MGT503 Lecture 24 Summary MCQs

📘 MGT503 – Lesson 24 Management by Objectives (MBO) 🔹 Lecture Summary (Short & VU-Focused) Management by Objectives (MBO) is a systematic and collaborative goal-setting process in which managers and employees jointly set goals, periodically review progress, and reward performance based on goal achievement. The concept was introduced by Peter Drucker. Time Span of Goals and Plans Strategic goals/plans: 3–5 years Tactical goals/plans: 1–3 years Operational goals/plans: 1 week to 1 year Characteristics of Well-Designed Goals Effective goals are: Outcome-oriented Measurable and quantifiable Time-bound Challenging but attainable Written and documented Communicated to all relevant members Steps in Goal Setting Review the organizational mission Align goals with mission Evaluate available resources Determine goals (individually or collaboratively) Write and communicate goals Review results and progress Contingency Factors in Planning Planning depends on: Manager’s level (lower = operational, higher = strategic) Environmental uncertainty (higher uncertainty → flexible, short-term plans) Length of future commitments (plans must cover commitments already made) Traditional Goal Setting Goals are set top-down and passed to lower levels. While it creates a means-end chain, clarity often decreases as goals move downward, leading to misinterpretation. Pitfalls of Goal Setting High stress Ignoring non-goal areas Short-term focus Reduced self-confidence Dishonesty or cheating Key Elements of MBO Goal specificity Participative decision making Explicit time period Performance feedback MBO Process Organizational goals → departmental → individual goals Action plans developed Responsibility assigned Performance appraised (usually annually) Rewards given for achievement Strengths of MBO Improves coordination Clarifies priorities Enhances communication Increases motivation Weaknesses of MBO Requires strong top management support Needs extensive training May be used as punishment Overemphasis on quantitative goals Despite its strong philosophy, MBO succeeds only 20–25% of the time, mainly due to weak leadership support and poor communication. 📝 20 MCQs (VU Paper Pattern)

Q1. Strategic goals usually cover a time span of:

1. 1 year
2. 1–3 years
3. 3–5 years
4. 10 years

✅ C

Q2. Tactical goals typically involve:

1. Less than 1 year
2. 1–3 years
3. 3–5 years
4. More than 5 years

✅ B

Q3. Operational goals may range from:

1. 1–3 years
2. 3–5 years
3. 1 week to 1 year
4. 5–10 years

✅ C

Q4. Well-designed goals should be:

1. Vague
2. Informal
3. Measurable
4. Flexible only

✅ C

Q5. Goals written in terms of results are called:

1. Activity-based
2. Outcome-based
3. Directional
4. Informal

✅ B

Q6. Reviewing the mission is part of:

1. Controlling
2. Staffing
3. Goal setting
4. Organizing

✅ C

Q7. Which factor affects the nature of planning most?

1. Age of employees
2. Environmental uncertainty
3. Salary structure
4. Office size

✅ B

Q8. When uncertainty is high, plans should be:

1. Rigid
2. Long-term
3. Specific but flexible
4. Ignored

✅ C

Q9. Traditional goal setting flows:

1. Bottom-up
2. Top-down
3. Horizontally
4. Randomly

✅ B

Q10. A weakness of traditional goal setting is:

1. Participation
2. Clarity at lower levels
3. Loss of unity
4. Motivation

✅ C

Q11. The means-end chain links:

1. Strategy to control
2. Goals to rewards
3. Higher-level goals to lower-level goals
4. Mission to vision

✅ C

Q12. Which is NOT a pitfall of goal setting?

1. Increased stress
2. Dishonesty
3. Improved teamwork
4. Short-term focus

✅ C

Q13. MBO was introduced by:

1. Fayol
2. Taylor
3. Mayo
4. Drucker

✅ D

Q14. In MBO, goals are set:

1. By top managers only