Management by Objectives: The Supervisor's Role in MBO in China

Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 MANAGEMENT BY OBJECTIVES: THE SUPERVISOR'S ROLE IN MBO IN CHINA1 Huan Mo Guangzhou University China Mike Berrell James Cook University Australia Abstract Management by Objectives [MBO] is now a recognized management tool. Studies on MBO have focused on aspects of the process, including such fundamental components as goal setting, participation, and feedback (Rodgers & Hunter, 1991). However, the success of MBO also depends on effective implementation strategies (Stein, 1975). This paper examines the concept of MBO in a cross-cultural setting, using a postmortem study of goal setting and implementation among two groups of Chinese undergraduate management students in Guangzhou. ln addition, we reference a small study of goal setting by Chinese business school academics in Guangzhou and highlight the implementation strategies used by these groups in the pursuit of their goals because goal setting alone cannot guide either Chinese management students or academics in MBO in the light of the influence of the high-context Chinese culture. In China, one must consider the role of the supervisor (one's immediate manager or line supervisor) in MBO because the strength of social capital that binds supervisors and workers can affect a worker’s level of perseverance and goal setting behaviour. In these circumstances, the supervisor's role is a determining factor in the success of MBO in Chinese settings. INTRODUCTION Management by Objectives [MBO] is a widely used management tool in both Western and Asian countries, including China (Sun, 2000). Although MBO improves productivity (Rodgers & Hunter, 1991; Kondrasuk, 1981), it is not without its critics (Matthews et al., 1994). For example, a focus on the self may be at the expense of improving team-based activities. In other circumstances, MBO can stifle individual creativity and reduce innovation capacity (cf. Shalley, 1991). Moreover, the greater the level of complexity in a task, the more risk exists in the process (Wood & Mento, 1987). Estimating the amount of effort an individual will devote to the process is also problematic in organizations because of the multiple factors that come to bear on one's success or lack thereof. At the macro level, MBO is a highly dynamic process. Its success is contingent upon factors such as the level of management support, the complexity of the management structure, and the amount of change present within an organization. At the micro level, personality factors come into play. Issues of self-efficacy may impinge on the process. Nevertheless, the history of MBO suggests it is more likely to result in success than failure (Kondrasuk, 1981). More recently, Trompenaars and Hampden-Turner (2004) included additional ideas about aspiration and attainment to inject new dimensions into MBO in cross-cultural organizations. BACKGROUND TO THE DEVELOPMENT OF MBO In its basic formulation, MBO is a process of joint objective setting between workers and line managers, although it can include any superior-subordinate relationship within an organization. With performance outcomes in mind, appropriate objectives for the MBO process include: (i) those that target the key results areas, (ii) timelines for achieving specific results, (iii) realistic and attainable outcomes, and (iv) specific and quantifiable outcomes in the context of various contingencies (Schermerhorn et al., 2004). Employees at all levels of the organization should accede to measurable interlinked goals being set and implemented. For example, a goal of the CEO seeking to maximize 'returns on investment' becomes a 'cost containment' goal of the manufacturing division (Bounds et al., 1995). 1 Some minor editorial changes have been made to the text of the original paper. Page | 1 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 By the early 1990s, the literature on goal setting in MBO was prolific, including explorations of the relationships between goal setting, improved performance, and productivity (Earley & Wojnaroski, 1987; Earley & Lituchy 1991; Ollenbeck & Klein, 1987; Locke et al., 1988). In addition, other studies identified the influence of unpredictable factors on the achievement of outcomes (Earley et al., 1989; Gilliland & Landis, 1992; Kanfer & Ackerman, 1989; Wood & Mento, 1987). A problem, however, is that goal setting per se and MBO have become synonymous. As a component of MBO, goal setting establishes carefully targeted objective in the light of the criteria necessary for measuring and assessing the outcomes in the context of associated rewards. The straightforward task of setting goals entails negotiating and tapping a complex matrix of elements in ways that cater for not only the specific circumstances of the individual but also those of the organization. In this complex milieu, the goal setting process is not in itself sufficient to produce a desired outcome. MBO requires oversight of the resources of both individuals and the organization. For individuals, motivation, selfefficacy, temperament, and personality all come into play to influence the level of achievement. At the organizational level, timelines, managerial support systems, managerial skill, and organizational resources are important for the success of MBO. In the 20-year period following Peter Drucker's (1954) use of the phrase management by objectives, the concept produced positive outcomes related to an organization's performance and productivity (Rettig & Amano, 1976). In the subsequent decades, however, researchers indicated weaknesses in the process, suggesting that: ▪ Managers were prone to view MBO as primarily a goal setting activity ▪ Organizations failed