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.