Free «Report on the Problems of Management by Objectives Process» Essay Sample

Report on the Problems of Management by Objectives Process


Most companies that wish to undergo the change process through management by objectives innovation must foresee some of the problems that may hinder the transformation process. This report describes some of the problems that GmbH company is likely to face and recommends possible solutions that the company may adopt when implementing this approach. The basic problems include problem of adopting to change, lack of adequate interpersonal skills, and problems of evaluating workers’ performance among others. Thereby, there are problems that emerge when implementing management by objective practice.

Almost all organizations across the globe have objectives. The MBO aims at humanizing the quality and quantity of workers’ performance, apart from consumer contentment. This leads to maximized profits and outstanding market performance. The objectives of an organization should be clear and achievable within a certain period. After that adoption, GmbH has broadened its market, employed super production technology and competitive managers, who formulated some of the most effective objectives. However, even after its absorption by Carboflex in 2006 and expansion of its market base, GmbH is still reaping unsatisfactory profit levels after the last evaluation. This shows the existence of some internal factors, which are making the company’s objectives to be unachievable. Following the request by organization’s management, the following report will address some of the problems that the organization is facing when implementing the management by objective process and will recommend some basic solutions to these problems. Some of the basic problems are the problems of adjusting to the change, problems with management style, and the problems of evaluating performance. These problems are discussed in greater detail further in the paper.  

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1.Problems of Adjusting to Change.

GmbH is at a crucial stage of adjusting to change. At this point, the company is likely to experience three major problems. The change process makes the company alter its daily operational process. The power to set objectives shifts from the top management to junior and subordinate staff. Therefore, there is a possibility of series of confusions that might shift the staff focus away from the objectives, as the management might be unable to handle the new systems (Bridges & Bridges 2009, p.109). This adjustment comes with three problems, which are discussed below.

1.1 Problem of changing structures

MBO re-allocates jobs within the organization. It redistributes the managerial and coordination roles to junior staff. Moreover, the customarily processes and structures of management will change, as the management power shifts from the managers and senior officers to regular employees. This approach also teaches subordinates to yield the best results through setting objectives, self-supervision, and evaluation of the set goals. In some cases, members of junior staff who are not ready enough to exercise self-control may neglect their roles.  The other major problem that may arise from the management by objective program is the complication in evaluating workers’ performance. Bridges and Bridges (2009, p.172) argue that with changing structures and decentralization, it is very difficult to assess workers’ progress. Some workers may set very interesting objectives, but they will forge the results that match with their objectives to appear exceptional during the evaluation. The program reduces supervision of workers and allows them to take control over their activities. They implement their ideas through setting objectives and working towards their realization. This might also make workers to state their objectives and do nothing about their implementation. This strains the coordination of individual workers at departmental levels, especially when such workers have set unrealistic and unclear goals. This makes the measuring of such goals to be very difficult. Moreover, there are fewer managers and a lot of paperwork. Hence, it is very difficult for these few managers to evaluate the performance of all individual workers in the department and their specific objectives. Therefore, there is a need to conduct assessment of workers’ time-to-time evaluation and give feedback on their performance, which is not an easy task (Monahan, 2008, p. 56).

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1.2  Division in management opinions over the program

Carboflex and GmbH have several managers in charge of different departments at different levels. However, the company’s management may react differently during the implementation of this program. Different managers at different departments are likely to come up with successful but conflicting ideas. Within same department, the management may split into three groups consisting of those who might be enthusiastic about the program, the unconvinced ones, and those who may dislike the program. This division in management may affect the success of the program because different opinions about the program may create conflicts and mistrust among managers (Jick & Peiperl, 2010, p.87).

