Legitimacy. An organization mission describes what the organization stands for and its reason for existence. It symbolizes legitimacy to external audiences such as investors, suppliers, and customers.
Source of motivation and commitment. Goals and plans facilitate employees’ identification with the organization and help motivate them by reducing uncertainty and clarifying what they should accomplish.
Goal provides the “why” of an organization or subunit’s existence, a plan tells the “how” .
Mission Statement for Mail Boxes Etc. Our Mission Making Business Easier Worldwide Through Our Service and Distribution Network, Delivering Personalized and Convenient Business Solutions With World-Class Customers Service. Our Core Values Accountability Respect Trust Integrity Commitment Fairness Honesty Caring
Operational goals. Specific, measurable results expected from departments, work groups, and individuals within the organization.
Operational plans. Plans developed at the organization’s lower levels that specify action steps toward achieving operational goals and that support tactical planning activities.
MISSION Finance V.P. Keep outstanding accounts below $500,000 Keep borrowing below $2 million Provide monthly budget statements for departments Have delinquent accounts of no more than 2% of total Supervisor – Automatic Machines Produce 150,000 standard units at average cost of $16 Have machine downtime of less than 7% Respond to employee grievances within 24 hours STRATEGIC GOALS President 12% return on investment ; 5% growth No employee layoff ; Excellent service to customer TACTICAL GOALS Production V.P. Manufacture 1,200,000 products at average cost of $19 Increase manufacturing productivity by 2% Resolve employee grievances within 3 working days OPERATIONAL GOALS Accounts Receivable Manager Issue invoices within 5 days of sale Check new customers’ credit within 1 working day Allow no account to be overdue more than 5 months Call delinquent accounts weekly Manufacture both standard and custom metal products for various applications in the machine tool industry
5. Too much paperwork saps MBO energy. 4. Mechanistic organizations and values that discourage participation can harm the MBO process. 4. Departmental and individual goals are aligned with company goals. 3. Strategic goals may be displaced by operational goals. 3. Employees are motivated. 2. An environment of poor employer-employee relations reduces MBO effectiveness. 2. Performance can be improved at all company levels. 1. Constant change prevents MBO from taking hold. 1. Manager and employee efforts are focused on activities that will lead to goal attainment. Problems with MBO Benefits of MBO