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This work is licensed under a Creative Commons Attribution 4.0 International License.
Cite as: Brimah, B.A., Bamidele, A.G., Rabiu, R.O., John, I.S. (2020). The Connexus of Management by
Objectives and Organisational Performance: Evidence from Tuyil Pharmaceutical Limited, Ilorin. SocioEconomic
Challenges, 4(2), 90-98. https://doi.org/10.21272/sec.4(2).90-98.2020.
© The Authors, 2020. This article is published with open access at Sumy State University.
1.0 Introduction
Employees are been considered to be the backbone of most organization irrespective of its size and structure,
organizations around the globe invest on employees because of the pivotal and strategic importance that they play
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in achieving the organization goals (Ojokuku, 2012). Wanting people to perform in high level, high standards of
performance should be set. The employees must know precisely why they figure in the payment list, what is
expected from them and what makes a high performance (Armstrong, 2009). All organizations, in nowadays, are
faced with a competing, unstable and turbulent environment, therefore managers focus is in creating competing
advantage through employees’ development of organization.
In the presence of the challenges faced by managers in producing a better results in a rapid technological and social
change, managers must be able to use this rapid change to produce their results; they must use the change and not
be used or swallowed up by it. The most important tool the manager has in setting and achieving forward-looking
goals is people, and to achieve results with this tool the manager must: first, be able to instill in the workers a sense
of vital commitment and desire to contribute to organizational goals; second, control and coordinate the efforts of
the workers toward goal accomplishment; and, last, help his or her subordinates to grow in ability so that they can
make greater contributions (Drucker, 1954). In the hopes of increasing individual production and contribution
management has resorted to using various techniques and tools to bring out the best performance from their workers
(Drucker, 1986).
MBO has been considered as a formal management system with precise review scheduling, set evaluation
techniques, and specific formats in which objectives and measures must be presented for review and discussion. In
other organizations, it may be so informal as to be described simply as “we get together and decide what we’ve
done and what we’re going to do.” However, in most organizations, MBO takes the form of formal objective setting
and appraisal meetings held on a regular basis often quarterly, semi-annually, or annually (Brim, 2012). This
method was generated by the need to ordering actions based on the idea that the success in implementing a
development strategy for the unit depends on the correlation of the general objectives with the ones of
organizational subdivisions and the interest of the entire personnel of the economic unit (Drucker, 2010).
Regardless of the implementation of this strategy, there are still some factors which serves as a setback on the vision
statements, mission statements, purpose and objectives which an organsiation strive to achieve by deploying
human, material and financial resources. Some of the identified problems incudes deficiency in planning of
organization’s policies, programmes and activities usually has a backsliding effect on the operational performance
of organizations (Armstrong, 2005). Additionally, lack of control or systems’ control in some organization which
banking industry is not exempted often affects the overall individual and general performance of organizations in
the industry (Armstrong, 2012).
Research Objectives
The objectives of this study are to;
i. examine relationship between goal commitments and organisation performance.
ii. investigate relationship between performance feedback and organisation performance.
iii. determine relationship between task complexity and organisation performance.
Research Hypothesis
The following research hypotheses were tested in this research paper;
Ho1: Goal commitment does not have any significant relationship with organisational performance.
Ho2: Performance feedback does not have any significant relationship with organisational performance.
Ho3: Task complexity does not have any significant relationship with organisation performance.
2.0 Literature review
a. Conceptual review
Concept of Management by Objective (MBO)
Management by objectives is traceable to the period prior to the middle of this century but it was not until
1954 that it was well articulated and publicized by one of the world’s leading management thinkers in the
person of Peter Ducker. Thus, as a term, “Management by Objectives” was first used by Peter Drucker in
1954. As a management approach, it has been further developed by many management theoreticians, among
them Douglas McGregor, George Odiorne, and John Humble. The “Management by Objective” (MBO)
approach, in the sense that it requires all managers to set specific objectives to be achieved in the future and
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encourages them to continually ask what more can be done, is offered as a partial answer to this question of
organizational vitality and creativity. Management by objectives (MBO) 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 (Drucker, 1986).
