Effect Of Management By Objectives On Organization Performance

Project and Seminar Material for Business Administration and Management BAM

Effect Of Management By Objectives On Organization Performance


As against conservative nature of some organization managers prior to the introduction of MBO organization had become more flexible and fill with risk as they now engage in imprudent and unprofessional activities in other to execute there formulated goals. These activities led to kluge losses, distress syndrome, low morale, conflict, poor communication and lack of control leading to eventual collapse of the organization.

Without doubt, the importance of MBO as an effective strategy for achieving organization goals cannot be overemphasized. What is more important is the attitude of managements in following the (aid down procedure of an effective and efficient principles of MBO so as to maintain a sound organization system. It had been !toted that one of the major phenomenon distress is poor labour management relation. Which common among the distress organization.

Chapter One


1.1 Background to the Study

At the survival of any organization, there must be deliberate grand plan for achieving present and future goals and objectives, in which the organization must be strategic about, such actor, otherwise it would affect organization at large.

To formulate and implement organization objectives into a practical planning target that would not fail in respective of the organization.

BUDGETING could be adopted, but a more effective alternative system applicable would `MBO” management by objective, although to establish a system of MBO calls for a lot of efforts and participative approach to decision making by management and subordinate (MBO) is a process through which individuals in an organization works together to identify goals and objective and to coordinate these effort in attaining initially development in the 1950s, MBO has gone from being a fund in. the 1960s,and early 1970 to failing to into disrepute in many organization in the 1980s and 1990s, yet, as most research has indicated, it is the way in which MBO is usually implemented that created problems rather than the idea of MBO it self.

MBO was initially development as a synthesis of there process which are goal setting, participation in decision making, and objective feedback, in an MBO program, a supervision and attempt to accom consume on (1) the goals the subordinate will attempt accomplish alluring a specific period of time. (2) the means the subordinate A7ill use to reach these goals and (3) how progress toward the goals will be measured and evaluated. A key factor under lying this method is the degrees to which there is true participation MUTUAL INVOLVEMENT in determining objectives and means during the process.

PETER DRUNKER (1959) (MBO) management by object allows management to focus on achievable goals and to attain the best possible result from available resources.

It aims to increase organization performance by allying goals and subordinate objectives, throughout the organization. Ideally, employees get strong input to identify their objectives, time , lines for completion e.t.c. MBO include ongoing tracking and feedback in the process to reach objectives.

Management by objective is not a new techniques it was introduction as a supplementary management tools by ALFRED SLOAN in the early 1950s, however, PETER DRUNKER is credited in his classic management drunker is credited with being the father of MBO, it was George Ordiore who popularized MBO with his statement of its six major premises.

Management by objective (MBO) focuses on the result not the activity they delegate task to subordinate Management is about salting yourself objectives and then break specific goals or key results.

It is true to say that the place of MBO has come to be being the keystone to the success and indeed, to every existence to the organization it is no over, statement to declare that what ever may be the future, the application of MBO will be an important tools. Indeed so significant is the important as MBO to the organization and nation that it cannot be over emphasized.

1.2 Purpose of Study

The purpose of this study is to examine and understand, the concept management by objectives (MBO) and its effectiveness in achieving organization predetermined goals and objectives, and more so to recommend the concept to every organization.

1.3 The Objectives of the Study

  1. To examine the general impact of MBO towards achieving organizational goals and objective.
  2. To study the main principle of management by objectives (MBO)
  3. To determine where management by objectives applicable in day running of the organization.
  4. To study management focus on MBO
  5. To examine factors that affect MBO and how to subdue it
  6. To recommend the concept to every management in achieving their objectives.

In conclusion, I hope to provide relevant theories and literatures, to the mature of collaborative processes in MBO programmers.

1.4 Significance of Study.

The relevance of the study is add to the previous and existing literature in this discourse.

Another significant is the understanding of the subject matter by the general public.

Through this project various management will recognized the need to systematically learn how to indicate goals and how to manage their subordinates, to the goals and objectives of the organization will be easy to achieve and attained.

Furthermore, this study is an eye opener former to gain improvement, confidence and assurance in facing future challenges as it may come.

Finally, it is appropriate in situation where you which to build employee, management and self leadership skin and tap clavier creativity, tactic knowledge and initiative.

1.5 Statement of Problem

The statement of problem associated with the study, can be traced to significant environmental factors and events that shape the operation of the organization but for organization to survive and have competitive advantage over its competitors, this organization affects organizations policy, programmers, philosophy and practice, which may lead subtle dissatisfaction, poor performance, resistance, conflict role ambiguity and ill relationship among superiors and surbohinder the attainment of organization delegated grand plans for achieving present and future goals and objectives.

