Management by objectives chapter 4

Question 1

Who proposed MBE (management by exception)

Answer 1

Frederick Winslow Taylor

Question 2

What is MBE? define

Answer 2

Management by Exception (MBE) is a “policy by which management devotes it’s time to investigating only those situations in which actual results differ significantly from planned results”.

Question 3

Why is MBE an important principle of organisational control?

Answer 3

The idea behind it is that management’s attention will be focused only on those areas in need of action. If the personnel are performing as expected, the manager will take no action.

MBE normally involves substantial delegation by the manager to his team.

Unimportant or insignificant cases are ignored to focus on more important issues so as not to be distracted.

Question 4

When does managers involve in MBE type management?

Answer 4

managers intervene only when their employees fail to meet their performance standards or when things go wrong.

Question 5

Significance or advantages of MBE

Answer 5

• Efficient time management: Proper and timely decision making and appropriate flow of action and employees’ activities.
• Focused attention on major problems: Better utilization of managers’ time by bringing to their attention only those conditions that appear to need managerial action.

*Staff motivation

• Easy identification of weak spots
  Trend analysis
• Help performance appraisal

*Improved communication

Question 6

Other names of Management by participation?

Answer 6

Workers participation in Management (WPM)

Labor Participation
Participative management
Employee Participation

Question 7

Who gets involved in management in WPM?

Answer 7

Stakeholders (basically employees)

Question 8

What are the employees/stakeholders encouraged to do?
Mainly employees.
In WPM

Answer 8

Participating in setting objectives.
Determining work schedule
Making suggestions.

Question 9

Process of participative management

Answer 9

TO EMPLOYEES
Information sharing (info on economic status of the company)

Training (Raising skill level of employees, better decisions (WPM))

Decision making (Involvement of employees in decision making e.g determining work schedules, deciding budgets or process)

Rewards (reward for suggesting ideas for better performance)

Question 10

Benefits of participative managements?

Answer 10

*Offers benefits

*Employees more receptive
(receptive to changes more contributions accordingly)

*Proper understanding of organisation
(better view of organisation they can prepare themselves (or train) for higher positions)

*Better creativity and innovation (organisation has a wider pool to select choices increases chances that a valid and unique choice to be selected)

Question 11

What is management by motivation?

Answer 11

It is the process through which managers encourage employees to be productive and effective.

Read the rest.

Motivation in management describes ways in which managers promote productivity in their employees.

Employees who are adequately motivated to perform will be more productive, more engaged and feel more invested in their work. When employees feel these things, it helps them, and thereby their managers, be more successful. It is a manager’s job to motivate employees to do their jobs well

Question 12

Methods of motivating employees?

Answer 12

Monetary incentives ; Providing reward in terms of rupees.

Non monetary incentives ; the incentives which cannot be measured in terms of money.

       * Job security 
       * Praise or recognition 
       * Promotion opportunities 
       * Suggestions scheme
       * Challenging jobs

Using spot awards. Its given to employees as soon as the praise worthy performance is observed.

Question 13

Difference between management by objectives and management by exception?

Answer 13

MBO MBE
1) Define both

2)Employee participation is low High

3)Employee participation in DECISION High
MAKING is low

4) Responsibility ambiguity: No since Ambiguous
Task are assigned accurately

5)Only executives make decisions Whole
organisation take
part in decision
making

Question 14

What is a pre requisite for most managerial functions?

Answer 14

Objectives.

Question 15

What is objectives? (by Mc. Farland)

Answer 15

Objectives are goals, aims or purposes that organisations wish to achieve over varying periods of time.

Question 16

What is a managerial objective?

Answer 16

Terry defines, “A managerial objective is the intended goal which prescribe definite scope and suggests direction to efforts of a manager”

Question 17

Features of objectives?

Answer 17

Every organization has its own objective

Question 18

What is MBO?

Answer 18

Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organisational and individual objectives –Koontz and Weihrich

Question 19

Features of MBO

Answer 19

MBO is not merely a technique but a philosophy to management

In this approach various objectives of the organisation and of individuals are collectively decided by superiors and subordinates.

Helpful to judge the performance of subordinates

It provides for a regular review of performance

Provide guidelines for appropriate system and procedures

Question 20

Process of MBO?

Answer 20

Setting objectives at the top: The first step in MBO is the definition of organizational objectives and purpose. Usually the objective setting starts at the top level of organization and moves downward to the lowest managerial levels. The setting objective include defining the purpose of organization, long range and short range organizational objectives, divisional or departmental objective an d individual manager‘s objectives.

Identification of Key Result Areas :Organizational objectves provide the basis for the identification of Key Result Areas(KRAs). KRAs are derived from their expectations of various stakeholders and they indicate the priorities for organizational performance such as profitability, market standing, innovation, productivity, social responsibility etc.

Setting subordinates‘ objectives :The achievement of organizational goals is only possible through individuals. So each individual manager must know in advance what he is expected to attain. Every manager in the managerial hierarchy is both superior and subordinate (except the managers at top and bottom level). The process of objective setting begins with superior‘s proposed recommendations for his subordinate‘s objectives. In turn, the subordinate state his own objectives as perceived by him. Thereafter the final objectives for the subordinates are set by the mutual negotiation between superiors and subordinates.

Matching resources with objectives: Resource availability is an important aspect of objective setting because it is the proper application of resources which ensures objective achievement. So there should be a matching between objectives and resources.

Appraisal: Appraisal tries to measure whether subordinate is achieving his objective or not. Appraisal is undertaken as an on-going process with a view to find out deficiency in the working and also to remove it promptly in order to attain the objectives of organization.

Recycling: Though appraisal is the last aspect of MBO process, it is used as an input for recycling objectives and other actions. Recycling process include setting of objectives at various levels, action planning on the basis of those objectives and performance review. Each of these three aspects gives base for others. This process goes on a continuous basis.

Question 21

Benefits of MBO

Answer 21

MBO helps in better managing the organizational resources and activities.

Since organizational objectives are defined very clearly in MBO, they help in relating the organization with its environment.

MBO provides greatest opportunity for personnel satisfaction because of their participation in objective setting and rational performance appraisal.

MBO stimulates organisational change and provides a frame work and guidelines for organizational change. It helps in devising effective control.

Question 22

Problems and limitations of MBO?

Answer 22

Manager‘s failure to teach MBO philosophy

Each organization is likely to encounter specific problems in MBO practice but some of the common problems are as follows

#MBO is a time consuming and costly process

#Problems in objective setting
More emphasis on short term objectives

#MBO creates frustration among managers In spite of th obstacles and problems in MBO, it continues to be a way of managing organization.

Question 23

Prerequisites of installing MBO program

Answer 23

Defining Purpose
Support from top management
Training for MBO programme
Participation
Feedback