A CYBERNETIC MODEL OF THE MBO PROCESS

Abstract

In a rapidly changing environment, organizations are prone to adopt almost any new technique that purports to bring increased efficiency or effectiveness. One such technique that has recently found favor with practitioners of management is the objective-based planning and control system popularly known as Management by Objectives (MBO). An MBO system relies upon an interlocking hierarchy of organizational, departmental, and individual objectives. Attainment of individual objectives hopefully assures the successful achievement of departmental objectives and ultimately organizational goals (Hughes, 1965; Hill, 1969; Granger, 1970; Humble, 1970; Raia, 1974).

An inherent problem with most new management tools is the absence of a conceptual base. Consequently, even though a tool may be effective, it is difficult to explain why it works. MBO is no exception. For the most part. emphasis in the MBO literature has been on the procedural aspects of the technique with „normative prescriptions” emerging from trial and error. A review of the literature shows that much attention has been devoted to creating guidelines for applying MBO, to setting goals, to measuring performance, to adjusting goals, and similar pragmatic concerns. Unfortunately, few writers have been concerned with developing the theoretical framework needed to integrate the MBO research. Until such a framework is advanced, research results will continue to be fragmented.

One purpose of this article is to demonstrate that objective-based systems have their historical antecedents in cybernetic systems and, indeed, cybernetic theory provides a suitable framework for MBO. A second objective of this article is to report the results of an extensive MBOstudy conducted in a state governmental organization and incorporate these