Management by objectives is based around setting specific, quantifiable goals and then designing strategy in a manner that is expected to achieve those goals. The process by which this takes place should involve the employees directly in the goal-setting process. The employees have input into their roles and the ways in which those roles contribute to the overall objectives.
The focus on end goals compels management and the employees to lay out goals that are very specific and measurable. The goals must also be achievable, which is where employee input comes into the picture. Management and the employees also work together to ensure that the goals are relevant to the company’s objectives. Lastly, the goals must have a specific time frame. It is the time frames that result in .
Action planning is the process by which management determines the allocation of resources in order to achieve goals. It is an integral part of the strategic management process. Action planning is a top-down activity. Senior management sets broad, organization-wide goals which are disseminated down the company. Managers take the goals they are to achieve and set more goals for their workers.
The difference between action planning and MBO is that management by objectives involves the workforce to a far greater extent. The process is participative, whereas in action planning the employees merely receive their instructions and objectives. Management by objectives can help the firm to implement strategy by engaging and motivating the workforce. Because the staff have input into their own roles, they take more ownership of the plans overall. This to outperform, and dramatically reduces resistance to the plans
2). Strategy-culture compatibility is the degree to which the corporate culture supports the organization’s chosen strategy. When an organization wishes to implement a new strategy it must assess the fit between culture and strategy because if the culture does not support the strategy, then the strategy will be more difficult to implement.
I feel that culture follows strategyeventually. The firm sets strategy on the basis of what it wants to achieve. In many cases, the firm can only withstand a certain amount of deviation from their strategy before the health of the business is compromised. As a result, strategy is only moderately flexible, and typically only with respect to minor details.
Culture, on the other hand, is a significant potential constraint on strategy. For any given new strategy implementation, it is reasonable that the strategy may not be feasible because it is not supported by the culture. In such instances, strategy may follow culture, in particular if there is another sound strategy that could be adopted. Management may under that circumstance follow the path of least resistance.
However, for an organization to be truly effective they must not only have the best strategy for the of the company, but they must also have a culture that supports that strategy. Competitive circumstances for most firms will dictate that sooner or later the company will be forced to undertake a strategy and will need a supportive culture at that point. Thus, while occasionally management may choose culture over strategy in the short run, in the long run managers will engage the slow process of culture change in order to build an organization that is capable of meeting its long-term objectives.
3) Firms use a variety of different control forms in order to help achieve organization-wide objectives. Behavior controls deal with staff behavior, on the basis that certain behaviors (or lack thereof) are correlated with certain outcomes. Thus, it is the behavior that is controlled. This can come in a number of forms, including rules, “best practices” and job descriptions. Output controls place the focus squarely on the output, with significantly less attention on the behaviors that lead to the output. For example, when a sales person has a quota, that is an output control because the behavior is driven entirely by the end result. Input controls works by placing constraints on process inputs as a means of exerting control. An example might be setting a strict budget for a project. This focuses the manager on sticking to that budget, a process that the organization feels will result in the goals being achieved.
Benchmarking is useful for most firms. The exception would be firms that for one reason or another are not in a competitive environment. For those firms that are in a competitive environment, they can benefit from benchmarking because the benchmark sets the upper potential limit for the activity in question. Benchmarking therefore has a couple of main benefits. One is that it gives the company a target at which to shoot. The other is that benchmarking allows companies to set goals that are realistic. Having these goals provides extra motivation in part because workers know that those results can be achieved. Without the benchmark, they might feel that their targets are too high, or that there is no reason to pursue them.
Q4) Creating an entrepreneurial culture in an organization is not always easy. It is doubly difficult if the existing culture is not entrepreneurial because of organizational inertia. However, once it is understood that there are some barriers preventing the entrepreneurial culture for taking hold, then the company can undertake the steps necessary to remove those barriers. The first barrier is fear. Often, companies will have a culture that discourages risk-taking. Thus, the first step is to make sure that employees know there will be no negative repercussions for taking a chance and failing.
Another barrier is lack of resources. Firms that utilize input controls may allocate personnel and resources in accordance with specific objectives but this leaves little resources left over for other projects that may come up. Additionally, firms that use behavioral controls may not be facilitating an entrepreneurial culture. Output controls give employees much more flexibility to undertake entrepreneurial activities.
Lastly, to reduce inertia there needs to be a sophisticated communications program and even some incentives. This will allow the workforce to better understand the company’s commitment to an entrepreneurial culture. When workers see that the firm is truly committed, so too do they become committed.
Creative thinking is essential within any organization that faces a changing environment. Creative solutions allow the firm to handle the environment better and at a faster rate. In my organization, creativity is only moderately valued. The company is fairly stable and the business model has not changed much. There are significant barriers to entry so there is not expected to be any major change in the competitive dynamic in the near future. Hence, there is little benefit to promoting creativity, even though it is valued when the need arises.
McNamara, Carter. (2008). Basics of Action Planning. Free Management Library. Retrieved May 9, 2009 from http://managementhelp.org/plan_dec/str_plan/actions.htm
No author. (2009). Create an Entrepreneurial Culture Among Your Employees. Score. Retrieved May 9, 2009 from http://www.score.org/culture_employees.html
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