Essentially, MBO is a process or system designed for supervisory managers in which a manager and his or
her subordinate sit down and jointly set specific objectives to be accomplished within a set time frame and for
which the subordinate is then held directly responsible. All organizations exist for a purpose, and, to achieve
that purpose, top management sets goals and objectives that are common to the whole organization. In
organizations that are not using the MBO approach, most planning and objective setting to achieve these
common organizational goals is directed downward. Plans and objectives are passed down from one
managerial level to another, and subordinates are told what to do and what they will be held responsible for
(Atkinson, 2005).
The MBO approach injects an element of dialogue into the process of passing plans and objectives from one
organizational level to another. The superior brings specific goals and measures for the subordinate to a
meeting with this subordinate, who also brings specific objectives and measures that he or she sees as
appropriate or contributing to better accomplishment of the job (Daft, Murphy, & Willmott, 2010). Together
they develop a group of specific goals, measures of achievement, and time frames in which the subordinate
commits himself or herself to the accomplishment of those goals.
Requirements for Setting Goals
Specific and difficult goals influence three key aspects of successful performance (Locke and Latham, 1979):
• direction of attention and effort towards task relevant behaviors and actions;
• investment of effort and energy in goal relevant behaviors;
• Persistence in goal related striving in the face of difficulties or obstacles.
The fundamental requirements of effective and successful goal setting require the following skills and abilities
and they are;
Performance Feedback
Goal setting and performance feedback go hand in hand. Without feedback goal setting is not effective
(Latham and Locke, 2006). Thus, in addition to selecting the right goals, managers should also listen to
feedback, so that you can gauge how well you and your team are progressing. Feedback provides opportunity
to clarify people's expectations and adjust the difficulty of their goals. Keep in mind that feedback doesn't
have to come from other people. Performance feedback can be provided on both the outcome and process of
goal related striving. Outcome related feedback relates to successful attainment or failure to obtain a desired
level of performance. Process related feedback can address effectiveness of performance strategies or plans
aimed at achieving a goal, as well as achievement of short term goals that represent incremental progress
towards the final goal. Process feedback has been identified as particularly important for complex or difficult
tasks. Setting specific and difficult goals for complex tasks may inhibit performance by encouraging a focus
on the desired outcome rather than the most effective strategies to reach that point (Locke and Latham, 2013).
Providing feedback on the effectiveness of task strategies can overcome this effect.
Goal Setting With Complex Tasks / Work Practices
Extra care needs to be taken with complex tasks regarding goal setting, commitment and feedback to ensure
that the overall effect on performance is beneficial rather than harmful. Task complexity is function of the:
• number of inputs associated with a task, including actions required and information cues to be attended
and processed;
• complexity of the coordination required between inputs, for example simultaneous processing of
information from a number of different sources and performing difficult physical actions in rapid
succession;
• degree and predictability of change in inputs and coordination requirements.
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Take special care to ensure that work doesn't become too overwhelming when goals or assignments are highly
complex. People who work in complicated and demanding roles can often push themselves too hard, if they
don't take account of the complexity of the task (Locke and Latham, 2002)
Goal Commitment
Goal commitment is defined as “the degree to which the individual is attached to the goal, considers it
significant or important, is determined to reach it, and keeps it in the face of setbacks and obstacles”(Latham
and Locke, 1991). It has been suggested that goal commitment interacts with goal difficulty in determining
performance. Specifically, with difficult goals, high goal commitment is crucial for high performance. With
easy goals, a high level of commitment does not result in high levels of performance since individuals will
tend to cease striving once the easy goal is obtained (Klein, Wesson, Hollenbeck, Wright & Deshon 1997). In
general, when averaged across all levels of goal difficulty, goal commitment is positively related to
performance (Klein et al, 1997). In the goal setting literature expectancy of goal attainment is commonly
operationalised in terms of self efficacy (Klein, Wesson, Hollenbeck, Wright & Deshon, 2001). To be effective
in securing team goal commitment in an organization, employees must understand and agree to the goals –
employee members are more likely to "buy into" a goal if they have been involved in setting it. Key
determinants of goal attainment attractiveness include participation in goal setting, provision of performance
feedback, self efficacy, peer pressure/group norms, and rewards/incentives.
b. Theoretical Review
Goal-setting theory refers to the effects of setting goals on subsequent performance. Researcher Edwin Locke
found that individuals who set specific, difficult goals performed better than those who set general, easy goals.
