MG4031 week 5 lecture 2

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Questions and Answers

What is the initial step in the Management by Objectives (MBO) process?

The employee proposes their own goals.

Performance standards are set for employees. (correct)

Goals are quantified and given a timeframe.

Performance reviews are conducted.

Which of the following is NOT an advantage of Management by Objectives (MBO)?

Motivation improves as employees feel involved.

Control is easier as standards are established.

Employees have no input in decision-making. (correct)

Employee appraisal is simplified.

Which disadvantage of MBO can result from the focus on objectives?

Better communication across departments.

Inflexibility in adapting to environmental changes. (correct)

Clearer understanding of goals for all roles.

Increased motivation among all employees.

What role does a manager play during the performance reviews in MBO?

To help employees achieve the goals that were set. Signup and view all the answers

In the planning process, what alternative type of objective can a business pursue aside from profit maximization?

Profit satisficing. Signup and view all the answers

How can the MBO process improve communication within an organization?

By engaging employees in goal-setting discussions. Signup and view all the answers

What is a potential negative impact of setting easily measurable objectives in MBO?

Employees may neglect other important tasks. Signup and view all the answers

What is a common misconception about the MBO program's requirement for success?

It requires minimal involvement from management. Signup and view all the answers

What is the primary aim of conducting a SWOT analysis in an organization?

To assess competitive advantages and limitations Signup and view all the answers

Which category in a SWOT analysis focuses on the workforce's structure and quality?

Human Resources Signup and view all the answers

When revising objectives after a SWOT analysis, what is the primary purpose?

To align objectives for competitive advantage Signup and view all the answers

Which component of strategic planning includes developing flexible plans for potential contingencies?

Tactical Plans Signup and view all the answers

What distinctions do corporate strategies have when compared to business strategies?

Corporate strategies are broader, involving several industries, while business strategies are specific to one industry sector. Signup and view all the answers

Which of the following best describes a 'Prospector' in Miles and Snow's Topology?

A company exploring new market opportunities and embracing risk Signup and view all the answers

What aspect of an organization does a PEST analysis focus on?

Political, Economic, Social, and Technological factors in the external environment Signup and view all the answers

Which of the following is NOT a category related to the resource profile of an organization?

Cultural Resources Signup and view all the answers

What characterizes an organisation following a Defender strategy?

Focuses on maintaining growth and customer service Signup and view all the answers

Which of the following is NOT a characteristic of organisations pursuing Unrelated Diversification?

Strong connection between products Signup and view all the answers

What strategy focuses on offering the lowest cost product/service?

Cost Leadership Signup and view all the answers

In the Boston Consulting Group (BCG) Matrix, what do 'Stars' represent?

High market share in a high growth market Signup and view all the answers

What is the main issue addressed at the corporate level planning structure?

The nature and degree of diversification Signup and view all the answers

What best describes the Analyser strategy in an organisational context?

It retains market position while embracing moderate changes Signup and view all the answers

Which strategy is exemplified by Coca-Cola due to its diversified and related products?

Related Diversification Signup and view all the answers

What is a disadvantage of pursuing Unrelated Diversification?

Risk of management difficulties and lack of synergy Signup and view all the answers

Study Notes

Management by Objectives (MBO)

An approach to setting objectives and ensuring achievement.
Often used in conjunction with planning.
Employees are free to set goals within a framework provided by the manager.
Steps involved:
- Performance standards set by management.
- Employee proposes their own goals based on exceeding standards.
- Goals are quantified, given a timeframe and agreed upon by both employee and manager.
- Performance reviews are conducted at agreed intervals with feedback.
Manager's role is to help employees achieve goals.
Requires complete organizational support and continuous monitoring.
Requires a competent manager.

Advantages of MBO

Clearer understanding of goals by employees.
Improved planning from better communication and commitment.
Easier control due to set standards.
Improved employee motivation due to input in decision-making.
Simplified employee appraisal.

Disadvantages of MBO

Employees feeling coerced.
Possible focus on easily measurable objectives that aren't always the best.
Potential for contradicting goals.
Inflexibility if business environment changes.
Difficulty abandoning a goal.
Resentment or lack of commitment when goals are imposed rather than negotiated.

The Planning Process

6 steps in the planning process:
- Define Corporate Objectives: Two types: profit maximisers and profit satisficing.
Conduct External and Internal Analysis: SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.
Revise Objectives to gain competitive edge.
Develop Strategic Plans (Corporate and Business levels).
Develop Tactical Plans (Flexible plans for contingencies).
Implement Operational Plans.

Business Level Planning Structures

Miles and Snow Topology: Identifies 4 business level strategies.
- Prospector: Explores new markets, embraces change, rewards risk-taking.
- Defender: Protects existing operations, less aggressive, maintains growth.
- Analyser: Maintains current markets and customers, balances change and innovation.
- Reactor: Responds to competitor changes when it's too late.
Porter's Generic Strategies: Three generic strategies.
- Differentiation: Makes products/services unique and distinctive.
- Cost Leadership: Low cost product/service.
- Focus: Targets specific regional market, product line or customer group.

Corporate Level Planning Structures

Related Diversification: Producing similar products/services, competing in the same market.
Unrelated Diversification: Producing diverse products across many unrelated markets.

The Boston Consulting Group (BCG) Matrix

Framework for managing diversification strategies.
Considers market growth rate and market share.
Key categories:
- Stars (high market share, high growth): Desirable.
- Question Marks: (low market share, high growth): Unpredictable.
- Cash Cows: (high market share, low growth): Good position.
- Dogs: (low market share, low growth): Sell or divest.

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Description

Discover the key concepts of Management by Objectives (MBO) in this quiz. Learn about its advantages, disadvantages, processes, and the roles of both managers and employees in setting and achieving goals. This assessment provides valuable insights into effective management practices.