The Four Functions of Management

Subject : Management & Organizational Behaviour

Code : BMO 1102

Assessment 3 : Research Essay

Question : Define management by objectives and list the four elements

of this type of goal setting. Next, discuss three problems

associated with management by objectives. Can this

management technique be applied to your approach to this

subject (BMO 1102)? If so, how?

Name : Darwis Soesanto

VU Student Number : 3712716

Tutorial Group : Tutorial 4

Date of Submission : 21st September 2005

Lecturer's Name : Ms. Greeja De Silva

Table of Contents

Table of Contents 1

Introduction 2

Discussion

Four Elements of Management by Objectives 3

Three Problems Faced 4

Management by objective and its application 4

Conclusion 5

Introduction

How do managers plan? Do they must plan effectively? Do they plan alone? To understand these we must first understand what planning is.

Planning is:

1. Way of forecasting and predicting what will happen in the future to achieve goals and to cope with problems.

2. A process that involves defining the organization's goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work (Robbins et al. 2003).

3. The process by which managers establish goals and define the methods by which these goals and action statements (Dunham 1989)

4. The process of coping with uncertainty by formulating future courses of action to achieve specified results (Kreitner 2004).

There are two ways in setting organizational goals, which are traditional goal settings and management by objectives.

Management by objectives is:

1. A method where managers and their employees define the goals together, how to achieve the goals, and monitor the process.

2. A management system in which specific performance goals are jointly determined by employees and their managers, progress toward accomplishing those goals is periodically reviewed, and rewards are allocated on the basis of the progress (Robbins et al. 2003).

3. A method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance (Daft & Marci 2001).

4. A motivational technique in which the manager an employee work together to set employee goals (Kuzuhara 2002).

5. A comprehensive management system based on measurable and anticipatively set objectives (Kreitner 2004).

6. A management technique increasing employee involvement in the planning and controlling activities (Dunham 1989).

This essay will discuss about the management by objectives, its elements, problems faced, and its application in this subject.

Discussion

Four Elements of Management by Objectives

The first element of management by objectives is setting goal, which is the most important in management by objectives. The main point of goal setting is to have mutual agreement between employee and supervisor which will creates the strongest commitment to achieving goals, in other words, goals should be jointly derived (Daft & Marcic 2001). Through jointly agreed goals, the individual will be self-motivated to achieve these goals. Unfortunately, motivation is a much more complicated concept. There are many factors affecting motivation. MBO is therefore only one factor that can help to motivate (Yee Kah et al. 1999). In goal setting, managers and employee makes the goal together and agree that the goal is concrete and realistic to be achieved. Managers and employee have to have a total commitment in order to achieve the goals. The main contribution of management by objectives is its emphasis on the participation and involvement of people at lower levels, there is no place for domineering manager ("Here are the objectives I've written for you") or for the passive manager ("I'll go along with whatever objectives you set") (Kreitner 2004).

Next element or activities is collectively formulated an action plan, evaluating technique, and schedule (Kreitner 2004). An action plan is developed in order to attain the specified goals.

Then we implement the all the action plan and schedules according what have been set, and make a periodical review. Periodic review is the monitoring process of the work that has been done by all the employees and managers (Kreitner 2004). Works that has been done is reviewed by the managers and employees, ensuring that action plans work accordingly.

Last but not least, judge performances. This step is taken to evaluate whether goals have been achieved for both individuals and departments (Daft & Marcic 2001). Failure and success can be a yard-stick to evaluate performance and the designation of salary and other awards systems.

Three problems faced

First of all, management by objectives cannot be applied when the company faces rapid change. New goals must be set every few months when there is no time for actions plan and appraisal to