In 1990 Edwin Locke and Gary Latham presented a comprehensive theory of goal setting that remains the
predominant guiding model for research and practice in organisational psychology. Their theory has been
tested on a wide variety of tasks and with a multitude of professions including research scientists, production
line workers, nurses, sales representatives, executives, managers and office administrative staff. Goal setting
theory is founded on the principle that, with adequate levels of goal commitment and ability, performance
increases with increasing goal difficulty (Latham and Locke, 1991).This effect is greater for specific, difficult
goals compared to general“do your best” goals (Latham and Locke, 1991).
Goal setting theory is based on the simplest of introspective observations, namely, that conscious human
behavior is purposeful. It is regulated by the individual’s goals. Goal setting involves the development of an
action plan designed to motivate and guide a person or group toward a goal. Goal setting can be guided by
goal-setting criteria (or rules) such as SMART criteria. (Locke & Latham, 1990)
c. Empirical Review
Ofojebe (2011) did a research on relevance and benefits of management by objectives to secondary school
management in Anambra state: teacher’s views. The purpose of the of this study was to investigate the
statements of secondary school teachers on the relevance and expected benefits of Management by Objectives
(MBO) to secondary school management in Anambra State. Guided by two research questions and two null
hypotheses, the descriptive survey design was adopted. A sample of 1159 teachers was selected through
stratified random sampling technique from secondary schools in the six education zones in Anambra State.
The study utilized a 37- item researcher developed questionnaire structured on a 4-point scale. Mean scores
were used to answer research questions, while Analysis of variance (ANOVA) was used to test the null
hypotheses. The findings of the study indicated that the teachers irrespective of education zones were of the
view that all the elements of MBO are relevant and could be beneficial in achieving continuous improvement
in school management. Since the teachers considered MBO to be relevant and beneficial to school
management, it was recommended among other things that principals across the six education zones in
Anambra State should apply MBO for improved management of their schools.
Thompson, Luthans and Terpening (2015) did a research on The Effects of MBO on Performance and
Satisfaction in a Public Sector Organization. This field study examined the effects of MBO on measures of
quantity and quality of performance and satisfaction with the work and supervision among employees in a
human services agency. Although not all the quantity measures improved significantly, the combined measure
for quantity of performance and one of two quality measures showed significant improvement following
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implementation of MBO. Satisfaction with supervision also significantly improved but not satisfaction with
work. The study lends support to the use of MBO in public sector organizations.
Nwite Onuma (2016) did a research titled principal’s application of management by objective in secondary
schools in Ebonyi State, Nigeria The study examined principals’ application of management by objective in
the administration of schools in Nigeria. Six research questions and two null hypotheses guided the study. The
descriptive survey design was adopted for the study. The study sample comprised 204 principals. Data were
collected using a questionnaire titled application of Management by Objective schools. Data collected were
analyzed using mean (x) and standard deviation while t-test was used to test the hypotheses at 0.05 alpha level.
The findings showed that there was no significant difference in the mean ratings between the male and female
principals in the application of management by objective in schools. Secondly, there was a significant
difference between the mean ratings of urban and rural principals in favor of the urban principals. The study
recommended that Secondary Education Board should on regular basis organize seminar workshops for
serving principals highlighting the place of MBO in school administration.
King and Flak (2016) did a research whose objective was to present how management by objectives can be
used in measuring effectiveness of teams. The main elements of this method – goals and tasks – were used to
measure teams’work on the same project. The quantitative measurers of goals and tasks let assess an
effectiveness of teams and compare teams to one another. The methodology of the research was an experiment
conducted with on-line management tools named goaler and tasker based on the system of organizational
terms. This theoretical foundation represent system and positivist approach to management. However, this
approach was developed in the mix research method. This paper contains quantitative results and conclusions
about effectiveness of teams. For this purpose following measurers were used: numbers of goals and tasks in
each group, numbers of actions taken by team managers, duration of teamwork, number of goals and tasks
editions. Despite the fact that the method of management by objectives is thoroughly described and
parameterized, human contribution in the application of the method in practice appeared still crucial.
However, the originality of this paper comes from implementing online management tools which are based
on the system of organizational terms and using them to measure human behavior.
