CHAPTER ONE

GENERAL INTRODUCTION

1.0    INTRODUCTION

Management by objective (MBO) goes beyond setting annual objectives for the organisation units to setting performance goals for individual employees. Peter Drucker First Proposed the Approach in his 1954 “the Practice of Management” Since that times, has spurred a great deal of discussions evaluations and researches and inspired many similar programes.

According to Odione (1965) management by objective is viewed in larger context than that of a mere appraisal procedure.

It regards appraised as only one operating within a large system of goal-oriented management. Objective states and /results and overall objectives needs to be supported by sub-objectives. Thus, objective form a hierarchy as well as a network.

More over, organisation and managers have multiple goals that are sometimes incompatible and may lead to conflicts within the organisation, within the group and eve to within individuals.

A manager may have to choose between short-term and long-term performance, and personnel interest may have to be sub-ordinated to organisation objectives (Hoontz, 1993:143).

Refers to a formal set of procedures that begins with goals setting and continues through performances receive managers and those they supervise act together to set common goals. Each person’s acts of responsibility defined in terms of measurable expected result or “objective” used by staff numbers in planning their work and by both staff members and their manager in monitoring progress (Stoner et al, 1996:300). Performance appraisals are conducted jointly on a continually basis, with provision for regular periodic reviews.

In the words of freedom et al (1996:300), the heart of MBO is the objectives which spell out the individual action needed to fulfill the units functional strategy and annual objective. Provides a way to integrate and focus the efforts of all organisation members on the goals of higher management and overall organisational strategy. Another key management by objective (MBO) is its insistence on the active involvement of managers and staff members at every organisational level. Druckers (1954:63), insisted that managers and staff members set their own objective or at the very least, be actively involved in the objective setting process, otherwise, people might refuse to implement “someone else” objectives.

Drucker also suggested that managers at every level helps set objective for those at higher than their own, in the belief that this would give them a better understanding of the broader strategy of the company and how their own specific objectives relate to  the over all picture.

Management by objective is now practiced around the world, yet despite its now applications, it is not always clear what is meant by management by objective (MBO) some still think of it as an appraisal tool, others see it as a motivational technique; still others consider management by objective (MBO) as planning and control device.

In other words, definitions are importance to height the evolution concepts first, however, management by objective (MBO) should be defined as a comprehensive management system that integrated many managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organisational and individual objectives (Welhrich, 1993:149) these views of management by objectives as a system of managing is not shared by all, some sill define management by objective in a very narrow limited way.

1.1    STATEMENT OF THE PROBLEM

Researcher, consultant and practitioners have long recognized the importance of individual goal setting. Early studies at the University of Maryland found that performance was higher when people had specific objective than when they were simply asked to do their best.

Furthermore, light levels of intentions were associated with higher levels of performance, the improper applications of management by objective principle of some organisations remains the burning issue of our time and demand urgent and resolute action, the general vagueness of objective in many public organisations is challenge for managers but there is evidence that is a challenge that can be met. However, lack of evaluate of set goals or objectives, lack of maintenance culture or style, inadequate motivational techniques, needed to carry workers along are some of the problems likely to hinder applications of management by objective principle of Akwa Ibom Transport Company Limited. This study therefore recognize the following as its problem:

• Has the organisation of this policy measures addressed itself to the application of management by objective principle.
• How are these policies measure performance goals for individual employees.
• At what level have these policies measure been provided to ensure adequate motivation of employees?
• What are the ways by which sub-ordinates can assume the responsibility of setting short-term objective for themselves?
• What are the likely options and recommendation the organisation should recognize as its short-coming and may now include long range strategy planning in management by objective (MBO) program.

1.2   OBJECTIVE OF THE STUDY

The major objective of the study is directed toward having a better understanding the effect of the application of management objective in an organisation, in specific term, this study is aimed at:

1. To examine the effect of management by objective in an organisation.
2. To identify the benefit derived from the application of management by objective in an organisation
3. To see if management by objective can help to improve or change workers work habit.

1.3    SIGNIFICANCE OF THE STUDY

The rationale for conducting this study is to convey the usefulness of an application of management by objective of day-to-day affairs by the organisation.

Nevertheless, apart from the management by Akwa Ibom Transport Company Limited the study might be useful to other institution management consultant firms, business including past, present and future planning and performance evaluation thereafter.