Page 104 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes 4. Goal-setting problems: MBO works effectively when important measurable objectives are
jointly agreed upon. It works less, when: (i) Verifiable goals are difficult to set. (ii) Goals
tend to take precedence over the people who use it. MBO focuses on end results and it may
foster an attitude, that any action is acceptable as long as it helps to achieve the goals.
Consequently, unwise decisions are made that would ultimately harm the organisation.
(iii) Goals are inflexible and rigid. (iv) There is overemphasis on quantifiable and easily
measurable results instead of important results. Many important qualitative goals like
job satisfaction, employee attitudes are lost sight of (attempts to set measurable goals
force managers to search for a magic figure for each area). (v) Overemphasis on short-term
goals at the expense of long-term goals. Attempts to show results force managers to
curtail costs, in areas where a long-term perspective would be more fruitful to the
organisation.
5. Organisational problems: MBO is not a palliative for all organisational ills. It is not for
everybody. MBO creates more problems than it solves when:
(a) There might be a failure to teach the philosophy to all participants. Too often MBO
is introduced across the organisation with little explanation, training or help.
(b) There might be failure to limit objectives. Too many objectives obscure priorities
and create a sense of fear and panic among subordinates.

(c) It is inconsistent with management philosophies. Under MBO programmes, managers
are forced to take a 180° turn from their present ways of thinking and acting. Instead
of planning and deciding things for others, they are advised to invite subordinates
and plan for work in an atmosphere of participation, much to their dislike.
(d) The programme is used as a ‘whip’ to control employee performance.

(e) It leads to a tug-of-war in which the subordinate tries to set the lowest possible
target and superior the highest.
(f) The seniors might turn MBO into a sham and start ‘playing games’.

(g) Lack of committment and support of top management.

Task Find out some practical examples of MBO in action.

Case Study MBO in Action at Microsoft

icrosoft Corporation was founded to develop and sell BASIC interpreters for
the Altair 8800. But due to its unique system of management, the company rose
Mto dominate the home computer operating system market with MS-DOS in the
mid-1980s, followed by the Windows line of operating systems. It's quite well known that
its products have all achieved near-ubiquity in the desktop computer market.
Throughout its history, Microsoft has been the target of criticism, including monopolistic
business practices and anti-competitive strategies. But it has always been the most sought
after employer among the best talent in the industry.

Contd...

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