Islamia, Mulollia, & Mustafab (2018) did a research titled Using Management by Objectives as a performance
appraisal tool for employee satisfaction. This study deals with the importance of applying Management by
Objectives (MBO) method, as a method for performance appraisal (PA) in enhancing employees’
effectiveness. A self- administered questionnaire was used, the number of participants included the survey is
172 employees from 13 firms operating in Kosovo. The study aim is to identify the importance of creating
objectives, communication objectives, planning goals, setting control points, employees’ commitment to
determine objectives, freedom and independence in fulfilling duties, continuous communication, as steps for
realizing MBO method in employees’ effectiveness. The questionnaire of the study was prepared, the
responses obtained, the econometric model is constructed in order to test empirically this relationship, passed
through the IBM SPSS v.23.0 program has been utilized for the obtained findings. Results and proposals are
brought forward by the matched ttest, independent sample t-test, anova, pearson and correlation used as the
hypothesis tests. Econometric results suggested that MBO method should be used as a method of performance
appraisal as the employees’ effectiveness is enhanced. Also it resulted that the evaluation of individual
employees’ performance and a clear definition of results are the hugest parameters from all the other activities
of MBO method which we took in the study to raise employees’ effectiveness in organization
3.0 Methodology
This study is descriptive in nature as it seeks to describe the usual phenomenon in the field of management
while looking at management by objective as a focus. It will also look into the structural design of the study
by looking at the design of approaching the targeted respondents. In addition, this study will be quantitative
in nature as statistical approach will employed in presenting the report. The population of the study comprises
of the entire staff of Tuyil pharmaceutical limited, Ilorin which is Nine hundred and ten (910) respondents, a
sample of two hundred and forty-two (242) was drawn out using Guilford and Flusher (1973) formulae.
Primary source of data collection was used through a structured questionnaire. A structured questionnaire was
used as instrument of data collection. Data was analysed using coding and analysis of quantitative data with
descriptive statistics, frequency table and simple percentages while inferential statistics of analysis of variance
was used to test the formulated hypothesis in order to achieve the objectives of the research study.
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The table above shows the relationship between task complexity and organisation performance using one way
ANOVA. Analysis of data showed that the P value is less than 0.05, the null hypothesis is rejected while the
alternate hypothesis is accepted, and hence there is significant relationship between task complexity and
organisation performance. This implies that the level and degree of task complexity has significantly improved
the performance of the organization. This findings is consistently with the findings of Ofojebe and Olibie
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(2015), Thompson, Luthans and Terpening (2015), King and Flak (2016), Krueger (2016), and Islamia,
Mulollia, & Mustafab (2018) who concluded in their studies that there is significant relationship between task
complexity and organisation performance.
5.0 Conclusion
Vision, mission and objectives are tripods that organisations all around the globe pay maximum attention to
because of the relationship it has with the continuous existence of the organisation. profitability, productivity,
market share, maximisation of shareholders equity, growth and survival, market share, employee welfare etc
are objectives that organisations strives to achieve regardless of its type, nature or size. Management by
objectives in its ideal form operates in such a way that for the corporate goals to be realized, manager should
consult his subordinates in drawing up unit objectives, which goes up the hierarchy from where it is modified,
collected, approved and distributed throughout the organization. Thus, the totality of employee efforts must
all pull in the same direction and their contribution must fit together to produce a whole without friction and
without duplication of effort. This is the philosophy behind management by objectives. Based on the findings
of this study, it can be concluded that that there is significant relationship between goal commitments and
organization performance; there is significant relationship between performance feedback and organization
performance; there is significant relationship between task complexity and organization performance
6.0 Recommendations
Based on the findings of the study, the following recommendations are proposed
Organisation must ensure that they continually engage in best practices that will ensure that employees are
committed to the organisational goals. Thus, employees must be attracted to organisational goals and the one
of the key determinants of goal attainment attractiveness is participation in goal setting which organization
must emphasize on.
Organisation must continually ensure that performance feedback is enshrined in its corporate strategy and
organization culture since without feedback, goal setting is not effective. This is also in furtherance of the fact
that feedback provides opportunity to clarify expectations and adjust where necessary. Thus, performance
feedback of organisation must be one that emphasises on outcome related feedback which relates to successful
attainment or failure to obtain a desired level of performance as well as process related feedback which has
capacity to address effectiveness of performance.
Organisation must continually be abreast of environmental changes to find out more information on emerging
trends associated with a task, including actions required and information cues to be attended and processed,
complexity of the coordination required between inputs and degree and predictability of change in inputs and
coordination requirements. This will ensure that complexity associated with performing a task in terms of
inadequate information is addressed to a large extent.
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