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THE EFFECT OF MANAGEMENT BY OBJECTIVE ON ORGANISATIONAL PERFORMANCE OF SELECTED MANUFACTURING FIRMS IN ENUGU STATE.

Project topic for Business Administration department.

CHAPTER ONE

INTRODUCTION

  • Background of the Study

An organization must build a team and unite the individuals in it behind a common goal. Individuals might contribute to the attainment of the goal in different ways, but their efforts must operate in the same direction, and their contributions must fit together to produce a whole. Management needs lots of tools to be able to administer effectively in the day-to-day running of business and to solve the numerous problems facing the business community. One of such problems facing the business community has been the problem of integrating the objectives of the employees with that of the organization for the achievement of organizational objectives. Management by objectives is one of such tools needed to solve the problem of integrating the objectives of the employees with that of the organization (Derek, 2015).

Nwachukwu (2014), opines that organizations that practice management by objectives seem to be on the positive threshold of solving this problem. The distinguishing characteristic of management by objectives is its emphasis on results achievement by objective. It is based on the concept of human motivation, that, it places emphases on the involvement of the employee in planning, directing and controlling aspects of the job which they do. That will in turn help on what will be done, when it will be done and how it will be done. The underlying belief is that this involvement of the employee leads to commitment and if an employee is committed, he can be directed to perform in a manner that positively contributes to the achievement of organizational objectives.

Moreover, acceptance of responsibility removes fear and spur up employees with an internal self motivation for performance (Mullins, 2016). When employees are motivated, productivity increases. Through management by objectives, responsible workers emerge. Employees’ contribution is recognized and rewarded through job performance appraisal system, which is an ingredient of management by objectives.

 It is on this trend that the researcher examined effect of management by objectives on organizational performance with three selected firms in Enugu State as a case study.

  • Statement 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-ordinated management performance, but it is also a popular management technique that exit across or pervade all human activities.

The consequence of not setting an objective which is generally acceptable and agreed upon by management is that self-centered employees would take advantage of the situation. There is every likelihood that result will be distorted and achievement of false targets represented. In this case, management by objectives (MBO) would be counterproductive.

The problems include that there is usually lack of support from top management which affects the effective utilization of management by objectives. At times managers do not allow employees in the setting of goals to be achieved in the organization, and this makes it difficult for implementation of management by objectives. Moreover, employees are not given appropriate authority and responsibility for achieving the set objectives in the organization and some managers do not have appropriate strategies for effective utilization of management by objectives. That, therefore, it what this work starts to address.

1.3       Objectives of the Study

The broad objective of the study is to examine effect of management by objectives on organizational performance. Specifically, the objectives include to:     

  • Determine the effect of employee participation on the sales turnover of manufacturing firms in Enugu State.
  • Ascertain the effect of setting performance objectives on the profitability of manufacturing firms in Enugu State.
  • Identify the effect of specifying goals on competitive advantage of manufacturing firms in Enugu State.
  • Assess the effect of performance feedback on labour turnover of manufacturing firms in Enugu State.
  • Research Questions

In line with the objectives of the study, the following research questions were raised.

  • What is the effect of employee participation on the sales turnover of manufacturing firms in Enugu State?
  • What is the effect of setting performance objectives on the profitability of manufacturing firms in Enugu State?
  • What is the effect of specifying goals on competitive advantage of manufacturing firms in Enugu State?
  • What is the effect of performance feedback on the labour turnover of manufacturing firms in Enugu State?

1.5       Statement of Hypotheses

Based on the above research questions, the following null hypotheses were formulated.

  • Employee participation does not have significant and positive effect on sales turnover of manufacturing firms in Enugu State.
  • Setting performance objectives does not have significant and positive effect on the profitability of manufacturing firms in Enugu State.
  • Specifying goals does not have significant and positive effect on competitive advantage of manufacturing firms.
  • Performance feedback does not have significant and positive effect on the labour turnover of manufacturing firms in Enugu State.

1.6       Significance of the Study

This research study is very important because it examines the effect of management by objective on organizational performance. The management and employees of various organizations will benefit from this research study because the management will be more enlightened on the importance and effective utilization of management by objective in an organization. Furthermore, the study will help reduce the incidence of labour turnover as management by objectives aligns the individual goals with that of the organization. The researcher (student) will benefit from this research work as it is a requirement for the award of a Bachelor of Science (B.Sc) in Business Administration. The university will benefit as the research work increases its secondary source of data. The research work also serves as a reference material for further research on this topic.

1.7       Scope of the Study

This study covered the effect of determination of individual goals in line with organizational goals on labour turnover, the extent participation of both employees and management in goal setting affects the sales turnover, the effect of optimization of resources on profitability and the effect of periodic reviews of employee performance on competitive advantage. The organizations studied were Juhel Pharmaceuticals, Emenite Nigeria Limited and Alo Aluminum manufacturing company. The time scope is between 2009-2018.

1.8 Limitations of the Study

The researcher encountered some impediments in the course of carrying out this research work, such as: 

Negative attitude of the respondents: The members of staff of the three selected firms were economical with information. They thought the researcher was sent by their employers to get information which could be used to victimize them.

Lukewarm Attitude in Getting Materials:  The researcher initially had this lukewarm attitude in getting materials but this was subdued through the help of the university librarian and through the internet.

1.9 Operational Definition of Terms

Management by Objective: This is a process of defining objectives within an organization, so that management and employees agree to the objectives and understand what they need to do in the organization.


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