MANAGEMENT BY OBJECTIVE AND ITS EFFECT ON ORGANIZATIONAL PERFORMANCE: A CASE STUDY OF FIRST BANK NIGERIA PLC
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF STUDY
Management is an important tool of the present industrial society. For an organization to be successful, proper management is imperative. In other words, when proper management is absent, organization can run into losses. Management by objective is often used to initiate and implement realistic goals.
From the various definitions of management scholars, we understood that Management by objective is a management system in which the objectives of an organization are agreed upon, so that management and employees understand a common way forward.
Every organization has identifiable purpose and a system of co-operation. Abasili (2008) has it that the existence of an organization as well as provision of its administrative base is justifiable to the extent that available resources are deployed through cooperative endeavor in order to achieve agreed goals. The first bank of Nigeria Plc for instance have a hierarchy of attainable goals and objectives and a planned system of cooperative effort in which every participant has a definite role to play. Each of the staff is saddled with a responsibility which is geared towards achieving the organizational objectives. The key to the successful accomplishment of goals is the effective utilization of management by objective.
The banking industry has remained strictly regulated with the aim of ensuring a sound financial system in the face of various environmental challenges. First bank of Nigeria Limited enjoys a leading market position in Nigeria controlling approximately 15.2% of
industry assets. Rating strengths include the bank long track record in the market expanding branch network enhanced by the acquisition of the West African operation of international commercial bank (ICB) strong retail franchise and robust management team. First bank annual report (2014).
However, the main purpose of this research paper is to determine the effects of Management by Objectives on the Performance of First Bank Nigeria Plc.
Management by objective was introduced to many organizations during the early 60s. Kootz et al (1980), many scholars has attributed this concept of planning, this is because planning processes usually includes objectives. Management by objective is a concept coined by Peter Drucker, it is a result oriented concept whose method suggests that objectives should never be imposed on subordinates but rather should be a collective decision of all the concerned management.
Management by decision is a participative and democratic style of Management, it involves the establishment of goals by managers and their subordinates acting together, specifying responsibilities and assigning authority for achieving these goals. http://kaylan.city.blogspot (2010).
Management by Objective is widely practiced around the world today, but despite its wide application, it does not always take the same approach in many organizations but as an appraisal tool both to the managers and subordinates in the industry which aids them towards the attainment of organizational goals.
Some research findings have reported that there are no increases in organizational performance with regards to those who uses Management by objectives. However, many companies have adopted this practice and so many managers feel that it is effective.
They believe that Management by Objective are better oriented towards goal achievement and that it has many benefits when applied properly.
Management by objectives gives the employee the opportunity to participate in decision making. It assumes that the employee has been properly selected and trained and that the employee already knows their specific job roles and will be responsible for achieving the desired results in the organization.
1.2 STATEMENT OF THE PROBLEM
Management by objective has contributed immensely to the practice of management; many researchers have been able to identify the importance of this concept which can not be over emphasized. Its role in the improvement of the relationship between a superior and a subordinate is achieved by clear definition of activities which helps in the improvement of performance at all levels. Despite the huge benefits associated with Management by Objectives, there are some pitfalls that have prevented it from not having a positive effect on the performance of an organization.
These pitfalls could be as a result of superiors not monitoring the progress of an established goal, unspecific and unrealistic objectives and inability of placing the objectives in a written form may decrease peoples understanding or reducing their zeal and commitment to them.
In the case of First bank Nigeria Plc, we posited that instead of marshalling out objectives and given out orders on what ought to be done or not, objectives should be specified, documented and thoroughly imbibe into the staffs so that its positive effect would be seen on the organizational performance.
1.3 OBJECTIVES OF THE STUDY
The major objective of this research is to identify the effects of management by objective using the performance of First bank Nigeria PLC as a case study. In achieving this, the specific objectives are:
? To identify the relationship between Management by Objectives and performance of First bank employees.
? To access the management techniques employed by the management.
? To determine the effect of Management on the employees performance.
? To examine the extent which Management by Objective is used in achieving results?
? To discover if Management by Objective is strong enough to guide superiors and subordinates in peaceful co-existence while achieving set goals.
1.4 SIGNIFICANCE OF THE STUDY
This research study is highly significant and would be useful in many ways. On completion, the research findings will be able to provide much insight on the need to apply Management by Objectives in Nigerian Organizations as a veritable tool in achieving an efficient and effective goal.
Again, it will be of great benefit to the management of First Bank Nigeria PLC, as they will be faced with an opportunity to review their management techniques and amend areas that are not contributing to a good performance.
Researchers, Lecturers and students alike will find this study useful as the findings will equally contribute to extend the frontiers of knowledge and further research in this area of management.
1.5 RESEARCH QUESTIONS
The following research question is considered necessary based on the topic under study.
1. Does Management by Objective affect the employee performance and attitude in the organization?
2. Does Management by Objective practices have any good influence on the relationship between superiors and subordinates in Organizations?
3. Does Management by Objective have any effect on the efficiency of employees of First Bank Nigeria?
4. Is the purpose of Management as a result oriented concept achieved in First bank Nigeria
5. To what extent are employees given the appropriate authority and responsibilities for effective management by objective?
6. What problem prevents the effective utilization of Management by Objective in an organization especially in First bank Nigeria PLC.
1.6 SCOPE OF STUDY:
This research is an in-depth study of the effect of Management by Objectives on Organizational Performance using First Bank of Nigeria Plc as a case study. Therefore, the scope is limited to First bank of Nigeria PLC.
1.7 LIMITATIONS OF STUDY
This research work encountered certain problems. One of these is the inability of the researcher to sample opinion from respondents who kept rescheduling meetings with the researcher due to the nature of their job, but this should not be a problem, that may affect the research findings as the researcher tried to meet up with all the rescheduling in order to elicit every important information needed for the purpose of this research.
Again, the researcher was faced with so many other academic activities which include assignments, term papers, continuous assessment which sometimes made it difficult to squeeze out time for the research study. Despite these, great effort was made to retain focus in order to produce a quality and accurate study.
1.9 DEFINITION OF TERMS:
It will be very important to give a clear definition of certain keywords and abbreviations in order to facilitate proper understanding.
1. MBO: - This simply stands for Management by Objectives.
2. FBN:-First Bank of Nigeria
3. PLC: - Public Limited Company
