Text 17. Management by objectives

 

Management by objectives is about setting yourself objectives and then breaking these down into more specific goals or key results.

MBO is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. The principle behind MBO is to make sure that everybody within the organization has a clear understanding of the aims or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers acting to implement and achieve their plans, which automatically achieve those of the organization.

The one thing an MBO system should provide is focus. So, have your objectives precise and keep their number small. Most people disobey this rule, try to focus on everything, and end up with no focus at all.

For MBO to be effective, individual managers must understand the specific objectives of their job and how those objectives fit in with the overall company objectives set by the board of directors. "A manager's job should be based on a task to be performed in order to attain the company's objectives... the manager should be directed and controlled by the objectives of performance rather than by his boss."

The managers of the various units or sub-units, or sections of an organization should know not only the objectives of their unit but should also actively participate in setting these objectives and make responsibility for them.

The review mechanism enables leaders to measure the performance of their managers, especially in the key result areas: marketing; innovation; human organization; financial resources; physical resources; productivity; social responsibility; and profit requirements.

However, in recent years opinion has moved away from the idea of placing managers into a formal, rigid system of objectives. Today, when maximum flexibility is essential, achieving the objective rightly is more important.

The balance between management and employee empowerment has to be struck, not by thinkers, but by practicing managers. Turning their aims into successful actions, forces managers to master five basic operations: setting objectives, organizing the group, motivating and communicating, measuring performance, and  developing people, including yourself.

These MBO operations are all compatible with empowerment, if you follow the main principle of decentralization: telling people what is to be done, but letting them achieve it their own way. To make the principle work well, people need to be able to develop personally. Further, different people have different hierarchy of needs and, thus, need to be managed differently if they are to perform well and achieve their potential.

Empowerment recognizes "the demise" of the command-and-control system, but remains a term of power and rank. A manager should view members of his or her team much as a conductor regards the players in the orchestra, as individuals whose particular skills contribute to the success of the enterprise. While people are still subordinates, the superior is increasingly dependent on the subordinates for getting results in their area of responsibility, where they have the requisite knowledge. In turn, these subordinates depend on their superior for direction and "above all, to define what the 'score' if for the entire organization, that is, what are standards and values, performance and results."

The only place where meaningful management results can be won is the outside world. Managing for results is expansion of MBO into the marketplace. It is the theory and practice of how to produce results on the outside, in the market and economy.

To achieve these results, you should develop a solid, sound, customer-focused, and entrepreneurial strategy, aimed at market leadership, based on innovation, and tightly focused on decisive opportunities.

MBO creates a link between top management's strategic thinking and the strategy's implementation lower down. Responsibility for objectives is passed from the organization to its individual members. It is especially important for knowledge-based organizations where all members have to be able to control their own work by feeding back from their results to their objectives.

Management by objectives is achieved through self-control, the tool of effectiveness. Today the worker is a self-manager, whose decisions are of decisive importance for results.

In such an organization, management has to ask each employee three questions: 1. What should we hold you accountable for? 2. What information do you need? 3. What information do you owe the rest of us?

 

Exercise 12 1. Give Ukrainian equivalents.

To attain results, to fit in with, make responsibility for, key results, profit requirements, rigid system of objectives, employee empowerment, the command-and-control system, requisite knowledge, decisive opportunities, strategy implementation.

 

Exercise 122. Find English equivalents.

Цілі, що можна досягнути; доступні ресурси, впроваджувати плани, рада директорів, компанія в цілому, ієрархія потреб, підлеглі, отримання результатів, орієнтований на покупця, підприємницька стратегія, стратегічне мислення, звітний за.

 

Exercise 12 3 . Answer the questions.

1. What does MBO allow management? 2. What does the complete MBO system mean? 3. What is necessary for MBO to be effective? 4. What are the key results areas that are usually measured by leaders? 5. What is the today’s approach to the system of objectives? 6. What basic operations should be mastered by managers to turn their aims into successful actions? 7. Why is empowerment a term of power and rank? 8. What strategy should be developed to achieve the results? 9. In what way is MBO a link between top management and lower levels? 10. How is MBO achieved today?

 

Exercise 12 4 . Find out in the text word combinations “noun + noun”. Translate them, make your own sentences with them.

 

Exercise 12 5. Translate into English.

1. Цільовий менеджмент - це систематичний підхід, який дозволяє зосередитись на досягнутих цілях і отримати найкращі результати з доступних ресурсів. 2. Для того, щоб цільовий менеджмент був ефективним окремі менеджери повинні розуміти специфічні цілі своєї роботи, і як ці цілі співвідносяться з загальними цілями компанії. 3. Менеджери повинні оволодіти 5 основними операціями: встановлення цілей, організація групи, мотивація і комунікація, оцінка продуктивності праці, розвиток працівників. 4. Різні люди мають різну ієрархію потреб і таким чином, потребують щоб ними керували по-різному, щоб вони могли добре працювати і досягати свого потенціалу. 5. Начальник залежить від своїх підлеглих за отримання результатів у сфері їх відповідальності. 6. Відповідальність за цілі передається від організації до її окремих членів.

 

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