1.6 Scopes and Limitation

This study will be limited in scope to the element within the sample of VITAMALT NIGERIA PLC, particularly to the staffs both at upper and lower echelon.

Furthermore, another extraneous factors limitation to this study would be.

  1. Time Factor
  2. Respondent Behavior And Attitude
  3. Financial Implications
  4. Personnel To Execute Study
  5. General State Of Nature

Finally the scope of the study is restricted to Lagos branch Agara where sample size will be drawn.

1.7 Statement of Hypotheses

Hypothesis would be tested for the purpose of the study, which are as follows

Hypothesis 1
  • Ho: There is non correlation between managements goals.
  • Hi: There is correlation between managements goals and subordinate goals.
Hypothesis 2
  • Ho: Failure to achieve organizations objectives is not caused by poor management
  • HI: Failure to achieve organization objective is caused by poor management

1.8 Definition of Terms

Below are the definition of some terms used in the items


It refers to getting things (activities) done through with people by planning, organization, coordinating, directing and controlling.


This an end goal toward which all activities should be aimed.


A term that deals with organization goals and objectives it could be long terms or future terms. Deliberately planned or emergent.

Job Satisfaction:

This is the degree to which individuals feel position or negatively about their jobs.


It is used to refers to the physical and social context with in which any target system is functioning, be it a persons group or organization.


Technical term from system theory used primarily, to describe one persons report to another of the on the reporter.


Targets there is a measure of the resources should be vitalized (e.g.) output per man hour est.


An organization can be described as a planned coordination of the activities of a number of people in the service of mutual harp for the achievement of a common goal through division of labour and function through hierarchy of authority and responsibility.

Chapter Five

Summary, Conclusions and Recommendations

5.1 Summary of the Findings

The broad objective of this study is to examine the effect of management by objectives on organization performance using Vita Malt Lagos State. The study further determine where management by objectives applicable in day running of the organization and examine factors that affect MBO and how to subdue it.

The research adopted the survey descriptive design and with the aid of convenience sampling method, the researcher conveniently selected eighty (80) participant who are management and staff Vita Malt Lagos State as respondent of the study. Self- structured questionnaire was issued to the respondent of which seventy-seven (77) responses were retrieved and validated for the study. The study made use of of descriptive analysis and inferential statistic where data from field survey was analyzed using simple percentage. Hypotheses was tested using ANOVA statistical package for social science (SPSS v23).

5.2 Conclusion

Clearly there is no magic bullet in achieving success. Business success is a consequence of embracing the whole package of strategies in order to succeed. Selling a variety of products or offering a variety of services is just as important as embracing prudent financial management systems. Small business enterprises mostly lack managerial skills and hardly offer training and development to their employees. Management needs a lot of tools to use in order to run an organization effectively. Such tools that have been in use include; strategic planning, customer relationship management, employee engagement survey, benchmarking and balanced score card. These tools to an extent, have proved to be a little bit effective but not in a whole sense. This is due to the dynamism of today’s organizations and the employees working in such organizations. Management By Objective (MBO) is a modern tool of management that seeks to address the evolving issues in organizations as far as the achievement of set objectives is concerned.

Findings of the study conclude that

  1. The operations of management by objectives requires that each manager of a unit draws up his department objectives with his subordinates in line with the centrally stipulated corporate objectives and missions.
  2. The objectives set in the process of management by objectives help provide a yardstick for appraisal, compensation and control as well as serve as a measure or guide for operating the unit and assessing the contribution of each of its members.
  3. Well defined, realistic goals affect the performance of the employee which in turn affect organization effectiveness.
  4. Organizations that adopt management by objectives usually achieve its set objectives.
  5. The practice of management by objectives facilitate the emulation of team spirit and work in an organization. The benefits of team spirit in modern day management cannot be over-emphasized. It helps groups overcome individual collective goals and slums selfish or sectional interests.

5.3 Recommendations

The following recommendations are therefore put forward in this seminar paper based on the literature reviewed:

  1. Managers should consult their subordinates as well as involve them in drawing up unit objectives, which goes up the hierarchy from where it is modified, collected, approved and distributed throughout the organization.
  2. Specific, Measurable, Acceptable, Realistic and Time-bound (SMART) goals should be set by organizations as this element is crucial in MBO and it brings about agreement on the objectives between the employees and the organization.
  3. There should be regular training and re-retraining of employees in order to achieve the corporate objectives.
  4. Managers should endeavor to build a true team and individuals efforts together. Their efforts must all pull in the same direction and their contribution must fit together to produce a whole without friction and without duplication of effort.
  5. Managers and employees should periodically meet in order to review progress towards the realization of objectives.
  6. There should be autonomy in implementation of plans once the objectives have been agreed upon the individual enjoys wide discretion in choosing the means for achieving the objectives without being directed by higher ranking manager.

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