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3. 1. Defining organizational objectives 2. Pinpointing areas in which organizational objectives should be established 3. Illustrating how managers work with organizational objectives 4. Discussing management by objectives - an approach to management based mainly on organizational objectives Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-3

4. It is a target toward which the open management system is directed. The organisations’ purpose is what the org. exist to do, given a particular group of customers and customer needs. If an org is accomplishing its objectives it is accomplishing its purpose and thereby justifying its reason for existence. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-4

5. Organizations exists for various purposes and thus have various types of objectives. A hospital; primary pupose of providing high quality medical services to the community. So its objectives are aimed at furnishing this assistance. In contrast business organisations primary pupose is tı make profit. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-5

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8. The goal of the organisation must be this-to make a better and better product to be sold at a lower and lower price. Profit cannot be the goal. Profit must be a by- product. This is a state of ming and philosphy. Actually org doing that will make a good profit which must be divided between user, worker, and stockholder. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-8

9. John F. Mee Org. Objectives can be summarised in 3 points: 1. Profit is the motivating force for managers, 2. Service to customers by the provision of desired economic values justifies the existence of the business 3. Mngrs have social responsibility in accordance with the ethical and moral codes of the society. High obj are frustrating, too low ones do not push employees to maximise their potentials. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-9

10. 1. Market Standing 2. Innovation 3. Productivity 4. Physical and Financial Resources 5. Profitability 6. Managerial Performance and Development 7. Worker Performance and Attitude 8. Public Responsibility Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-10

11. An organization should set three types of objectives: 1. Short-term objectives (1 yr or less) 2. Intermediate-term objectives (1-5 yr) 3. Long-term objectives (5-10 yrs) Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-11

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13. 1.Let those responsible for attaining objectives have a voice in setting them 2.State objectives as specifically as possible 3.Relate objectives to specific actions whenever necessary 4.Pinpoint expected results 5.Set goals high enough that employees have to strive to meet them, but not so high that employees give up trying to meet them 6.Specify when goals are expected to be achieved 7.Set objectives only in relation to other organizational objectives 8.State objectives clearly and simply Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-13

14. The MBO strategy has three basic parts: 1. All individuals are assigned a specialized set of objectives 2. Performance reviews are conducted periodically 3. Rewards are given to individuals The MBO process consists of five steps: 1. Review organizational objectives 2. Set worker objectives 3. Monitor progress 4. Evaluate performance 5. Give rewards Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-14

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16. 1. Top management must be committed to the MBO process and set appropriate objectives for the organization. 2. Managers and subordinates together must develop and agree on individual’s goals. 3. Employees performance should be conscientiously evaluated against established objectives. 4. Management must follow through on employees performance evaluations by rewarding employees accordingly. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-16

17. Advantages: 1) Continually emphasizes what should be done in an organization to achieve organizational goals 2) Secures employee commitment to attaining organizational goals Disadvantages: 1) Development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work 2) Increases the volume of paperwork in an organization Most managers find MBO programs beneficial Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-17

18. Final Responsibility As planners, chief executives seek answers to the following broad questions: 1. In what direction should the organization be going? 2. In what direction is the organization going now? 3. Should something be done to change this direction? 4. Is the organization continuing in an appropriate direction? Planning Assistance Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-18

19. Qualifications of Planners Primary should have four primary qualifications: 1) Considerable practical experience within their organization 2) Know how all parts of the organization function and interrelate 3) Defining trends and posses the expertise determine how the organization should react to those trends 4) Able to work well with others Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-19

20. Evaluation of Planners – Objective Indicators Guidelines for evaluating the planners’ performance: 1.Organizational plan is in writing 2.Plan is the result of all elements of management team working together 3.Plan defines present and possible future business of the organization 4.Plan specifically mentions organizational objectives 5.Plan identifies future opportunities and suggests how to take advantage of them 6.Plan emphasizes both internal and external environments 7.Plan describes the attainment of objectives in operational terms whenever possible 8.Plan includes both long- and short-term recommendations Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 7-20

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22. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall