TABLE OF CONTENTS
TITLE ……………………………………………………………………………… i
CERTIFICATION …………………………………………………………….. ii
APPROVAL ……………………………………………………………………. iii
DEDICATION …………………………………………………………………. iv
ACKNOWLEDGEMENT…………………………………………………… v
TABLE OF CONTENTS …………………………………………………. viii
ABSTRACT …………………………………………………………………….. xi
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study ………………………………………….. 1
1.2 Statement of the Problem ………………………………………… 5
1.3 Objective of the Study ……………………………………………… 6
1.4Research Questions……………………………………………………. 7
1.5Hypotheses ……………………………………………………………….. 7
1.6 Significance of the Study …………………………………………. 8
1.7Scope of the Study ………………………………………………………. 9
1.8 Limitations of the Study…………………………………………… 9
1.9 Definition of Terms ………………………………………………… 10
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CHAPTER TWO
LITERATURE REVIEW
2.1Definition of MBO ……………………………………………………… 11
2.2Theoretical Framework of the Study …………………………….. 14
2.3Application of Management by Objective ……………………… 15
2.4Role of Management by Objectives in
Organization Performance ……………………………………… 20
2.5Two Major School of Thought …………………………………….. 23
2.6Steps in Management by Objectives Process ……………….. 29
2.7Management by Objective-Objective Setting ………………… 33
2.8Management by Objectives Characteristics ………………….. 36
2.9Strengths and Weakness of Management by
Objectives System ………………………………………………… 38
2.10Elements of the Management by
Objectives System ………………………………………………… 49
2.11Historical Background of the Study ……………………………. 51
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Research Design ………………………………………………….. 54
3.2 Sources of Data ……………………………………………………. 55
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3.2.1 Primary Sources of Data ………………………………… 55
3.2.2 Secondary Sources of Data ……………………………. 55
3.3 Population of the Study ………………………………………….. 56
3.4 Sampling Design and Determination of
Sample Size …………………………………………………………. 57
3.5 Method of Data Collection ………………………………………. 58
3.6Questionnaire Design, Distribution and
Collection of Responses ……………………………………….. 61
3.6.1 Secondary Method of Data Collection ……………… 61
3.7 Method of Presentation and Analysis ………………………. 61
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation …………………………………………………. 63
4.2 Presentation According to the Key
Research Questions ……………………………………………… 66
4.3 Test of Hypotheses ……………………………………………….. 74
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CHAPTER FIVE
SUMMARY OF RESEARCH FINDINGS,
RECOMMENDATIONS AND CONCLUSIONS
5.1 Summary of Findings …………………………………………….. 79
5.2 Recommendations ………………………………………………… 81
5.3 Conclusion …………………………………………………………… 82
BIBLIOGRAPHY …………………………………………………… 84
APPENDIX …………………………………………………………… 87
xii
ABSTRACT
The main aim of this study is to examine Management by Objectives as aninstrument for organizational performance with focus on First Bank of Nigeria P c. 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). 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 given impetus to its development as a system. Management by objectives prefers to a structured
management technique of setting goals for any organizational unit. 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 coordinated
managerial goals, but it
is also a popular management techniques that cut across or pervade all human
activities namely business areas, educationed government, health care and nonprofit
organization. Unfortunately many of the organizations are yet to adopt this
technique in enlisting commitment and support of their staff. The major
objective/hypotheses of the study was to determine the various problems affecting
management of objectives as an instrument for organizational performance and
the level of participation of both managers and employees in the setting of goals to
be achieved in the organization. Data were collected from both primary and
secondary sources. The major sources of primary data were direct oral interview
and questionnaire which was conducted among the staff. The major instrument
used in the data collection was questionnaire. The data were presented in tables
as frequency distributions and in analysis. In testing the hypotheses, the statistical
test of proportion (Ztest)
was applied. The major findings of the study were: MBO
helps to obtain total commitment of all employees to work together in orderto
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. Moreso, there should be
autonomy in implementation of plans once the objectives have been agreed upon,
the individual should enjoy wide discretion in choosing the means for achieving the
objectives without being directed by higher ranking manager. Finally, the study
revealed a lot of positive implications and relevance of management by objectives
to modern day management of organizations especially in Nigeria. In practical
terms, the operations of management by objectives requires that each manager of
a unit draws up his department objectives with his subordinates in line with the
centrally stipulated corporate objectives and mission.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The imporance of attaining organization perfromance objective constitute a
fundamental phenomena for the managemnet of mordern organziation.
