EFFECT OF MANAGEMENT BY OBJECTIVE (MBO) ON ORGANIZATIONAL PERFORMANCE

EFFECT OF MANAGEMENT BY OBJECTIVE (MBO) ON ORGANIZATIONAL PERFORMANCE

(A Case Study of United Bank for Africa, Nasarawa Branch)

ABSTRACT

The main aim of this study is to examine the effect of Management by Objectives (MBO) on the  performance of United Bank for Africa, Nasarawa Branch. Management by Objectives 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). The major problem of this study is 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 objectives is not only a managerial strategy to achieve a well co-ordinated managerial goals, but it is also a popular management techniques that cut across all human activities namely business areas, education, government, health care and non-profit organization. The major findings of the study were: MBO helps to obtain total commitment of all employees to work together in order to achieve a common goal; that good and prompt salary, promotion as when due, good relationship with management and recognition of achievement improves performance of the workers and by so doing enhances organizational performance when management by objectives is been adopted. The study recommended that managers should consult his subordinates in drawing up unit objectives which goes up the hierarchy from where it is modified, collected, approved and distributed throughout the organisation.

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. Nwokoye (2018) defines MBO as a system of management whereby the superior and subordinate jointly identify objectives, 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.

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 an effective planning, control and development system.

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 effect of management by objective on the performance of United Bank for Africa, Nasarawa Branch.

1.2       Statement 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, unfortunately many of the organizations are yet to adopt this technique in enlisting commitment and support of their 6 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.       Objectives Of The Study

The broad objective of the study is to examine the impact of management by objectives on the performance of United Bank for Africa, Nasarawa Branch. 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.       Scope Of The Study

This study focuses on the effect of Management by Objective on the Performance of an organization. But the scope is restricted to the United Bank for Africa, Nasarawa Brach. The time scope covers from 2010 to 2020

1.5       Significance Of The Study

The Firm (United Bank for Africa): 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.

The Future Researchers: The study will be useful to those who will carry out studies in related areas in future. It will serve as a reference material to them. Even, the findings can provide the bases for further studies.