Chapter 5 - Talks about OBJECTIVES - The emphasis in this chapter is on verifiable objectives which refer to the clear and verifiable objectives facilitate measurement of the surplus as well as the effectiveness and efficiency of managerial actions. Nature of Objectives Objectives state end results and overall objectives need to be supports by sub objective. It also varies depending on the type of organization and the horizon of the objectives whether it might be effective for a short period or to a longer period of time.

Hierarchy of Objectives Objectives are form in a hierarchical structure; meaning from the broadest field into the objective should be able to flow even to the lowest structure by branching down the objective. The focus is from broader significant objective to its substructures synchronizing both to be able to adapt to the necessity achieving a particular goals or objective

Process of Setting Objectives and the Organizational Hierarchy The board of directors and top level managers are very much involved in determining the purpose, the mission, and the overall objectives of the firm, as well as the more specific overall objectives in the key result areas. Middle Level managers, such as the vice president or manager of marketing or the production manager, are involved in the setting of key-result-area objectives, division objectives and department objectives. Lower level managers is setting objectives of departments and units as well as of their subordinates

Top Down approach The upper level managers determine the objectives for subordinates Proponents: suggest the total organization needs direction through corporate objectives provided by the CEO. Bottom Up approach Subordinates initiate the setting of objectives for their positions and present them to their superior. Proponents : that top management needs to have information from lower levels in the form objectives in addition subordinates are likely to be highly motivated by and committed to goals that they initiate.

Network of Objectives Both objectives and planning programs normally form a network of desired results and events. If goals are not interconnected and if they do not support one another, people very often pursue paths that may seem good for their own department but may detrimental to the company as a whole. Goals and plan didn’t come in linear approach where a problems and solution goes directly with each other. As a manager you must be able to look for a solution on a different field or hierarchy or going outside the box by taking research on the outside environment and by a network of Objectives are obtain where in Different problem and Different Solutions interlocking each other synergizing the creation of solutions and policy between the necessity of each other.

Evolving Concepts In Management By Objectives Management by Objectives – is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives. Emphasis On Performance Appraisal Douglas McGregor a major contributor to the behavioral sciences, criticizes traditional appraisal programs that focused on personality trait criteria for evaluating subordinates. He suggest a new approach based on Druckers concept of Management by objectives where in subordinates assume the responsibility of setting short term objectives for themselves and then they review those objectives but in the appropriate environment.

Emphasis on Short term Objectives and Motivation. There is a better performance when the subordinate is given a smaller scope and specific objectives. Inclusion of Long Range Planning in MBO Process Making a long range and more strategic plan base on the short term objectives that has been made that serve as its foundation. System Approach to MBO that should be integrated 1.) Organizational Structures 2.) Portfolio Management 3.) Management Development 4.) Career Development