Management by Objectives (MBO)

  Management by Objectives

  (MBO)

  Dr. Bagus Nurcahyo

Management by Objectives

  (MBO)

  • Managers AND employees define objectives for every department, project, and person and use them to monitor subsequent performance
  • Divide problem into manageable, “bite-size” chunks

Essential Steps for MBO

  • Set Goals (The most difficult step)
    • – What are we trying to accomplish?

  • Develop Action Plans – “What do we need to do to get there?”
    • – Groups and individuals

  • Review Progress – “How are we doing?”
    • – Periodically (How Often?)
    • – Does plan need to be tweaked?

  Other Types of Plans

  • Single-use plans - developed to achieve objectives

  that are not likely to be repeated

  • – Can be BOTH programs and projects
    • Standing plans - used to provide guidance for tasks

  performed repeatedly

  • – Primary standing plans are organizational policies, rules, and procedures
    • Contingency Plans – used to deal with dynamic

The New Planning Paradigm

  • Set stretch goals: Highly ambitious goals that are clear, compelling, and imaginative.
  • Create an environment that encourages learning.
  • Design new rules for planning staff.
  • Make continuous improvement a way of life.
  • Planning still starts and stops at the top.

Responsibility

  • Obligation to complete a task
    • – Assigned, assumed, or conferred

    >Exists individually and at all levels of an organization
  • Responsibility CAN be delegated but CANNOT be transferred

  

Authority

  • Right to use assigned resources, including personnel, to accomplish a task or objective
    • – Right to issue orders and expect obedience
    • – Power or control to act on responsibility

  • CAN and should be delegated
  • Sources:
    • – Positional and/or Personal Power

  Accountability

  • Being answerable for responsibilities
    • – Actions OR Failure to act

  • Linked to responsibility
    • – Results NOT “intentions”
    • – Emphasizes necessity to consider all possible consequences

  • CAN NEVER be delegated

Potential Advantages

  • Improved Decision Quality • Enhanced subordinate commitment
  • Time management
  • Job enrichment
  • Development of subordinates
    • – Creates learning opportunities
    • – ID potential leaders

What to Delegate

  • Tasks better done by subordinate
  • Urgent, not high priority tasks
  • Tasks relevant to a subordinate’s career
  • Tasks of appropriate difficulty
  • Both pleasant and unpleasant tasks
  • Tasks not central to the manager’s role

Types of Change

  • Operational Change – Efforts to improve basic work and organizational processes
  • Improve Efficiency • Improve Quality • Transformational Change – Redesign/renew the entire organization
  • Different product

  Organizational Change

  • Adoption of a new idea or behavior
  • • To survive/prosper organizations must

    continuously adapt
  • Leaders must:
    • – Observe trends, patterns, and needs
    • – Identify threats/opportunities, then
    • – Use planned change to adapt

Types of Change

  • Operational Change – Efforts to improve basic work and organizational processes
  • Improve Efficiency • Improve Quality • Transformational Change – Redesign/renew the entire organization
  • Different product

  “Learning Organization” Everyone engaged in problem

  Everyone engaged in problem solving and continuous solving and continuous improvement improvement

  • Leadership provides vision/strategy
  • Positive environment
  • Good Communication flow (Share Info)
  • Everyone involved (Empowerment)
  • Redefine Culture:
    • – Rethink roles, processes and values

  Forces for Change External Internal

  Management Customers decisions Competitors Employees

  Production Technology Inefciencies Economic

Idea Champions

  • • Sees need for, and champions, change within

    the organization
  • Change does not occur by itself
  • Four roles in organizational change:
    • – Inventor – Champion – Sponsor
    • Self-interest Perceived personal impact (Loss of something of value) Loss of power/prestige/benefits Lack of understanding and trust Do not understand change or intentions behind it
      • Uncertainty Lack information; Fear of unknown Change brings discomfort and dislocation Different assessments and goals

    Resistance to Change

      Only use when rapid response is urgent.

      Implementation Tactics to overcome resistance

    • Communication/Education
      • – Information needed by those resisting change

    • Participation – Involve resistors in designing change
      • – Helps identify potential problems and differences in perceptions among employees

    • Negotiation - win acceptance with formal bargaining • Coercion - resistors accept or suffer consequence.

      Leadership Differences

    Transactional leaders:

    • – Excel at management functions
    • – Are hardworking
    • – Are tolerant – Are fair minded.

      Leadership Differences Charismatic Leaders:

      Inspire/motivate people to do

    • more, despite obstacles and personal sacrifice. State a vision of an imagined
    •                              

      future with which employees   identify.

      Shape a corporate value system

    • for which everyone stands.

      Leadership Differences

      Transformational Leaders:

    • – Bring about innovation and create significant change in followers and organization.
    • – Lead changes in the organization's mission, structure, and human resource management.
    • – Focus on intangible qualities

      Vision, shared values, ideas to build

      

    Network Centric Warfare

    • Speed of Command
      • – Information superiority – Understand vice data
      • – Forces act with speed, precision, and reach
      • – Results rapidly foreclose enemy options, synergistic effects dominate

      Enables neutralization of enemy forces at outset

    • of hostilities. Changes his strategy completely.Lock in our success, lockm out his alternatives.

    Transactional Leadership

    • Exchanged-based relationship in which leader and followers get some (or all) of their needs met
      • – Reward for good performance
      • – Discipline for poor performance

      >Dependent on leader’s control of rewards and penalties
    • Transitory:

      Transactional Leadership

    • Works well in stable organizations
      • – Does military qualify? • Generally easier to use.

    Why? Why?

    • Transactional Leaders:
      • – Excel at management functions
      • – Stress plans, schedules and budgets

    • Explain what is required/what will be received if requirements met

    Transformational Leadership

    • Leader has powerful vision of what organization could be
      • – Broadens employee interests to look past self-interest for the good of the group
      • – Raises standards/Challenges the status quo
      • – Generates awareness and acceptance

    • Cultivates strong bonds with followers

    Transformational Leadership

    • Charisma (Draw to the leader)
      • – Vision, sense of purpose, larger meaning
      • – Instill pride/Sense of being elite
      • – Gain respect and trust

    • Inspiration (Impact on followers)
      • – Communicates high expectations
      • – Uses symbols to focus efforts