\Management By Objectives

Management by objectives:

Management by Objectives(MBO) is a process of agreeing uponobjectives within an organization so that management and employeesagree to the objectives and understand what they are in the organization.

The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'.

MBO: A process through which specific goals are set collaboratively foe the Organisational as a whole and every unit and individual within it: the goals are than used as a basis for planning, managing organisational activities and assessing and rewarding contributions.

Benefits of management by objectives

Balance stress on objectives. MBO forces managers to set objectives with balanced stress on key result areas. Thus, crisis conditions are avoided to take place in the organization.

Better managing. MBO forces managers to think about planning for results, rather than merely planning activities or work. Managers are required to ensure that the targets are realistic and needed resources are made available to subordinates to achieve the targets. Clearly set objectives for the subordinates serve as evaluation standards as well as motivators for them. Thus. MBO results in improvement in managing.

Better organizing. The positions in the enterprise can be built around the key result areas. Managers are required to clarify organizational roles and structures. Hence better organizing.

Greater employee involvement & commitment. If MBO program is installed in an organization, people are not just doing work, following instructions and waiting for guidance and decisions form above and things are not dictated by the superiors. They are now individuals with clearly defined goals which have been formalized through their own participation in the process.

Orderly growth of organization. MOB provides for the maintenance and orderly growth of organization by means of predetermined set of objectives for everyone involved. It also provides for measurement of what is actually achieved. The progress and even the tenure of management by objectives emphasizes the ability, skill and achievement of managers rather than their personality. Thus, the orderly growth and development of the organization is ensured.

Development of effective controls. MBO not only sharpens the planning, but also develops effective controls. It specifically provides for periodic reviews and annual performance appraisals serving as the needed feedback for further streamlining the objectives or targets. It makes possible for a manager to control his own performance, high deg4ree of self control resulting in stronger motivation.

Generating of an ideal atmosphere. Doughlas mcGregor says, the motivation, the potential for development, the capacity for assuming responsibility, the readiness to Direct behavior toward organization goals are all present in people. Management does not put them there. The essential task of management is to arrange organizational conditions and methods of operation .

Limitations:

Unfavorable to managers:

Some manager have an attitude that the regular attenuation required of them By MBO System, draws heavily on their busy time schedule and is not consistent with their roles.

Problems about Goals Setting.

MBO requires issuance of proper , exhaustive guidelines to goal setters The following are difficulties in goals setting:

i. Positive and active participation from subordinates is not easily forth forthcoming.

ii. Truly verifiable goals are bot easy to formalise

iii. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough long-range goals are vital for growth and development of the organization

iv. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle of the year.

v. Over-use of quantitative goals jeopardizes the qualitative aspect which may more important than quantification in some cases.

vi. Goals tend to take orecedebce or priority over the people who use them. Any action is acceptable of it series in the attainment of Gilas, without caring for its impact on people. Thus, all these difficulties come in the way of making management by objectives operational in an organisation. Further, managing involves more than goal setting.

vii. Time-consuming nature of management by objectives. Management by objectives system is time-consuming especially in the early phases of its introduction when employees are unfamiliar with its process

Social Responsibilities of Management

Social Responsibilities of Management

The term social responsibilities can be defined as the obligation of management towards the society and others concerned. Reason for Social Responsibilities:Business enterprises are creatures of society and should respond to the demands of society. If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive. Therefore the longterm interests of business are best served when management assume social responsibilities. The image of business organization liked with the quality of its products and customer service and the extent to which it fulfills the expectations of owners, employees, consumers, government and the community at large. For longterm success it matters a great deal if the firm has a favourable image in the public mind. Every business enterprise is a organ of society and its activities have impact on the social scene. Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advances the basic values of society, and constitute to its stability, strength and harmony. Increasing concern for the social responsibility of management, it is now recognized that besides taking care of the financial interest of owners, managers of business firms must also take into account the interest of various other groups such as employees, consumers, the government and the community as a whole. These interested groups are directly or indirectly affected by the pursuit of business activities and they are the stake-holders of the business enterprise. Responsibility towards owners: The primary responsibilities of management is to assure a fair and reasonable rate of return on capital and fair return on investment can be determined on the basis of difference in the risks of business in different fields of activity. With the growth of business the shareholders can also expect appreciation in the value of their capital. Responsibility towards employees: Management responsibility towards employees relate to the fair wages and salaries, satisfactory work environment, labour management relations and employee welfare. Fair wages should be fixed in the light of labor productivity, the prevailing wage rates in the same or neighbouring areas and relative importance of jobs. Managers salaries and allowances are expected to be linked with their responsibility, initiative and skill. But the spread between minimum wages and highest salaries should be reasonable. Employees are expected to build up and maintain harmonious relationships between superior and subordinates. Another aspect of responsibility towards employees is the provision of welfare amenities like safety and security of working conditions, medical facilities, housing, canteen, leave and retirement benefits.

Responsibility towards consumers: In a competitive market, serving consumers is supposed to be a prime concern of management. But in reality perfect competition does not prevail in all product markets. In the event of shortage of supply there is no automatic correction. Besides consumers are often victims of unfair trade practices and unethical conduct of business. Consumer interests are thus protected to some extent with laws and pressure of organized consumer groups. Management should anticipate these developments, satisfy consumer needs and protect consumer interests. Goods must be of appropriate standard and quality and be available in adequate quantities at reasonable prices. Management should avoid resorting to hoarding or creating artificial scarcity as well as false and misleading advertisements.

Responsibility towards the Governments: As a part of their social responsibility, management must conduct business affair in lawful manner, honestly pay all the taxes and dues, and should not corrupt public officials for selfish ends. Business activities must also confirm to the economic and social policies of the government.

Responsibility towards the community and society: The socially responsible role of management in relation to the community are expected to be revealed by its policies with respect to the employment of handicapped persons, and weaker sections of the community, environmental protection, pollution control, setting up industries in backward areas, and providing relief to the victims of natural calamities etc.

Management and organisation behavior I

Management: The attainment of organizational goals in an efficient and effective manner through planning, organizing, leading and controlling organizational resources

“Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”

-Harold Koontz and Heinz Weihrich

Impotence of management:

1. Optimum use of resources

2. Effective leadership and motivation

3. Establishes sound industrial relations

4. achievement of goals

Other important points are:

1. It helps in Achieving Group Goals – It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.

2. Optimum Utilization of Resources – Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.

3. Reduces Costs – It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.

4. Establishes Sound Organization – No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.

5. Establishes Equilibrium – It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.

6. Essentials for Prosperity of Society – Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.

Functions of management:

planning: is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.

Organizing

: is establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.

staffing: is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.

Directing: is influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives.

Controlling: is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.

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