Practical Application of MBO as a Management Theory

Essay by professordebUniversity, Master'sA+, March 2007

download word file, 6 pages 3.7

AbstractThis paper gives an evaluation of the practicality of employing Peter Drucker's, management by objective (MBO) theory to Company XYZ marketing communications firm to implement an employee recognition program (ERP). XYZ plans to implement MBO to ensure that team members have a clear understanding of the aims and objectives, of implementing an ERP. This paper balances the organization's management needs with the reality of bottom-line effectiveness along with determining what factors to consider in an ERP change management initiative.

Practical Applications of Management TheoriesXYZ is a certified female-and minority-owned business, established March 1988 in Houston, Texas. XYZ relocated its main office to Cleveland, Ohio in October 1991 maintaining a satellite office in Houston. XYZ's core competencies are marketing; logistics projects and facilities support management services. Services are rendered on a contract or fee basis, either cost plus or firm fixed price.

During an 18-year time span, the business has grown from two employees to 85 employees at its peak performance level. XYZ now operates with a smaller staff of five employees. XYZ's downsized operation could benefit by applying MBO during the implementation of an employee recognition program (ERP).

MBO will assist XYZ by holding individual employees responsible for achieving pre-determined goals and objectives, that are ideally specific, time defined, challenging and measurable, (Schermerhorn et al, 2004).

Management by Objective PrinciplesMBO endeavors to increase organizational performance by supporting goals and subordinate objectives throughout the organization. Hoopes (2003), discusses MBO as proposed by Peter Drucker referencing that, MBO requires a manager and subordinate to collaborate in setting goals and agree upon the deadlines. If the goal is unreachable by the deadline as agreed, the employees' performance standard is unsatisfactory. Hoopes (2003), states, "managers enable subordinates to work with autonomy and "self-control" rather...