to treat MBO as a holistic process ▪ The manager's role was either ill-defined or ill-conceived Against this telling background, MBO required a clear connection between the activities of workers and managers; this necessitates developing a set of agreed and measurable goals, "time bounded, and joined to an action plan". Other pitfalls in MBO occur when goals lose their appeal as the process unfolded or when managers lack the requisite skills to facilitate the process. In other circumstances, important duties at the workplace may be set aside in the relentless pursuit of identified goals. Attention to the processes of goal setting and implementation are essential components of MBO. Goal setting alone cannot ensure that individuals will pursue these goals. This is especially the case when complex goals are set over a lengthy period (Rodgers & Hunter, 1991). Issues concerned with implementation, participatory decision-making, the provision of feedback, appraisal techniques, management support, and resource allocation all affect the viability of MBO (Matthews, et al., 1994, Rodgers & Hunter, 1991; Stein, 1975, 1986). However, concerns remain in the literature about the implementation stage of MBO. While MBO is a self-managing process, managers cannot become bystanders once the goals are set and the process implemented. The manager's role emerges as critical in MBO, especially in complex organizational settings where the influence of either national or organizational culture comes into consideration. In China, the concept of MBO is a recognized management tool used by both international strategic alliances and Chinese organizations with varying degrees of success (Sun, 2000). This cursory review of two examples of MBO highlights the importance of the role of the immediate supervisor in the process and suggests that the strong involvement of supervisors is one of the most critical aspects of MBO. In this context, the cultural architecture of Chinese organizations emerges as a crucial factor, as reflected in the two propositions below. PROPOSITION ONE Effective goal setting alone in MBO is insufficient to engender success in Chinese organizations While goals setting and attainment are positively related to improved performance (Mitchell & Siler, 1990), goals also have negative effects on performance in complex and independent tasks. However, in such cases, positive outcomes can eventuate when manages extoll workers to simply “produce their best work” (Earley et al., 1989; Huber, 1985; Wood & Mento, 1987). Mitchell and Silver (1990) suggest that complex tasks are problematic in MBO because goals can skew an individual's plan for a particular task (Huber, 1985). For Earley et al. (1989), gains in performance depend on the appropriateness of goals and tasks, the level of motivation present, and the soundness of strategic intent. The issues of persistence and focusing attention are motivational in substance and depend on a person's perceptive capacity and willpower. Other contingent factors include the range of stimuli present in the Page | 2 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 environment, the type of encouragement provided, the level of feedback given, and the level of organizational support. Any excitement and commitment originally generated by the initial goal setting process quickly fades without the appropriate inducements. In the Chinese context, Hofstede (1994) warns that the high context nature of Chinese society works against using MBO without accommodations to suit the setting. Researchers now seriously question the direct transferability of Western management knowledge to non-Western settings (Hofstede, 1994). According to Berrell et al. (2001), the efficacy of Western management tools applied to Chinese organizations is problematic because of the pervasive influence of China’s cultural architecture, which produces distinct cultural ways of knowing and doing. These differences result in unique orientations to ideas about MBO. The method of disseminating ideas about something new like MBO needs to recognize Chinese learning styles, which require the extensive use of exemplars. It is fundamental that supervisors link the future outcomes of MBO directly to behaviour in the present. Practicality emerges here as an important consideration because Chinese people are reticent to contemplate an ambiguous future. In MBO, it is essential to link future gains to practices in the present. An array of literature documents the surface and deep level differences between the worldviews of Chinese and Westerners managers and workers (Adler, 2002). The Chinese cultural architecture shapes thinking about collectivism, group norms, and social capital in a society where the Confucian tradition is deeply embedded ((Adler, 1997; Jackson & Bak, 1998; Mead, 1994). Drawing on the literature in the field, there is little doubt that even the more apparent differences in the worldviews of Westerners and Chinese will impact significantly on the implementation of MBO in Chinese settings. PROPOSITION TWO Individuals in China are motivated more by the strength of their relationship with their manager than by anything intrinsic to the process of goal setting The Chinese cultural architecture has a significant impact on MBO, especially considering the extensive networks of social capital and associated relationships like guanxi and renqing. In particular, the strength of the social capital existing between supervisors and those under their care is a strong motivational force in China. For Miles (2000), this relationship includes feelings of fondness and mutual respect at a personal level rather than at a managerial level, and in the pursuit of management work, these feelings impact behaviour. In Chinese