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CSEET · Business Laws and Management · Introduction to Management

Sundaram Textiles introduced MBO. In the first year, the production head and his manager agreed on targets, but during the year the manager never reviewed progress and revised no target even though cotton prices changed sharply. At year-end, ratings were based only on the original targets. Which MBO weakness is best illustrated?

The weakness illustrated is the absence of periodic review and feedback. MBO needs progress to be monitored and targets adjusted when conditions change, but here the manager never reviewed progress and appraised only against outdated targets despite the sharp change in cotton prices.

  1. ALack of a clear statement of objectives
  2. BAbsence of periodic review and feedback during the cycleCorrect
  3. CExcessive participation of subordinates in goal setting
  4. DOveremphasis on qualitative measures

Explanation

Targets were agreed jointly, so goal setting was present. The failure is that there was no mid-cycle review or feedback and no revision for changed conditions. Option C is wrong because participation was not excessive; the problem is the lack of monitoring.

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