- Context: the incident occurred in the local manufacturing company I was working with. The company tried to implement a management-by-objectives tool, and hoped that an MBO approach would let managers work with a future set of results and continually evaluate work in progress toward its attainment. The factory tried to apply an MBO system to the administration system.
- Actual incident: MBO was found to be a valuable means for improving and monitoring performance in many of the departments. Five departments were using MBO four years later. Managers and supervisors develop performance measures for their employees. To assist them, the mayor’s office provides handbooks which aid managers in developing objectives and performance measures and in analyzing performance reports. The project failed because the management team did not meet time limits. When all departments were ready to follow a new procedure, standards and measures had not been development and approved by the Board.
- Critical issues and significance: This situation led to low motivation and prostration among employees who took great pains and efforts developing the main part of the system. The following year, however, the emphasis shifted to how the factory could better evaluate program efficiency and as such, work measures were directed toward improving productivity, that is, increasing the amount of work done per hour. By the end of the next year, objectives were difficult to measure because of inadequate data.
- Concerns: MBO has failed because of mistakes in initial implementation. These reasons include: implementing the plan too quickly, having objectives not supported by well-developed plans, or creating excess paperwork with forms and procedures. Problems also include failure to obtain cooperation from staff by leaving out subordinates in setting objectives, omitting staff managers from the implementation process, or failing to reward performance for all management or performance problems (Mogenstern 65).
- Thinking and feeling: the main feelings were frustration and disappointment, anger and low motivation. The problems stem from emphasizing system procedure rather than the system’s results and viewing MBO as a cure-all. Prior to its implementation, the factory was concerned with line-item details of the budget, giving little attention to programs and their achievement.
- Demand: The manager decided an MBO plan would allow the company to define and measure its service delivery. The program structure, consisting of six basic service areas, was linked to the budget process. Statements of program objectives and quantifiable performance measures were prepared.
- Impact on Future: If a factory has not developed a reliable rating system, data collected is useless. Some departments, for instance, have since developed systems to measure service quality and training schedules. A department experiencing a performance variance will affect the operational performance of an entire organization. By assessing the total performance variance within each operational department, management will have to provide with an evaluation status for each function as well as their interrelations. This example shows that poor time management and lack of strict control over time can lead to failure of the total system and the organization (Morgenstern 92). Managers should be able to check their performance at a particular period in time against a long-range plan. Also, it is important to be aware of emerging conditions or sudden changes which may affect their specified goals. How well an organization performs is based on the effectiveness with which it employs its time management accomplishment of objectives.
Morgenstern, J. Time Management from the Inside Out: The Foolproof System for Taking Control of Your Schedule and Your Life. Holt Paperbacks; First Edition edition, 2000.