Page 68 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 3: Planning and Decision-making

foster an attitude, that any action is acceptable as long as it helps to achieve the goals. Notes
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’.

Caselet 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.
The reason for the excellence of Microsoft goes to the leadership of Mr. Bill Gates and his
policies in which he propagates MBO:
1. Eliminate politics, by giving everybody the same message.
2. Keep a flat organisation in which all issues are discussed openly.
3. Insist on clear and direct communication.
4. Prevent competing missions or objectives.

5. Eliminate rivalry between different parts of the organisation.
6. Empower teams to do their own things.
Source: Parag Diwan, Management Principles and Practices, Excel Books.

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