Management by Objectives

(MBO) Dr. Bagus Nurcahyo Program Studi Manajemen Pemasaran Direktorat Program D3 Bisnis & Kewirausahaan BnR-Peng.Manajemen-Chap-08 1

Management by Objectives

(MBO) • Managers AND employees define objectives for every department, project, and person and use them to monitor subsequent performance • Divide problem into manageable, “bite-size” chunks BnR-Peng.Manajemen-Chap-08 2

Essential Steps for MBO

• Set Goals (The most difficult step) – What are we trying to accomplish?

• Develop Action Plans – “What do we need to do to get there?” – Groups and individuals • Review Progress – “How are we doing?” – Periodically (How Often?) – Does plan need to be tweaked?

• Appraise Performance – Rewards?

BnR-Peng.Manajemen-Chap-08 3

Other Types of Plans

• Single-use plans - developed to achieve objectives that are not likely to be repeated – Can be BOTH programs and projects • Standing plans - used to provide guidance for tasks performed repeatedly – Primary standing plans are organizational policies, rules, and procedures • Contingency Plans – used to deal with dynamic situations or various scenarios BnR-Peng.Manajemen-Chap-08 4

The New Planning Paradigm

• Set stretch goals: Highly ambitious goals that are clear, compelling, and imaginative.

• Create an environment that encourages learning.

• Design new rules for planning staff.

• Make continuous improvement a way of life.

• Planning still starts and stops at the top.

BnR-Peng.Manajemen-Chap-08 5

Responsibility

• Obligation to complete a task – Assigned, assumed, or conferred • Exists individually and at all levels of an organization • Responsibility CAN be delegated but CANNOT be transferred BnR-Peng.Manajemen-Chap-08 6

Authority

• Right to use assigned resources, including personnel, to accomplish a task or objective – Right to issue orders and expect obedience – Power or control to act on responsibility • CAN and should be delegated • Sources: – Positional and/or Personal Power BnR-Peng.Manajemen-Chap-08 7

Accountability

• Being answerable for responsibilities – Actions OR Failure to act • Linked to responsibility – Results NOT “intentions” – Emphasizes necessity to consider all possible consequences • CAN NEVER be delegated BnR-Peng.Manajemen-Chap-08 8

Potential Advantages

• Improved Decision Quality • Enhanced subordinate commitment • Time management • Job enrichment • Development of subordinates – Creates learning opportunities – ID potential leaders BnR-Peng.Manajemen-Chap-08 9

What to Delegate

• Tasks better done by subordinate • Urgent, not high priority tasks • Tasks relevant to a subordinate’s career • Tasks of appropriate difficulty • Both pleasant and unpleasant tasks • Tasks not central to the manager’s role BnR-Peng.Manajemen-Chap-08 10

Types of Change

• Operational Change – Efforts to improve basic work and organizational processes • Improve Efficiency • Improve Quality • Transformational Change – Redesign/renew the entire organization • Different product • Complete remaking of organization BnR-Peng.Manajemen-Chap-08 11

Organizational Change • Adoption of a new idea or behavior • To survive/prosper organizations must continuously adapt • Leaders must:

– Observe trends, patterns, and needs – Identify threats/opportunities, then – Use planned change to adapt

Change can be managed, but not necessarily controlled

BnR-Peng.Manajemen-Chap-08 12

Types of Change

• Operational Change – Efforts to improve basic work and organizational processes • Improve Efficiency • Improve Quality • Transformational Change – Redesign/renew the entire organization • Different product • Complete remaking of organization BnR-Peng.Manajemen-Chap-08 13

“Learning Organization”

Everyone engaged in problem solving and continuous improvement

• Leadership provides vision/strategy • Positive environment • Good Communication flow (Share Info) • Everyone involved (Empowerment) • Redefine Culture: – Rethink roles, processes and values – Break old paradigms BnR-Peng.Manajemen-Chap-08 14

Forces for Change

External Internal

Customers Management decisions Competitors Employees Technology Economic Production Inefficiencies International Arena BnR-Peng.Manajemen-Chap-08 15

Idea Champions

• Sees need for, and champions, change within the organization • Change does not occur by itself • Four roles in organizational change: – Inventor – Champion – Sponsor – Critic BnR-Peng.Manajemen-Chap-08 16

Resistance to Change

• • • • • Self-interest • Perceived personal impact (Loss of something of value) • Loss of power/prestige/benefits Lack of understanding and trust • Do not understand change or intentions behind it Uncertainty • Lack information; Fear of unknown • Change brings discomfort and dislocation Different assessments and goals • • Employees assess proposed change differently Indictment of current performance?

Unmotivated employee?

BnR-Peng.Manajemen-Chap-08 17

Implementation Tactics

to overcome resistance • Communication/Education – Information needed by those resisting change • Participation – Involve resistors in designing change – Helps identify potential problems and differences in perceptions among employees • Negotiation - win acceptance with formal bargaining • Coercion - resistors accept or suffer consequence. Only use when rapid response is urgent.

• Top Management Support – Support symbolizes importance – Without support, change unlikely BnR-Peng.Manajemen-Chap-08 18

Leadership Differences Transactional leaders:

– Excel at management functions – Are hardworking – Are tolerant – Are fair minded.

– Stress plans, schedules and budgets BnR-Peng.Manajemen-Chap-08 19

Leadership Differences Charismatic Leaders:

• • • Inspire/motivate people to do more, despite obstacles and personal sacrifice.

State a vision of an imagined future with which employees identify.

Shape a corporate value system for which everyone stands.

BnR-Peng.Manajemen-Chap-08 20

Leadership Differences

Transformational Leaders: – Bring about innovation and create significant change in followers and organization.

– Lead changes in the organization's mission, structure, and human resource management.

– Focus on intangible qualities Vision, shared values, ideas to build relationships – Provide common ground to enlist followers in changes.

BnR-Peng.Manajemen-Chap-08 21

Network Centric Warfare

• Speed of Command – Information superiority – Understand vice data – Forces act with speed, precision, and reach – Results rapidly foreclose enemy options, synergistic effects dominate • Enables neutralization of enemy forces at outset of hostilities. Changes his strategy completely.Lock in our success, lockm out his alternatives.

• Self synchronization denies the enemy operational pause. Maintains awareness.

BnR-Peng.Manajemen-Chap-08 22

Transactional Leadership

• Exchanged-based relationship in which leader and followers get some (or all) of their needs met – Reward for good performance – Discipline for poor performance • Dependent on leader’s control of rewards and penalties • Transitory: – Effective as long as mutually beneficial – or leader present… BnR-Peng.Manajemen-Chap-08 23

Transactional Leadership

• Works well in stable organizations – Does military qualify?

• Generally easier to use.

Why?

• Transactional Leaders: – Excel at management functions – Stress plans, schedules and budgets • Explain what is required/what will be received if requirements met – Initiate structure/Arms length dealings • Goal = Change of behavior BnR-Peng.Manajemen-Chap-08 24

Transformational Leadership

• Leader has powerful vision of what organization

could

be – Broadens employee interests to look past self-interest for the good of the group – Raises standards/Challenges the status quo – Generates awareness and acceptance • Cultivates strong bonds with followers – Bonds develop over time • Goal = change of attitudes BnR-Peng.Manajemen-Chap-08 25

Transformational Leadership

• Charisma (Draw to the leader) – Vision, sense of purpose, larger meaning – Instill pride/Sense of being elite – Gain respect and trust • Inspiration (Impact on followers) – Communicates high expectations – Uses symbols to focus efforts – Walks the walk: • Takes calculated risks • Proves belief in vision by actions BnR-Peng.Manajemen-Chap-08 26