Objectives

 Meaning
 An Objective is a specific commitment to
achieve a measurable result within a
preset deadline.
 Nature of Objectives
 Objectives tends to constitute a hierarchy
as well as a network.
 A hierarchy ranges from a broad aim to
achieving specific targets.
Vision,Mission, Goals, Strategy
 Vision
 It is the long term goal of a company. For
instance, a newly formed commercial
bank might have a vision to become
among the top 3 local PCBs in its’ 10th
year of operation.
Vision,Mission, Goals, Strategy
 Mission: The UN has started out a mission to
restore peace in the war devastated Iraq.
Mission in the context of management
means the specific business a company
involves in, the target customers it serves.
Very often it is expressed in company’s
campaign. Also it is conveyed to the
shareholders through annual report. How a
company commits to serve the customers,
community or environment – forms a part of
mission statement.
Vision,Mission, Goals, Strategy
 Goal / objective
Goal or objective are used
interchangeably. The main goal for every
company could simply be put as profit
goal. Besides, profit companies have
other equally important goals, like growth,
market share, social responsibility,
environmental responsibility, etc.
Focusing more on profit goal could instill
unfair practices in the organization.
Vision,Mission, Goals, Objectives
 Strategy
 This is basically a war field terminology
which means a line of attack to combat
the rivals. This term has been warmly
accepted and widely used as a business
jargon. In the field of business no
company can ignore the existence of its
rival and being successful means that
company X has outperformed company Y
 Management by Objectives (MBO)
 MBO is defined as “the comprehensive managerial
system that integrates many key managerial activities
in systematic manner and that is consciously directed
toward the the effective and efficient achievement of
organizational and individual objectives.”
 Accordingly to Odiorne “MBO is a process whereby
the superior and subordinate managers of an
organisation jointly identify common goals, define
each individual’s major areas of responsibilities in
terms of the results expected of him, and use these
measures as guides for operating the unit and
assessing the contribution of each of its members”.
 Four Common Ingredients of the MBO
 1. Specificity:
 The objective in MBO should be clear and precise that
can be measured and evaluated. To state a desire to
cut costs, for example, may not be enough. Instead, to
cut costs by 5 per cent will be more clear, exact and
measurable objective.
 2. Participative Decisions / Objectives:
 In MBO goals are not imposed on people. The
superior and subordinate jointly set objectives to be
attained.
 Management by Objectives (MBO)
 3. Explicit Time: Each objective is to be
completed within a specific time period, be it
three months, six months or a year.
 4. Performance Feedbacks: The final
ingredient in MBO programme is feedback on
performance. It includes continuous and
systematic measurement and review of
performance. Based on these Corrective
actions are taken to achieve the planned
objectives.
 Advantages of MBO
 1. The need to clarify objectives is stressed and
suggestion for improvement is obtained from all
levels of management.
 2. All managers have a clear idea of the important
areas of their work and of the standards required.
 3. The performance of staff can be assumed and
their needs for improvement highlighted.
 4. Greater participation may improve morale and
communication.
 5. It makes individuals more aware of organisational
goal.
 Disdvantages of MBO
 1. It takes a few years to be effective.
 2. Some companies always tend to raise
goals. If these are too high, employees
become frustrated.
 3. Appraisals are sometimes made on
personality traits rather than on performance.
 4. Some employees do not want to be held
responsible and goals forced upon them may
lead to ill-feeling.
The MBO Cycle
 Step 1: Setting Objectives: It starts at the top
of the managerial pyramid and filter down one
layer at a time.
 It emphasizes on participation and
involvement of subordinates.
 Step 2: Developing Action Plan: Action plan
at each level of mgt. should be objective
oriented and complementing to each other
and not coflicting.
The MBO Cycle (contd.}
 Step 3: Periodic Review: To see whether the
set objective is still valid or need revision.
 Step 4: Performance Appraisal: Evaluation of
performance and appropriate response to
success and failure.
Effective implementation of MBO
program
 Organization culture:
culture that encourages individual
initiative and risk taking is compatible to
MBO. Since it is based on participative
decision making, it has to hold respect for
others sense of responsibility and
accountabilitry
Effective implementation of MBO
program
Commitment at the top:
MBO must practice performance based
reward policy. Sometimes a popular
manager could be non-performer, whereas
a task oriented autocratic manager could be
the achiever. If reward policy favors
nepotism rather performance the internal
design of MBO ‘d just collapse.
Effective implementation of MBO
program
Type of organization:
For public organization it is almost
impossible to implement MBO than in the
business organization. Because different
kinds of regulatory maters are involved in it’s
reward design.