Management By Objectives

This ppt contain detail study on MBO. All the important topics are covered under this ppt.

1. Department of Management & Commerce MBA 2020-22 PRESENTATION ON B y : - T a j a l l i Hera

2. MBO – Introduction Peter Drucker in 1954. Concept of planning A ccomplishment of objectives through participation of all concerned persons P articipative and democratic style of management

3.  Management by Objectives Concept The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization .

4.  Management by Objectives Concept Management by objectives (MBO), also known as management by results (MBR), is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. It is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. The concept of MBO is closely connected with the concept of planning.

5. Process of MBO 1.Determining Organizational Goals 2. Determining Employees Objectives 6.The Performance Appraisal 5. Providing Feedback 3. Matching Resources with Objectives 4. Performance Evaluation

6. Benefits of MBO It emphasizes developmental human resources. and utilization of It identifies the problems of management, including structure, strategies and practice. It focuses attention and effort on priority areas. Planning becomes more precise and useful. It makes objectives explicit and directs work activity towards their achievement. It provides clear standards of control and facilitates self control.

7. Benefits of MBO It sharpens accountability. It highlights organization. interdependence within the organization. MBO provides a vehicle for delegation of authority. It stimulates organizational change enabling the top management to initiate plan, direct and control the direction and speed of change by providing guidelines for planned change. It provides clarity in organization action.

8. Benefits of MBO It provides greatest opportunity for personnel satisfaction by adopting participatory approach. It establishes good interpersonal relationship between management and employees. It increases efficiency of management and the organization as a whole as the decisions are taken both by superiors and subordinates. It helps in coordinating the activities of different units and departments.

9. Limitations of MBO Difficulty in objective setting. It is a time consuming process especially in the initial stages. Lack of cooperation between superiors and subordinates can be there due to differences in their opinions during setting objectives. It represents the danger of inflexibility in the organization. MBO can be in failure, if competent and trained managers are not available. It is one of the greatest managerial illusions because it fails to take adequately into account the deeper emotional components of emotions.

10. MBO in Indian Organizations MBO was introduced in India in the early seventies. By now more than fifty companies of different sizes and backgrounds, and belonging to different industries have experimented with MBO not all have been successful, but the number of successes is larger than those of failures.  Companies which have successfully implemented MBO are Bharat Heavy Electricals Limited, Grindlays Bank, Blue Star, Shaw Wallace, and GlaxoLimited .

11. MBO in Indian Organizations MBO has been successfully implemented in state government organizations such as the Tamil Nadu Dairy Development Corporation, Department of Stationery and Printing and Directorate of Industries and Commerce amongst others. Besides Tamil Nadu, Gujarat is the other state which has enthusiastically adopted MBO.

12. Common Reasons for the Failure of MBO Lack of top management support and commitment Lack of or inadequate planning and preparation Lack of information and education Very short time horizon Overemphasis on appraisal Poor understanding of the role of M BO and Lack of clear-cut policy towards MBO By avoiding the above-mentioned pitfalls, you can ensure that MBO will be successfully implemented.

13. GlaxoSmithKline   GlaxoSmithKline plc  (GSK) is a British multinational pharmaceutical company headquartered in London, England. Established in 2000 by a merger of Glaxo Wellcome and SmithKline Beecham, GSK was the world's sixth largest pharmaceutical company according to Forbes as of 2019

14. GlaxoSmithKline   The company developed the first malaria vaccine, RTS,S which it said in 2014 it would make available for five percent above cost. Legacy products developed at GSK include several listed in the World Health Organization’s List of Essential Medicines, Such as amoxicillin, mercaptopurine , pyrimethamline and zidovudine .

15. MBO Implementation in Glaxo Glaxo Laboratories (India) Ltd. a pharmaceutical company experiences the problem because of government policy towards multinationals, inflationary pressures and internal organizational problems. In 1973, the decision was taken to practice MBO with the identification of corporate objectives and key result areas. The company adopted the group approach to set objectives and 48 workgroups were identified but later reduced to 37.

16. MBO Implementation in Glaxo The objective setting process involved the following steps The corporate group issued guidelines to the divisions for expected results. The division indicates its capabilities as also the requirement for additional resources. Corporate objectives are established. Decisional objectives are finalized. Company’s budget was compiled. Departmental objectives are established. Result guides for a manager are established for three years. Renewal takes place every year.

17. MBO Implementation in Glaxo As the part of implementing MBO programme , the company’s structure was changed from functional to divisional basis and the three operating divisions were identified as pharmaceuticals, foods and chemicals. The initial process of MBO implementation was slow and encountered several problems. Though there was resistance to change as the time passed, resistance reduced.

18. MBO Implementation in Glaxo In 1976, review of company performance after the implementation of MBO program was made and the success was identified in following areas : The quality of contribution and division directors and their senior managers to the business discussion from which corporate and divisional plan is evolved. The actual setting of objectives with attainable stretch. The logic, balance, and quality of expression in these plans. The business result of the company also improved and there developed a positive attitude toward MBO.

19. IMPACTS ON GLAXO The above case study shows the importance of the MBO in running the business organization successfully and smoothly. The case study shows that the company’s M.D. had directors personal commitment was of a very high quality and therefore, the process succeeds