Understanding Management Objectives and Productivity Concepts

Posted on Dec 6, 2024 in Other subjects

Management Definition

It is a very particular process consisting of the activities of planning, organization, execution, and control, performed to determine and achieve the objectives identified by the use of human and other resources.

Objectives of Management

For there to be a sense of satisfaction, there should be a target that gives purpose to the effort. Additionally, the goal should have meaning and value. Thus, the definition of an objective is: “An administrative objective is a goal that is fixed, requires a defined scope, and suggests guidance for the efforts of a leader.” In this definition, there are four elements:

  • Meta
  • Scope
  • Definition of Action
  • Orientation

Seneca said, “If a man does not know to which port he is sailing, no wind is favorable.”

Productivity Concept

The concept of productivity can be defined as the ratio between the amount of goods and services produced and the amount of resources used.

In making the productivity assessment, it is used to evaluate the performance of workshops, machinery, work equipment, and employees.

Definition of Efficiency

Efficiency: Rational use of resources that are available for achieving a predetermined objective. The more efficient the process, the lower the amount of resources used, achieving better value and performance.

Defining Effectiveness

Word: Effectiveness
Definition: Effectiveness is the ability to achieve a desired or expected effect. However, efficiency is the ability to achieve the effect in question with the minimum possible resources. For example, killing a fly with a cannon is effective (or effective: hitting the target) but not very efficient (disproportionate resources are spent for the intended goal). Conversely, killing it with a fly swatter is both effective and efficient.

Characteristics of the APO

The APO (Management by Objectives) is a stress management technique through planning and administrative control based on the principle that, to achieve results, the organization needs to first define what business it is performing and where it is trying to reach. The APO is a process by which managers, principals, and subordinates in an organization identify common objectives, define areas of responsibility of each in terms of expected results, and use these objectives as guidelines for the operation of the company. The manager must know and understand what is expected of him in terms of company goals, and his superiors should know what contributions they can demand and expect from him, judging accordingly.

In fact, the APO is a system that integrates the dynamic needs of the company to achieve its profit and growth objectives with the need for managers to contribute to their own development. It is a challenging and balanced style of management in companies.

The APO has the following features:

  • Joint establishment of objectives between the executive and superior
  • Setting goals for each department or position
  • Interrelationship of the goals of the departments
  • Development of tactical plans and operational plans, with emphasis on measurement and control
  • Ongoing assessment, revision, and recycling of plans
  • Active steering
  • Continued support of staff during the early stages

Management by objectives involves a systematic technique of management. It places much emphasis on planning and control. This targeting system has structural and behavioral characteristics.

Structural Features

  • Executives set long and short-term purposes. The long-term objectives are generally set by senior leaders.
  • Objectives and goals are expressed as final results rather than tasks or activities.
  • Goals and objectives must be consistent and coordinated across respective levels and areas of the organization.

Behavioral Characteristics

  • Emphasis on the personal commitment of subordinates in relation to goals, meaning they prepare their own goals and are responsible for them.
  • Emphasis on self-analysis of performance and, consequently, self-evaluation in relation to the results achieved against preset targets.
  • Deviations from the relative performance goals lead to self-correction in performance and, if necessary, specific guidance from the superior.

Management by Objectives

This technique is a participatory planning and evaluation process. Through it, superiors and subordinates together define priority aspects, set objectives (results) to achieve in a given period, and quantitatively dimension the respective contributions (goals). It systematically tracks performance (control), proceeding to make necessary corrections.

Criteria for Targeting

The criteria for selecting targets should be set according to priorities and their contribution to the achievement of key business results. Some criteria are:

  • Identify activities that have the greatest impact on results.
  • The goal should be specific regarding the facts: what, how, and when. The expected results should be stated in measurable and clear terms.
  • Objectives should focus on work and not on individuals.
  • Details of each target should derive from the overall goals.
  • Use language that is understandable to managers.
  • Keep within the principles of management, focusing on vital business purposes and not spreading into secondary activities.
  • The objective should indicate the results achieved but should not limit freedom in choosing methods.
  • The goal should be challenging yet attainable, requiring special effort but not impossible.
  • The objective must be a sufficient task for the entire fiscal year of the company.
  • The purpose must have some connection to the company’s utility plan, which is often the ultimate goal.

Each area of activity within the company has a strong tendency to maximize objectives and results, so that the effort in one area generally overrides others, leading to sub-objectivization. Each maximized sub-goal can cause the company to become a centrifugal system of efforts, which tend to separate rather than converge. Ansoff emphasized that the ideal effort should not just be the sum of efforts but their multiplication: synergy. The synergy is the multiplier effect produced by combining resources, resulting in a greater effect than when they are used separately. Hence, the need for a comprehensive income system, as defined by divisions, departments, etc., where there is a convergence in the direction of objectives.

In summary, the APO has the following features:

  • Establishment of a set of objectives between the executive and his superior.
  • Establishment of objectives for each department or position.
  • Interrelation of departmental objectives.
  • Development of tactical plans and operational plans with emphasis on measurement and control.
  • Continuous evaluation, review, and recycling of plans.
  • Participation in active direction.
  • Intense support for staff during the initial period.

Cycle Management by Objective

Description: Management by objectives

Authors’ Critique of APO

Ten deadly sins for failing to implement APO, according to John W. Humble, are:

  • Not involving senior management.
  • Assuming that administration alone can target a supreme technique capable of solving problems.
  • Adopting the APO in an accelerated program.
  • Setting measurable objectives only.
  • Simplifying all procedures to the extreme.
  • Implementing the APO in isolated areas, without involving the company globally.
  • Delegating the entire APO project to lower-level personnel.
  • Focusing on individuals and ignoring group problems.
  • Inaugurating the system with a party and then letting it go unattended.
  • Ignoring the personal goals of managers, focusing only on business objectives.

Advantages and Disadvantages of APO

While the APO is currently an administrative approach widely used around the world, its effectiveness is sometimes questioned. Often criticized for its erroneous application, another reason is that the APO is used as a mechanical theory that focuses on selected aspects of the administrative process without integrating them into a system. To provide a more realistic view, we will outline the advantages and disadvantages of the APO:

Advantages

  • Improves administration.
  • Clarifies the organization.
  • Generates personal commitments.
  • Helps develop effective controls.