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
- 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
- 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.
- – Excel at management functions
- – Are hardworking
- – Are tolerant – Are fair minded.
- more, despite obstacles and personal sacrifice. State a vision of an imagined
- for which everyone stands.
- – 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
- Speed of Command
- – Information superiority – Understand vice data
- – Forces act with speed, precision, and reach
- – Results rapidly foreclose enemy options, synergistic effects dominate
- of hostilities. Changes his strategy completely.Lock in our success, lockm out his alternatives.
- Exchanged-based relationship in which leader and followers get some (or all) of their needs met
- – Reward for good performance
- – Discipline for poor performance
- Transitory:
- Works well in stable organizations
- – Does military qualify? • Generally easier to use.
- Transactional Leaders:
- – Excel at management functions
- – Stress plans, schedules and budgets
- Explain what is required/what will be received if requirements met
- 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
- 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
Resistance to Change
Only use when rapid response is urgent.
Implementation Tactics to overcome resistance
Leadership Differences
Transactional leaders:
Leadership Differences Charismatic Leaders:
Inspire/motivate people to do
future with which employees identify.
Shape a corporate value system
Leadership Differences
Transformational Leaders:
Vision, shared values, ideas to build
Network Centric Warfare
Enables neutralization of enemy forces at outset
Transactional Leadership
Transactional Leadership