Management needs a lot of tools to be able to administereffectively 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.
Odiorne (1981:1) defines MBO as a system of
management whereby the superior and subordinate jointly
identify objectives, define individual major areas of
2
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. Besides,
Odiorne points out that management by objectives is a “system
of management” an overall framework used to guide the
organizational unit and outline its direction. He went further to
point out that “the superior and subordinate jointly identify
objectives”. In other words, it is a participative management
procedure that requires commitment and co-operation. The
definition deals with identifying the “results” that are expected.
Thus management by objectives concentrates on the output of
the organization evaluating people by assessing their
contribution to this output.
Management by objectives is a strategy where in the
management sets specific goals for the employees to
accomplish within fixed time period. Management by objective is
a dynamic system which seeks to integrate the company a need
to clarify and achieve its profit and growth goals with the
managers need to contribute and develop himself. It is a
demanding and rewarding style of managing a business.
3
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 a effective planning, control and development
system.
Management by objectives was define by Koontz and
O’Donnell (1968: 485) as a technique of system or method of
management whereby the superior and subordinate managers
of an organization agreed on its broad goal , translate these
goal into a chain of specific short term goals, defined each
individuals major areas of responsibility in terms of result
expected continually reviewed the accomplishment as the sole
basis of assessing and rewarding them.
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
4
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
5
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 prospect and problems of management by objective as an
instrument for organizational performance in Nigeria. In order to
investigate some of the above problems, one of the leading
financial institutions in the country, First Bank of Nigeria Plc.
Okpara Avenue Enugu Main has been chosen.
1.2STATEMENT 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, but it is also a popular
management technique that exit across or pervade all human
activities namely: business areas, educational, government,
health care and non profit organization.
Unfortunately many of the organizations are yet to adopt
this technique in earlisting 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.
1.3OBJECTIVES OF THE STUDY
The broad objective of the study is to find out the
prospects and problems of management by objectives as an
instrument for organizational performance in Nigeria.
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.
7
1.4RESEARCH QUESTION
In pursuit of the research objective of the study, the
following research questions have been formulated.
1.What are the problems militating against the use of
management by objectives as instrument for
organizational performance?
2.To what extent do both managers and employees participate
in the setting of goals to be achieved in the organization?
3.To what extent are employees given appropriate authority and
responsibilities for effective management by objectives?
1.5HYPOTHESES
The following hypothesis will guide the study:
1. HoManagers and employees do not participate in the
setting of goals to be achieved in the organization to
increase performance.
H1Managers and employees participate in the setting of
goals to be achieved in the organization to increase
performance.
8
2. HoNon-commitment of top managers are not one of the
problems militating against the use of Management
by Objectives as an instrument for organizational
performance.
H1Non-commitment of top managers is one of the
problems militating against the use of management
by objectives as an instrument for organizational
performance.
3. HoEmployees are not given appropriate authority and
responsibility for achieving the set objectives.
H1Employees are given appropriate authority and
responsibility for achieving the set objectives.
1.6 SIGNIFICANCE OF THE STUDY
!The Researcher: It will enable the researcher to fulfill the
partial requirement for the award of the award of Master’s
Degree in Management.
!The Firm (First Bank of Nigeria Plc.): 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
9
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.
1.7 SCOPE OF THE STUDY
This study focuses on the use of MBO as an instrument
for organization performance. But the scope is restricted to the
First Bank of Nigeria Plc. Enugu Main. The time scope covers
from 2006 to 2011.
1.8 LIMITATIONS OF THE STUDY
There are many factors that act as constraint to the effort
of the researcher in the course of writing this project. Most
prominent of the factors are:
Time
The research work is big task and as such requires time
and energy, which was not on the researchers side.
10
Finance
This is another limiting factor. Due to limited financial
resources available, the researcher cannot procure all the
needed materials for this project. The cost of transportation to
and for First Bank of Nigeria Plc Okpara Avenue is very high for
the researcher.
Dearth of Research Materials
Nigerians dislike activities that tend to probe them. They
tend to avoid researcher because they feel their activities that
are not meant for public consumption would be exposed through
research work.
1.9 DEFINITION OF RELEVANT CONCEPTS
! MBO: Management By Objectives
! WAEC: West African Examination Council
! SSCE: Senior Secondary Certificate Examination
! OND: Ordinary National Diploma
! B.Sc: Bachelor of Science
! PLC:Public Limited Company
! FBN:First Bank of Nigeria
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