Unit 6 Goal-setting

Words to remember:

deficiency – ошибка, недостаток

to accomplish the task – выполнить задачу

to contribute to – вносить вклад, содействовать

to rank the tasks – ранжировать задачи

to quantify – оценивать, подсчитывать

feedback – обратная связь, ответная реакция

to be committed to – иметь обязательства перед

to liaise – поддерживать тесную связь с

to give guidance to – руководить

durability – прочность

to judge – выносить суждение, давать оценку

to link – связывать

to emphasize – подчёркивать

to review – пересматривать, перепроверять

to identify with – разделять взгляды, убеждения, проблемы с

to identify somebody with something – быть связанным с

to scrap – избавляться от; сдавать на слом

Starting up

Case problem: Goal-setting at Taylor Food

Read the text and speak on the questions.

Ralph Taylor is quite pleased with the results of planning in his newly renamed company, Taylor Foods. As he explained to the instructor who introduced him to planning, “I’m very pleased with what planning did for us at Taylor. We were an old company faced with the declining market. A few strategies and – we’re now a multiproduct firm in an expanding market”.

“Are you experiencing any problems with planning?” asked the management professor. Taylor replied, ”I sure am. We are having problems in getting our people to personalize the planning process. They tend to regard planning as something that the owner should be doing rather than something they should be doing. Here are some notes I took from my planning meeting with Max Bloom, the sales manager for meats. He told me something to this effect: “My plans are to beat out the competition and beat them good and to sell all the meat I can. Beyond that I have no plans. Each day I try to do my job the best I can.”

Fascinated by what he heard, the professor asked for more evidence about planning problems within Taylor Meats. Taylor responded, ”Well, here are my notes from my planning conference with Georgia Anderson, my sales manager for nonmeat products. She said something of this nature: “My plans are for my department to become the best it can be. But most of the things I would have to do to accomplish this are beyond my control. It’s your job, Ralph, as the owner, to provide the budget so we can be tops in our area. Planning in a small company is really the owner’s responsibility.”

Taylor asked the professor, “Do you get my point about my sales managers not taking personal responsibility for planning?” The professor replied, “Maybe the situation isn’t as hopeless as you think”.

Case Questions

1. What deficiencies do you see in the planning statements made by the two sales managers?

2. What strengths do you see in the planning statements made by the two sales managers?

3. What might Ralph Taylor be doing wrong in his attempts to involve Bloom and Anderson in planning?

Reading

You will read the text about the performance of employees under the MBO system.

Management by Objectives (MBO) is a system which was first described by the American Peter Drucker, in 1954, in his book The Practice of Management. MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world’s largest companies. In his book, Peter Drucker emphasized that an organization and its staff must have clear goals. Each individual must understand the goals of the enterprise he works for, and must make a contribution to them. It is also vital, in Drucker’s view, that the individual knows what his manager expects of him. He must know what sort of results he is expected to achieve.

If an organization uses the Management by Objectives approach, it must pay careful attention to planning. This is because each individual has clearly defined objectives. And these will contribute to the overall objectives of the enterprise. With MBO, individual and organization objectives are linked. A special feature of MBO is that the subordinate participates with his manager in developing objectives. After these have been worked out, his performance, in relation to the goals, can be assessed. MBO, therefore, focuses on results. The subordinate’s performance is judged in terms of how well or badly he has achieved his goals.

Various kinds of MBO systems are used in organizations. Here is an example of how a program might work in a company.

The program consists of several stages. First, the subordinate’s job is defined. Next, his current performance is evaluated. Then, new objectives are developed by the subordinate and his manager. Finally, the program is put into action. Later, there are periodic reviews of the person’s performance, and his progress is checked

Let us consider these stages in more detail. At the first stage, the subordinate and his manager define the job separately. They also rank the tasks in the order of importance. Both parties then meet and discuss the statements they have made in writing. It is quite possible that they will not agree about certain aspects of the job. They discuss their differences of opinion. In the end, they both have a clearer idea of what the job involves.

At stage two, the subordinate and his manager examine each task. They try to decide how well or badly it is being performed. Again, they do this evaluation separately. They meet and discuss their assessments. All being well, the manager will have the chance to praise the subordinate for some of his work. On the other hand, the subordinate or the manager - or even both parties - may point out areas where there are problems - tasks which are not performed properly.

Developing objectives comes next. The subordinate and his manager try to develop goals which are challenging but realistic. The manager may set performance standards which can be measured or quantified. But this is not essential. The objectives probably spell out results that must be achieved. There will be dates by which the subordinate must achieve his goals.

The table below gives examples of objectives for an MBO program.

Subordinate Objective

__________________________________________________________________

Sales representative Increase sales of video-recorders in the

area by 5 %, by 1 June.

Obtain five new accounts by 1 January.

Send sales reports in on time._______________

Chief Accountant Reduce bad debts from 8 % to 4 % of

sales turnover by 1 January.

Introduce new computer system in

Accounts Department by 1 January.__________

Marketing Manager Complete test marketing of PX hi-fi

units by 1 January.

Increase market share of home

computers by 3 % by 1 January.

Production Manager Meet 90 % of all delivery dates.

Reduce cost of bought-in materials

by 5 %.

Reduce the number of units rejected

by quality control.

Increase number of quality control

circles meeting each month.

All goals to be achieved by 1 January.

Personnel manager Complete training program for

shop-floor workers by 1 January.

Present bonus scheme for Board

approval by 1 June.

Make suggestions for improved

selection procedures by 1 June.

The subordinate and the manager discuss the objectives and make plans for achieving them. The manager may have to help in some way, perhaps by providing more training for the subordinate or buying more modern machines.

Finally, the subordinate starts achieving the goals. From time to time, the subordinate and the manager meet to discuss progress. It is vital that the manager receives feedback from the subordinate on performance and achievements.

There are many benefits of Management by Objectives. The system helps the subordinate to see clearly his role in the organization and the tasks he must carry out. He has a say in how his job is performed, and what his goals should be. As a result he feels more responsible and motivated and is therefore likely to be more committed to the objectives of the organization.

MBO is a good technique for assessing an individual’s performance. He is judged on results, rather than on the personal feelings or prejudices of the manager. An MBO program should lead to better coordination and communications within an enterprise. The subordinate must liaise closely with his manager. The manager acts as teacher and guide. The individual is encouraged to identify with the goals of the organization. Most important of all, MBO makes the individual think of results, of the contribution he is making - or should make - to the enterprise. The main limitations of the system are that it is time-consuming and may create a lot of paperwork. In practice, MBO programs are not fully supported by managements. This could be because managers are not always skilled at interviewing and giving guidance.

A few years ago, it was discovered that 70 % of the 500 biggest companies in the USA were using MBO. However, a later survey showed that only 15 % of the programs were considered successful. In spite of this finding, there is little doubt that MBO has helped to increase the efficiency of both subordinates and their managers.

Comprehension / interpretation

1. How does a manager evaluate the performance of a subordinate under the MBO system?

2. Note down the five stages of the program given as an example of an MBO system.

3. Note down some of the advantages of MBO for each of the following:

a) company b) manager c) subordinate

4. In your opinion what is the manager’s role in an MBO program?

a) judge b) observer c) motivator d critic

Language focus