MANAGEMENT BY OBJECTIVE & ITS APPLICATION IN TOURISM

SECTOR

By- Ayush SaxenaT.T Section A

Objectives of this presentation

To understand what is Management by Objective To learn the process of MBO as to how it can be

implemented in an organization or sector To know about the advantages and disadvantages of

MBO To understand its application in tourism sector

through a case study.

Introduction to MBO

Management by objectives can be defined a process of defining objectives within any organization which is agreed to be followed by the management and the employees and understand what they need to do in order to achieve those goals

It can also be defined as a approach which is systematic and organized in nature that allows us to focus on achievable goals and attaining them with minimum wastage of resources

Introduction Continued…

This concept of MBO was first brought into notice by Peter Drucker in his book “The practice of management” in 1954.

This approach is also known by other names such as 'Management by Results' (MBR), 'Goal Management', 'Results Management'. Today, MBO is used not only as a technique of goal setting but also as a total system of planning, motivation, performance and appraisal.

MBO ProcessCan be described in 5 simple steps:-

Setting Objectives- The basic step of any organization is to set achievable objectives for themselves and must be thoroughly understood by the managers as well which would allow them to forecast their future expectation for their business.

Cascading Objectives to employees- This step involves the communication of organizational goals to their subordinates and employees effectively, which would make achievement of objectives easy.

Process continued.. Monitor-This step of MBO mainly involves monitoring

and analyzing of whether the work is being done correctly in order to achieve their final objective.

Evaluate Performance- After every certain point of time worker’s performance is judged on the basis of the work done by him/her in order to achieve the objective

Reward Performance- After evaluating the performance certain rewards must be presented to the worker according to their performance in achieving objectives in order to keep them motivated for future.

Advantages of MBO Improvement of managing through result-oriented

planning. Clarification of organizational goals, structures of

authority according to the result expected. Encouragement of personal commitment to their

own and organizational goals. Development of effective controls, measuring

results, leading to corrective actions. MBO programs continually emphasize what should

be done in an organization to achieve organizational goals.

Disadvantages of MBO

MBO suffers from the following disadvantages also- It takes few years to be effective. Some companies always tend to raise goals. If these

goals are too high, employees get frustrated. Appraisals are sometimes made on personality traits

rather than performances. Some employees do not want to be held responsible

and the goals forced upon them may lead to ill-feeling

Case Study- Kerala’s results ‘Effects of Change’

A 357 per cent increase in its domestic tourist arrivals, from 1.284 million in 1994 to 5.871 in 2003 that earned for the state the ‘Award for

Excellence in Tourism’ from the Government of India for four years between 1999 and 2003.

A 25.7 per cent increase in its foreign tourist arrivals, and a rise in its share of Indian’s international visitors, from 5.5 per cent in 1994 to 10.98 per

cent in 2003.

A 747 per cent increase in its tourism receipts, from Rs.116 crore in 1994 (1.63 per cent of India’s receipts) to Rs.983 crore in 2003 (4.97 per cent of

India’s receipts).

An increase in the average duration of stay of an international traveler to Kerala from a mere 1.5 days to 14.1 days.

Analysis of Case StudyAs already seen in the case study, there has been drastic growth found in kerala

tourism in a space of just 9 years and several measures were involved in achieving so by the kerala tourism development corporation(KTDC).

How MBO is applicable in this case study?After evaluation by the experts it was known that kerala tourism undertook the Six

S framework of the National tourism policy which included:- SWAGAT- Meant for hospitality SOOCHNA- Meant for information SUVIDHA-Meant for facilitation SURAKSHA- Meant for safety/protection SAHYOG- Meant for cooperation and coordination with locals SANRACHNA-Meant for infrastructure.All these Six S of NTP can be included as a part of Management by Objectives as

all involves same process as of MBO, where government act as the managerial level and the locals of kerala work as the employees or subordinates in order to achieve the objective of receiving maximum tourist with least consumption of limited resources.

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