The Use Of Management By Objectives Business Essay

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(a) Constant Change of Action Plans. The management will find it difficult to appraise performance and also for plans to take effect. This will happen when changes to plans are dynamic which deprives the management of performance indicators of its managers and employees. Instead, action plans should be carefully devised so as to minimise changes for better appraisal and review system.

(b) Employer and Employee Relationship. Plans set out by managers needs people on the grounds to react. Distrust between either party will affect working relationships which may impede the time taken and resources needed to attain goals that are set.

(c) Correct Emphasis. Emphasis should not be only on operational goals as it may not benefit other functional teams or departments. The correct weightage should be landed on activities that will attain operational goals through the cooperations of different functional teams and departments.

(d) Empowerment. An organisation should involve staff level employees to jointly set goals with managers by limiting the amount of rules put in place so as not to give the employee more free play in decision making. Encouragement should be given to employees to speak their mind and give suggestions on how processes could be better managed from their perspective.

(e) Consistency. The organisation should consistent in motivating and encouraging employees to achieve their set goals and remind them of what their goals. Appraising the performance and reviewing plans for the sake of filling up paperwork exhausts the employees when it is just a procedure. This will make employees forget their goals once the paperwork is done or thinking the paperwork is a waste of time.


(2) In practising MBO, companies should be aware of the factors that could be detrimental to the application of the method and henceforth, avoid letting these factors affect the processes.

(Word Count : 339 Words)

Question 2a.


(1) Aventec is expanding its current business to liberalise the ASEAN Free Trade Area (AFTA). In order to achieve this, Aventec has to change its organisation structure.

(a). Current Structure. The current structure of the company is shown in Diagram 1 - Vertical functional.

Diagram 1 - Vertical functional.

Aventec is currently using vertical functional structure. In this structure, the staffs are departmentalised according to their skills, resource use and their functional roles in to company. In Avecte's five department structure, information flows up and down from the 5 departments to the top management or vice versa. Decision is only be made at the top management. This organisational structure is thus time exhaustive when it comes to decision making.

(b) Proposed Structure. The proposed structure to be used for Aventec is as shown in Diagram 2 - Matrix Structure.

Diagram 2 - Matrix Structure.

The Matrix structure combines both functional and divisional structures and forms dual lines of authority. Employees will report to two supervisors simultaneously to resolve the conflicting demands of a particular service with the top leader overseeing the services for the entire matrix. Time taken to make decisions will be much reduced compared to functional structure.

Benefits of Proposed Structure

(2) In the regionalisation of the comapny. Aventec needs to manage the matrix structure using a centralised control and decentralised management manner to generate different product line to adapt to the dynamic environment. The decentralised structure occurs when various staff with different expertise forms a group to generate a solution or proposal to resolve a problem or a new product. This level of expertise could be made available to all the divisions thus increasing interaction across the departments. Henceforth, information is shared amongst the departments and resources are maximised. There will be no duplication of duties and lesser time is required to do research analysis.

(3) Personal development and management skills can develop each time the employees interact. The management can still manage the company with a centralised command. The overall decision still lies with the top management for huge investment decisions deem fit by the management.

(Word Count : 351 Words)

Question 2b.


(1) Aventec's current organisational structure poses a few problems to Aventec. The existing problems are identified to be in the ares of (a) Communications, (b) Inflexibility (slow response to external environment) and (c) Decision Making Process.

(a) Communications. The staffs work independently, thus much interaction across the department is limited to only within the fuctional department. This will hinder the organisation's overall work performance as the staffs are oblivious to the work of other staffs. Longer time will be spent to seek for expertise across the department rather than zooming straight into seeking resolutions. In order to overcome this, Aventec management can take the opportunity to change its organisational structure to involve project managers and teams comprising of staffs from various departments in the matrix structure to allow more opportunity for departments to interact and information can be shared across the departments readily.

(b) Inflexibility. Aventec is slow when responding to external changes. When there are changes to its external environment, the management has to conduct analysis which could be time consuming. As a result the company will tend to react slower to new external changes. This will place Aventec in a disadvantageous postion as slower response to the external market will cause Aventec to lose out to its competitors. Thus, it is important for Aventec to organise specialized teams to be the subject matter experts to monitor and conduct market research. In addition, teams can specialised in developing new products and services to cater to the new changes in the market. This will enable the company to have a competitive edge over its competitors as more time catered to enhancing strategy

(c) Decision Making Process. The decision process are impeded by staff work as all decision has to go through the top management and indecisiveness could potentially prolong the process which results in slow decision making. Aventec should utilise its staff expertise to conduct proper research and come up with good quality proposals. The company can make use of a tiered approval level system so that functional decisions could be made at the managerial level instead escalating the decision everytime.