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Moreover, managers may also lack necessary skills to handle different situations. Innovation demands high competence in interpersonal communication skills. However, some managers may lack these skills and find it very difficult to express themselves in front of their subordinates or colleagues. Furthermore, others may refrain from expressing their ideas because of the fear of losing their influence.  So, some might not be willing to share the little knowledge they have fearing to lose their authority over some issue if they give out too much “transparency”. This explains why lower level management team in GmbH is unwilling to share information with the top management from Carboflex. Such act within management causes division and creates knowledge gap between managers, which places the organization at risk. In addition, coordination becomes very difficult because one management department does not have relevant information. Consequently, different departments may end up formulating various conflicting objectives, which may cause disagreements among the management and staff. As a result, different departments opt to set objective that favor them. This further widens the gap between different sectors of management. It is important to note that managers will misuse involuntarily or unconsciously the management by objective program. This program demands high levels of professionalism and objectivity when one wishes to avoid this abuse. GmbH is experiencing similar problem and this explains why different conflicting arguments exist within the company. This problem is normal and when management shifts from centralized to decentralized form of management, such incidents may occur often. Therefore, it is important that the GmbH is be able to address the issue of division of management through accepting and merging a variety of opinions and by adopting different ideas in different departments as long as it brings long-term benefits to the organization.

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1.3  Management style problem

Management style matters in any organization. Managerial support does not only include funds alone but also managerial attitudes towards the employees. Managerial style may be autocratic or democratic. Managerial style may also promote the horizontal communication or discourage such communication. Therefore, managerial style plays an important role in motivating employees at work place. Although management may consider that it is supporting its staff, there is still a perception among the junior staff that the management is autocratic. After the absorption of the GmbH by Carboflex, the management abolished some of the traditional products and the junior staff felt that they gave the company the new identity without seeking junior staff’s opinions. As a result, the workers who had personal feeling attached to the abolished product were demoralized. This made workers feel that the management did not care about their opinions. Luecke (2003, p.198) believes that this type of management style is harmful to the change process. The management and senior officers may tend to set higher goals while the subordinate staff prefers setting low-standard objectives. When the subordinate fails to achieve goals set by management, the latter punishes the non-achiever and rewards the achiever. This is one form of autocratic management style, which demoralizes workers, who in their turn may cut communication with the management out of fear.

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Additionally, success of management by objectives principle depends on workers’ levels of motivation. During this stage, very simple factors e.g. improper communication patterns between the management and the subordinate staff might demoralize the staff from working towards the realization of certain objectives. Apart from communication, management style that does not appreciate workers’ efforts will not be able to motivate workers to perform well. Management by objective is the type of approach that only rewards the best workers, while the rest remain unrewarded or punished. This type of system may demotivate workers since they may feel that the company fails to reward their efforts even when they struggle so hard. This only mounts additional mental pressure on the worker, which may lead to depression. Therefore, lack of motivation causes problems in execution of the program and when the management lacks essential information, the program execution will fail and bring about poor performance of the organization. This not only worsens company’s performance internally but also damages its position in the external market. This explains why GmbH is still making unsatisfactory profits even after expanding to international market.

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  • There is a need to train the interested managers on various aspects of management by objectives to increase their skills to suitable levels of performance. The management should also organize training of different workers on the management by objective approach.
  • The company should engage more public relations officers, who will help in dealing with the issues before they develop into crisis and will establish organizational culture, which promotes management by objectives approach (Kelly, Hoopes & Conner 2003, p.45).
  • The management should encourage round-table discussions and make decisions after considering the long-term benefits of the set objectives.
  • The management needs to conduct regular interviews with both well-performing and ill-performing workers and help the ill-performing workers in formulating and implementing achievable goals. This also helps to acquire feedback on workers’ performance.
  • The supervisory team should assess the debates, ensure continuous information flow, and investigate whether it has practical or impractical effect on the senior staff.


From the above findings, it is evident that some problems arise during the implementation of management by objectives program. Therefore, the company should be ready to train its managers and workers because it is one way of developing the staff. The management also needs avoid the debates that may cause division. Apart from that, the management should encourage roundtable discussions, where different talented staff members could share their brilliant ideas. The management should also pay attention to the ideas that have long-term benefits for the company’s performance. This not only benefits the company but also motivates the workers. However, it is important to note that there is a possibility of increased confusion and criticism among management (Bible & Bivins 2011, p.109). Therefore, the management should examine the information flow and settle for practical information that has durable benefits to the organization. Finally, the management needs to employ the best public relations service officers who can help in establishing favorable organizational culture that will reduce conflicts through fostering understanding and generation of favorable organizational image. These developments will give the company competitive advantage in its market positioning.

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