Full Project – The concept of management by objectives (MBO)

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ABSTRACT

The main aim of this study is to examine Management by Objectives Concepts with focus on First Bank of Nigeria Plc. Management by Objectives is a way of getting improved results in managerial method, whereby the superior and the subordinate managers in an organization identifies major areas of responsibility, in which they will work, set some standards for good or bad performance and the measurement of results against those standards (Derek 2005: 156). Management by objectives is also called managing by objectives. However, there have been certain individuals who have long placed emphasis on management by objectives and by so doing have given impetus to its development as a system. The major sources of primary data were direct oral interview and questionnaire which was conducted among the staff. The major instrument used in the data collection was questionnaire. The data were presented in tables as frequency distributions and in analysis. In testing the hypotheses, the statistical test of proportion (Z-test) was applied. The major findings of the study were: MBO helps to obtain total commitment of all employees to work together in order to achieve a common goal; that good and prompt salary, promotion as when due, good relationship with management and recognition of achievement improves performance of the workers and by so doing enhances organizational performance when management by objectives is been adopted. The study recommended that managers should consult his subordinates in drawing up unit objectives which goes up the hierarchy from where it is modified, collected, approved and distributed throughout the organisation. Moreso, there should be autonomy in implementation of plans once the objectives have been agreed upon, the individual should enjoy wide discretion in choosing the means for achieving the objectives without being directed by higher ranking manager. Finally, the study revealed a lot of positive implications and relevance of management by objectives to modern day management of organizations especially in Nigeria. In practical terms, the operations of management by objectives requires that each manager of a unit draws up his department objectives with his subordinates in line with the centrally stipulated corporate objectives and mission.

CHAPTER ONE

INTRODUCTION

• BACKGROUND OF THE STUDY

Management needs a lot of tools to be able to administer effectively in the day to day running of the business. Management by objectives is one of such tools. It is a way of getting improved results in managerial method whereby the superior and the subordinate managers in an organization identifies major areas of responsibility, in which they will work. Set some standards for good or bad performance and the measurement of results against those standards (Derek 2005: 156). Management by objectives is also called managing by objectives. However, there have been certain individuals who have long placed emphasis on management by objectives and by so doing have management by objectives refers to a structured management technique of setting goals, for any organizational unit. Odiorne (2015:1) defines MBO as a system of management whereby the superior and subordinate jointly identify objectives, define individual major areas of responsibility in terms of results expected, and use these objectives and expected results as guides for operating the unit and assessing the contribution of each of its member. Besides, Odiorne points out that management by objectives is a “system of management” an overall framework used to guide the organizational unit and outline its direction. He went further to point out that “the superior and subordinate jointly identify objectives”. In other words, it is a participative management procedure that requires commitment and co-operation. The definition deals with identifying the “results” that are expected. Thus management by objectives concentrates on the output of the organization evaluating people by assessing their contribution to this output. Management by objectives is a strategy where in the management sets specific goals for the employees to accomplish within fixed time period. Management by objective is a dynamic system which seeks to integrate the company a need to clarify and achieve its profit and growth goals with the managers need to contribute and develop himself. It is a demanding and rewarding style of managing a business.

Management by objectives can work in any size of organization if the procedures are understand and managers are patient in letting the system set in first. Management by objective is a effective planning, control and development system. Management by objectives was define by Koontz and O’Donnell (1968: 485) as a technique of system or method of management whereby the superior and subordinate managers of an organization agreed on its broad goal , translate these goal into a chain of specific short term goals, defined each individuals major areas of responsibility in terms of result expected continually reviewed the accomplishment as the sole basis of assessing and rewarding them. Management by objectives gives the employee the opportunity to participate in decision making, the limits within these limits. It assumes that the employees has been properly selected and trained, and is informed that the employee will be responsible for achieving the desired results in the organization. Organizations are ubiquitous. According to Mullins (2005), organizations are designed by people to overcome individual limitations and achieve individually. Hence, organization becomes a means of survival for the people and exerts an important daily influence on the life of the people and the way they live. The major decider for the survival of any organization is the presence of capable men and women with the right technique to combine the organization resources (Man, Machine, materials and Money) to achieve organization goals. It is appropriate to note that management of companies in Nigeria lack sufficient techniques to make them manage effectively. Some of these tools are not used and when used, they are not properly utilized. Management by objective is not only a managerial strategy to achieve a well coordinated managerial goals, but it is also a popular management techniques that cut across for pervade all human activities namely business areas, educational, government, health care and non-profit organization. Most of the techniques, system, tools of management are hardly understood resulting in losses and damages to the organization. Besides it is the wrong use of techniques and unwillingness of top management to utilize the right tool to solve the management problems. It is on these tends that the researcher intends to find out the prospect and problems of management by objective as an instrument for organizational performance in Nigeria. In order to investigate some of the above problems, one of the leading financial institutions in the country, First Bank of Nigeria Plc. Okpara Avenue Enugu Main has been chosen.