In conclusion, Aventec is proposed to change its company structure and management processes to allow staffs to hold more responsibilities. They should also be duly rewarded measured on performance basis which would help in motivating the staffs to achieve a higher level of personal competency.

(Word Count : 399 Words)

Question 3a


(1). When managing a business overseas with briberies and vices ampant in both Thailand and Vietnam, the selection of personnel to oversee the business abroad is critical. The personalities traits present in the individual should be (a) Ego Strength, (b) Self Confidence, (c) Strong sense of independence, (d) Postconventional Stage of Moral development and (e) Having a Strong Tolerance towards Bribery.

(a). Strong Ego Strength. Defined as the ability to tolerate failures, tenacity towards achieving an objective and openness in learning to adapt. These traits of a manager used in overseas subsidiary would allow aventec to persevere through the difficult times at the beginning of the business. The ability to adapt to the foreign environment is crucial to a manager operating abroad as socio-cultural differences plays a significant role in businesses.

(b). Self Confidence. In the socio-psychological concept, self confidence is an attitude towards ourselves to be positive about our abilities. Such characteristics includes the belief in accomplishing a task and vanquish hindrance in one's task. Being alone in a foreign land, the selected manager must possess strong sense of self confidence to accomplish task and be optimistic about the situation around him. He must believe that he can do it in order to lead the people under him towards a common objective.

(c) Strong Sense of Independence. As the oversea subsidiary is a far distance from the main company, the individual selected must be self disciplined enough to do his work as well as work independently as he is then given the freedom to show his flair in his work.

(d) Stage of Moral Development. At the postconventional level of personal development, the individual is guided by internal set of values and ethics. This will enhance the organisational values as an ethical manager in abroad subsidiary will ensure the business survivability by utilising the right practices in the business.

(e) Strong Tolerance for Bribery. As mentioned in the introduction, bribery is rampant in Thailand and Vietnam, hence a strong sense of tolerance towards bribery will ensure the business to be in safe hands and business practices are fair.


(2) With all the above personality traits in place, the selected personnel will ensure the expansion of business abroad for Aventec a success.

(Word Count : 374 Words)

Question 3b.


There are mainly four factors that could indirectly affect businesse to consider before jumping in on an investment. In the case of Aventec, they must first consider (a) Political/Legal Environment, (b) Economics of the country, (c) Socio-cultural background and (d) Technological advancement of the country.

(a) Political/Legal Environment. Although the selected countries have free trade agreements. The political and legal state of the country still has a strong influence on the purchasing power of its people and regulations on businesses. It is therefore prudent to consider the following factors:

The stability of its government. Case studies can be explored on the extend of political unrest in the country which could greatly affect businesses.

Laws on taxation of businesses. It will be good to be conversant with the tax system in the country to avoid unnecessary brushes with the local government.

The government's stand on ethics of marketing, whether there is any restriction on the message you can bring across in your advertisements.

(b) Economics. The economics of the country is extremely important. The company should consider the following points on economic issues:

Due to inflations and depreciation, the value of the currency used in the country may drop overtime and the money invested could drop as a result.

The customer perceived values of a product or services could well too be affected by economic issues.

We should look at the long and short term prospects of the prospectus country to better determine the feasibility of such an investment.

Socio-Cultural Background. The socio-cultural difference in each country is crucial for the marketing of products or services in the country. The things that could affect the diffusion of products and services to the masses are as follow:

Language spoken/written could potentially be a barrier to overcome in order to better communicate with the local people.

The receptivity towards foreign products and services within the country.

Whether Green issues are dominant in the country. Some countries are Green dominant and would be more inclined to initiatives by companies offering Greener products and services.

Technological Advancement. The technological advancement in the country could directly or indirectly influence the sales of the company. In the new era of management, technologies gives the company the cutting edge over other businesses. Hence these ares should be looked into:

How the company can harness the technological advantage in the country to competitively challenge the local companies.

The modes of distribution or marketing of the company's product and services. Whether it can be done online(if there is a high subscription rate of internet services in the country.)

iii. Whether the technology in the country allows for speedy transfer of information, goods and services as well as in transportation of cargo.


After analysing the factors above, the pros and cons of the investing in a particular country would be apparent and would aid in making decisions on the investment choices.

(Word Count : 497 Words)