EFFECT OF MANAGEMENT BY OBJECTIVES ON ORGANIZATION PERFORMANCE (A CASE STUDY OF VITAMALT PLC)

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CHAPTER ONE

INTRODUCTION

1.1         BACKGROUND OF THE STUDY

 Management needs a lot of tools to be able to administer effectively in the day to day running of the business. Management by objectives is one of such tools. It is a way of getting improved results in managerial method whereby the superior and the subordinate managers in an organization identifies major areas of responsibility, in which they will work. Set some standards for good or bad performance and the measurement of results against those standards (Derek 2005: 156). Management by objectives is also called managing by objectives. However, there have been certain individuals who have long placed emphasis on management by objectives and by so doing have management by objectives refers to a structured management technique of setting goals, for any organizational unit. Odiorne (1981:1) defines MBO as a system of management whereby the superior and subordinate jointly  identify objectives, define individual major areas of responsibility in terms of results expected, and use these objectives and expected results as guides for operating the unit and assessing the contribution of each of its member. Besides, Odiorne points out that management by objectives is a "system of management" an overall framework used to guide the organizational unit and outline  its direction. He went further to point out that "the superior and subordinate jointly identify objectives". In other words, it is a participative management procedure that requires commitment and co-operation. The definition deals with identifying the "results" that are expected. Thus management by objectives concentrates on the output of the organization evaluating people by assessing their contribution to this output. Management by objectives is a strategy where in the management sets specific goals for the employees to accomplish within fixed time period. Management by objective is a dynamic system which seeks to integrate the company a need to clarify and achieve its profit and growth goals with the managers need to contribute and develop himself. It is a demanding and rewarding style of managing a business. Management by objectives can work in any size of organization if the procedures are understand and managers are patient in letting the system set in first. Management by objective is a effective planning, control and development system.  Management by objectives was define by Koontz and O'Donnell (1968: 485) as a technique of system or method of management whereby the superior and subordinate managers of an organization agreed on its broad goal , translate these goal into a chain of specific short term goals, defined each individuals major areas of responsibility in terms of result expected continually reviewed the accomplishment as the sole basis of assessing and rewarding them.