Business Steve - People And Organisations - Management By Ob

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Business Steve ­ Notes Emma Rudd BMA
People and Organisations
Management by Objectives (MBO)
Management by objectives emphasises the central role of objectives in business
management. According to the theory of management by objectives, managers
Identify and agree targets for achievement with subordinates
Negotiate the support that will be required to achieve these targets
Evaluate over time the extent to which these objectives are met
The objectives set for each individual should be coordinated to ensure that the
business achieves its corporate objectives. Each member of staff, therefore, makes
a contribution towards the business objectives.
A business has a mission statement giving the organisation's overall target. The
business corporate objectives contribute to achieving the mission statement. The
business functions then pursue objectives to assist the business in achieving their
corporate objectives. Finally the departments, teams and individuals should all make
their coordinated contribution to the attainment of the objectives of the functional
area of the business in which they work.
An important element of the operation of management by objectives is the review
of the extent to which the targets have been met and the development of new
goals, targets and objectives in the light of this experience.
Advantages of Management by Disadvantages of Management by
Objectives (MBO) Objectives (MBO)
It can improve communication within Some employees may see the setting
the organisation as target setting and of targets as threatening. A manager
evaluation process takes place. might set targets that the subordinate
considers unachievable.
Understanding what they are trying to All employees within the organisation
achieve, and how it helps the business must be committed to the technique if
achieve its overall goals may motivate it is to succeed and benefit the
employees. business.
Management by objectives can highlight Setting targets for highly specialised
training needs for managers and employees can be difficult and tends to
subordinates, improving their remove the focus from the
performance and productivity. mainstream corporate objectives.
The attainment of goals can help Modern businesses operate in a
employees to fulfil some of the higher business environment that changes
needs. (E.g. Selfactualisation, esteem rapidly. Objectives can quickly become
needs, and social needs.) out of date.
Teambased Leadership
Team working occurs when production is organised into substantial units of work.
This is in contrast to the division of labour that's requires employees to carry out

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Business Steve ­ Notes Emma Rudd BMA
simple task repeatedly. The team of people is likely to be working on a large task,
for example installing an engine in a car.
Team working is common within organisations and often accompanies delayering.
Major multinational organisations have organised their business on the basis of
teams. Businesses may assemble teams to solve problems and propose new
working methods or to manage major projects such as developing a new product.…read more

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Business Steve ­ Notes Emma Rudd BMA
Forms of Consultation
Consultation can take place informally within an organisation when managers have
discussions with employees. As an organisation grows, consultation is likely to
become more formal. Paternalistic leaders often used work councils to gain
employees views on major issues.
The degree of delegation used may depend on the skill and experience of managers
and subordinates, as ells as on the philosophy of the company concerned.…read more


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