1.2STATEMENT OF THE PROBLEM

It is pertinent to note that management of companies in Nigeria lack sufficient technique to make them manage well. Some of these tools are not used and when used they are not properly utilized e.g. management by objectives. Management by objective if not only a managerial strategy to achieve a well co-ordinate management performance, but it is also a popular management technique that exit across or pervade all human activities namely: business areas, educational, government, health care and non profit organization. Unfortunately many of the organizations are yet to adopt this technique in earlisting commitment and support of their staff. Those who do, often pay lip services only to the MBO technique. Thus excluding staff in standard/goal setting that involve them. Control and achievement of goals in cases like this suffer.

1.3     OBJECTIVES OF THE STUDY

The broad objective of the study is to find out the prospects and problems of management by objectives as an instrument for organizational performance in Nigeria. The specific objectives of the study include:

1. To determine problems affecting management by objective as an instrument for organizational performance.
2. To find out the level of participation of both managers and employees in the setting of goals to be achieved in the organization. 3.To determine whether employees are given appropriate authority and

1.4     RESEARCH QUESTION

In pursuit of the research objective of the study, the following research questions have been formulated.

1. What are the problems militating against the use of management by objectives as instrument for organizational performance?
2. To what extent do both managers and employees participate in the setting of goals to be achieved in the organization?
3. To what extent are employees given appropriate authority and responsibilities for effective management by objectives?

1.6 NEEDS AND SIGNIFICANCE OF THE STUDY

The Researcher: It will enable the researcher to fulfill the partial requirement for the award of the award of Master’s Degree in Management.

The Firm (First Bank of Nigeria Plc.): The firm will through this study see the need to involve the subordinates in setting objectives as it will elicit higher productivity, profitability growth, sustainability of the organization as well as customer and employee satisfaction.

The Future Researchers: The study will be useful to those who will carry out studies in related areas in future. It will serve as a reference material to them. Even, the findings can provide the bases for further studies.

1.7 SCOPE OF THE STUDY

This study focuses on the use of MBO as an instrument for organization performance. But the scope is restricted to the First Bank of Nigeria Plc. Enugu Main. The time scope covers from 2006 to 2011.

1.8 LIMITATIONS AND DELIMITATION OF THE STUDY

There are many factors that act as constraint to the effort of the researcher in the course of writing this project. Most prominent of the factors are:

Time: The research work is big task and as such requires time and energy, which was not on the researchers side.

Finance: This is another limiting factor. Due to limited financial resources available, the researcher cannot procure all the needed materials for this project. The cost of transportation to and for First Bank of Nigeria Plc Okpara Avenue is very high for the researcher.

Dearth of Research Materials: Nigerians dislike activities that tend to probe them. They tend to avoid researcher because they feel their activities that are not meant for public consumption would be exposed through research work.

1.9 DEFINITION OF RELEVANT CONCEPTS

MBO: Management by Objectives

WAEC: West African Examination Council

SSCE: Senior Secondary Certificate Examination

OND: Ordinary National Diploma

B.Sc: Bachelor of Science

PLC: Public Limited Company

FBN: First Bank of Nigeria

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Full Project – The concept of management by objectives (MBO)