Individual sections of a company

The introduction can begin gradually in individual parts of a company. It takes place without compulsion, since otherwise the principle of goal agreement is violated. MbO recommends itself in the course of time for imitation. The forced takeover of MbO due to exaggerated perfectionism can lead to failure.

The minimum period for the introduction is about 18 months.

The following aspects are to be considered with MbO particularly:
■ Corporate goals and personal goals are as far as possible not reconciled by specification, but by agreement, otherwise the driving force of the goals is lost.
■ The goal formulation must be precise. Difficulties can arise in formulating quantitative objectives.
■ Goals must not become an end in themselves, but are constantly checked for their relevance, otherwise they will become obsolete unnoticed.
■ Integrated goals between departments – ie horizontally – are defined in addition to the goal setting between boss and employee.
■ It is necessary to have agreed target areas, areas of responsibility and authority and a corresponding qualification of the employee. Management by Objectives lives from the delegation.
■ The executive does not rule in the target area of the employee. MbO therefore also requires the addition of Management by Ex-ception to determine the discretion of the employee. So you can meet even unforeseen developments.
■ The individual’s share and the group’s share in achieving the goal are included in a performance appraisal: goals set the behavior in motion, and the consequences for achieving the goals keep it going.
■ Managers become free for management tasks. Lonely decisions and individual instructions become obsolete. Since the results are controlled on a maturity-specific basis at agreed (interim) dates, the remainder of the control is delegated to the employee in the form of self-monitoring and result control.
■ Employees have their own discretion and are more demanding. The target identification motivates to own management thinking.
■ Learning processes of the participants are taken into account.
■ Performance assessment and personnel development can be based on clear goals.
■ The profit center is especially suitable as an organizational form, as it contains separate accounting areas.

Leading through the agreement of precise goals is much more time-, energy- and cost-saving than the guidance by means of individual instructions and task description.

Closely related to MbO is Management by Results, which can also be translated with results-oriented guidance. Result analyzes in all areas are starting points for future goals. Product analysis (profitable and unprofitable products today and in the future) and cost control aim to focus the company on profitable areas (a hospital deficit limit).

Management by Delegation

Management by delegation or leadership by delegation of responsibility and decision-making powers (Harzburger model or “leadership in the employee relationship” after the founder Reinhard Höhn) wants to abolish the style of leadership by command and individual order.
Each employee receives their own delegation area, in which the objectives, competences and responsibilities to be achieved are met. The employees are self-employed within this area. Decisions are made at the level to which they belong. Managers who are also employees of other executives perform
both managerial and administrative tasks. The manager bears management responsibility for the management tasks. The employee bears the responsibility for the tasks. The executive does not accept responsibility from the employees. The employee does not delegate responsibility back to the executive.

Exceptional cases are discussed by the employee with the manager. To ensure these requirements, MbD has an extensive management system.

People lead people

Menschenbilder: Two extreme positions
Whether supervisors (and employees) can absorb and live up to their role requirements depends very much on the image of humanity that the leader has of the leader. To illustrate this, we are listing two extreme positions by formulating assumptions that lead to two theories: Theory X and Theory Y.

Theory Y

■ Stimulating oneself physically and mentally is just as much a part of the human being as the play instinct. Moreover, the work can be both satisfying and disappointing.
■ External control and the threat of punishment alone are not sufficient to induce a person to reach certain goals. Man prefers to assume responsibility for himself and a certain amount of self-control within the target system with which he identifies.
■ Under normal conditions, man not only accepts responsibility, he even seeks it; Aversion to responsibility, lack of ambition and prevailing safety thinking are consequences of the experience, but not characteristic of humans.
■ Imaginative and creative are found among people far more than initially suspected
■ The intellectual abilities of the average person are only partially used.
Leadership Styles: Two Extreme Views

From the two admitted extreme human images of the theory X and the theory Y can be derived two opposite basic principles of leadership.
Of course, neither human image and understanding of leadership X nor the image of man and the understanding of leadership will ever occur anywhere in pure culture; they are also not polar in the sense of good and bad – the cynical picture of the theory X is as far removed from reality as the idealistic picture of the theory Y.

These are extremes which, however, are very well suited to understanding the scope in which human image and understanding of leadership reside.