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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 bjectives, 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.

Management by objectives gives the employee the opportunity to participate in decision making, the limits within these limits. It assumes that the employees has been properly selected and trained, and is informed that the employee will be responsible for achieving the desired results in the organization.

Organizations are ubiquitous. According to Mullins (2005:

256), organizations are designed by people to

overcome individual limitations and achieve individually.  Hence, organization becomes a means of survival for the people and exerts an important daily influence on the life of the people and the way they live. The major decider for the survival of any organization is the presence of capable men and women with the right technique to combine the organization resources (Man, Machine, materials and Money) to achieve organization goals.

It is appropriate to note that management of companies in Nigeria lack sufficient techniques to make them manage effectively.  Some of these tools are not used and when used, they are not properly utilized. Management by objective is not only a managerial strategy to achieve a well coordinated managerial goals, but it is also a popular management techniques that cut across for pervade all human activities namely business areas, educational, government, health care and non-profit organization.

Most of the techniques, system, tools of management are hardly understood resulting in losses and damages to the organization. Besides it is the wrong use of techniques and  unwillingness of top management to utilize the right tool to solve the management problems.

It is on these tends that the researcher intends to find out the prospect and problems of management by objective as an instrument for organizational performance in Nigeria.  In order to investigate some of the above problems, one of the leading financial institutions in the country, First Bank of Nigeria Plc.

Okpara Avenue Enugu Main has been chosen.

 

1.2STATEMENT OF THE PROBLEM

It is pertinent to note that management of companies in Nigeria lack sufficient technique to make them manage well. Some of these tools are not used and when used they are not properly utilized e.g. management by objectives. Management by objective if not only a managerial strategy to achieve a well co-ordinate management performance, but it is also a popular management technique that exit across or pervade all human activities namely: business areas, educational, government, health care and non profit organization.

Unfortunately many of the organizations are yet to adopt this technique in earlisting commitment and support of their

staff. Those who do, often pay lip services only to the MBO technique. Thus excluding staff in standard/goal setting that involve them. Control and achievement of goals in cases like this suffer.

 

1.3OBJECTIVES  OF THE STUDY

The broad objective of the study is to find out the prospects and problems of management by objectives as an instrument for organizational performance in Nigeria.

The specific objectives of the study include:

1.To determine problems affecting management by objective as an instrument for organizational performance.

2.To find out the level of participation of both managers and employees in the setting of goals to be achieved in the organization.

3.To determine whether employees are given appropriate authority and responsibility for achieving the set objectives.

1.4RESEARCH QUESTION

In pursuit of the research objective of the study, the following research questions have been formulated.

1.What are the problems militating against the use of management by objectives as instrument for organizational performance?

2.To what extent do both managers and employees participate in the setting of goals to be achieved in the organization?

3.To what extent are employees given appropriate authority and responsibilities for effective management by objectives?

 

1.5HYPOTHESES

The following hypothesis will guide the study:

1. H_oManagers and employees do not participate in the setting of goals to be achieved in the organization to increase performance.

H₁Managers and employees participate in the setting of goals to be achieved in the organization to increase performance.

2. H_oNon-commitment of top managers are not one of the problems militating against the use of Management by Objectives as an instrument for organizational performance.

H₁Non-commitment of top managers is one of the problems militating against the use of management by objectives as an instrument for organizational performance.

3. H_oEmployees are not given appropriate authority and responsibility for achieving the set objectives.

H₁Employees are given appropriate authority and

responsibility for achieving the set objectives.

 

1.6   SIGNIFICANCE OF THE STUDY

!The Researcher: It will enable the researcher to fulfill the partial requirement for the award of the award of Master’s  Degree in Management.

!The Firm (First Bank of Nigeria Plc.): The firm will through this study see the need to involve the subordinates in setting objectives as it will elicit higher productivity, profitability growth, sustainability of the

organization as well as customer and employee satisfaction.