They must be motivating, challenging and interesting. They have to be consistent with various policies, procedures and plans of the organisation.
They have to be accurate in terms of what is actually desired by the organisation. Objectives are classified as critical objectives (which must be achieved) necessary objectives (which are rated as secondary) and desired objectives (which need to be achieved).
Finally the objectives must be measureable, relevant and important, challenging and attainable. So MBO is a philosophy of decentralisation and participative management. The subordinates are allowed to set goals for achievement in consultation with superiors. Their performance is evaluated against these standards and the superiors advise them in overcoming their shortcomings.