Chapter 4: Essentials of Planning and Managing by Objectives

Codizar, Lintuan, Alzate, Dosdos, Agustin, Abrau

Summary
Planning: KNOWING WHAT IS EXPECTED TO ACCOMPLISH which involves decision making,
selecting of missions and objectives, and deciding on the actions to achieve them.
Types of plans:
MISSION/PURPOSE: Basic purpose or function or tasks of an enterprise or agency or any part of
it.
OBJECTIVES/GOALS: Represents not only the end point of planning but also the end toward
which organizing, staffing, leading and controlling are aimed
STRATEGIES: The determination of the basic long-term objectives of an enterprise and the
adoption of courses of action and allocation of resources necessary to achieve these goals
POLICIES: General statements or understandings that guide or channelize thinking in decision
making
PROCEDURES: Plans that establish a required method of handling future activities. They are
guides to action, rather than to thinking and they detail the exact manner in which certain
activities must be accomplished.
PROGRAMS: A complex of goals, policies, procedures, rules, task assignments, steps to be
taken, resources to be employed and other elements necessary to carry out a given course of
action
BUDGETS: A statement of expected results expressed in numerical terms. It may be called a
“quantified” plan. It may also be expressed in financial terms.
STEPS IN PLANNING
1. Being aware of opportunities
2. Establishing objectives
3. Developing premises
THE NATURE OF OBJECTIVES
• Objectives state end results, and overall objectives need to be supported by
subobjective. Thus, objectives form a hierarchy as well as a network.
• The next level of the hierarchy contains more specific objectives such as those in the key
result area in which performance is essential for the success of the enterprise.
Multiplicity of Objectives
Objectives are normally multiple. Some people think that a manager cannot effectively pursue
more than two to five objectives. The argument is that too many objectives tend to dilute the
drive for their accomplishment.

Quantitative and qualitative objectives

• Objectives must first be verifiable for it to be measurable. This means that one must be
able to answer this question: How do I know if the objective has been accomplished at
the end of the period?
MANAGEMENT BY OBJECTIVES
Widely used for performance appraisal and employee motivation, management by objectives is
a comprehensive managerial system that integrates many key managerial activitIes in a
systematic manner and is consciously directed toward the effective and efficient achievement
of organizational and individual objectives.
Benefits of management by objectives
• This managerial system often results in better managing, often forces managers to
clarify the structure of their organizations, encourages people to commit themselves to
their goals, and helps develop effective control
Weaknesses of management by objectives
• Failure to teach MBO is one of the weaknesses of certain programs. Managers must
explain to subordinates what it is, how it works and why it is being done, what part it
will play in appraising performance, and most importantly, how participants can benefit.