Management by objectives: a case study

Abstract

Management by objectives is a relatively new phrase in the management literature and this report investigated some of the characteristics and implications of this approach to management.The literature on this topic was reviewed where it was found that management by objectives was concerned with the identification 'of the important areas in which objectives need to be set, the specification of the relevant objectives within these areas, and the derivation of adequate plans to ensure that the objectives will be achieved. It was advocated that there should be a broad range of objectives established in every area affecting the survival of the organisation.The review of literature was followed by a case study in which management by objectives was introduced into an industrial organisation,, Field conditions that need to be satisfied if action research of this kind is to be conducted were carefully examined.Working according to the principle of management by objectives involved several phases of operations. The first dealt with establishing objectives and corresponding levels of performance or targets. Next was the period in which corrective action was taken if accomplishment looked like falling short of expectation. At the end of this period a work review session was held in which variances were examined, and factors preventing the achievement of the objectives identified. This led to the establishing of revised objectives and targets for the new period of operation.It was found that establishing and working towards the achievement of objectives had implications for other management practices, It provided a means of readily identifying the training needs within an organisation, and could offer a rationale for formal appraisal concerning questions of promotion and possibly aspects of salary administration.These practical aspects of the research were supplemented by an analytical study involving the assessment of organisational effectiveness. It was found that the organisational units examined in this study could be placed on a scale of effectiveness, so that those units that were "effective" were so over a range of ten organisational criteria, while those units at the other end of the scale were rated poorly with respect to most of the criteria.It was also hoped, to use the same kind of criteria to assess the change in effectiveness resulting from the introduction of management by objectives. It was found, however, that the period of 13 months over which the research was conducted was too short for there to be fundamental changes brought about in some of the organisational variables used in the above analysis.