organizations, commitment often depends more on the charm of a manager than on the organizational system itself. This is because a manager's personal attributes can be a more powerful motivating force than that of legitimate authority (Mo & Berrell, 2004). Chinese workplace behaviour is a big consumer of social capital and the personal relationship between managers and subordinates is strategically important, and something to tap when implementing MBO. Chen, Tsui, and Farh (2002) reinforce this proposition, suggesting that managers are effectively agents of their organization, interacting personally with workers. This entails ‘enacting the formal and informal procedures of organized activities' when initiatives such as MBO are undertaken. A POSTMORTEM OF GOAL STTING In the first example, it came to our attention that two similar cohorts of Chinese undergraduate management students in Guangzhou had achieved significantly different outcomes in a standard English qualifying exam. China requires undergraduates to pass the 4th level exam in the College English Test (CET-4). Authorities also encouraged students to pass the 6th level exam (CET-6) before they receive their bachelor’s certification. However, in this study, the university would not allow students to take the CET-4 until they completed 18months of their course. The discrepancy in the CET-4 results caught our eye in the context of MBO and we conducted a MBO postmortem on each of the cohorts to determine if implementation strategies played a role in the outcomes. The exam in question is strategically important for all students and passing the exam is a fundamental goal for both the students and the university. This is a high-profile exam with considerable consequences for those who fail. One would expect that the exam is exceedingly high in popular consciousness. The university chooses students according to their attainment in the College Entrance Examination. In this light, each cohort had similar experiences and was of comparable academic ability. In the English program for the Page | 3 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 CET-4, each cohort had studied in the same course with the same teacher for an 18-month period. In the undergraduate specialization of Human Resource Management, 101 students were randomly allocated into two classes, Group A (n=50) and Group B (n=51). The university (faculty/ division) attached a teacher-in-charge (the class manager) to each cohort during their passage through university. This class manager was responsible for the overall pastoral care of a group. While passing the CET-4 is high on the agenda of students’ goals, in the initial sitting of the CET-4, 61% of Group A passed while only 32% of Group B passed. Experience suggests that a pass rate of 55% is possible at the first sitting. This discrepancy attracted our attention concerning goal setting by students and implementation processes relevant to each group. As passing the CET-4 was an explicit goal of all students, we expected that the class manager and the students would seek ways to realize this particularly important goal. Following revelation of the CET-4 results, we invited the two class managers to respond to the questions below (translated from Chinese): 1. How often did you meet with your students (group) during the last 18 months? 2. How often did you mention the CET-4 and urge your students to achieve the goal to pass? 3. Did you meet with students individually and provide individual attention in their efforts to study for the CET-4? We also invited students in both groups to respond to questions about aspects of how they experienced their class manager’s style and suggest reasons for their own success or failure in the CET. In addition, students could nominate the type of help they preferred to receive from their class manager. The questions, excluding demographic questions, are set out below (translated from Chinese): 1. When did you become aware of the important goal of passing the CET-4 within the four years of your course? 2. Did you set passing the CET-4 as a major goal of your study? 3. How often did your class manager mention the CET-4 and urge you to work on it? 4. Did you get individual attention from your class manager about preparing for the CET-4? 5. What do you think contributed to your success or failure in the CET-4? (responses rank ordered in terms of utility). 6. What kind of help did you want from your teachers and class manager to assist you in passing the CET-4 or the CET-6 at the second sitting? (responses rank ordered in terms of utility). Data gathered from both the class managers and students confirmed that students understood early on that “challenging work” was ahead if they were to pass the “important CET-4” within four years. In fact, both class managers stressed strategic importance of the CET-4 at their first point of contact. While most students established “passing the CET-4” as a “major goal”, the management style of the class managers differed appreciably. Group B’s class manager met students "every few months" and rarely mentioned the CET-4 following the initial contact. In contrast, the class manager of Group A drew attention to the CET-4 on average “every second week”, while simultaneously urging students to “focus on the English work and prepare hard for the examination time”. In addition, the class manager of Group A offered opportunities for students to meet individually and encouraged then regularly to seize this learning opportunity. About 90% of Group A students who successfully passed the exam emphasized that although they "felt stressed", they appreciated the “need for urgency in their studies”. Both parents and university teachers also encouraged those students to succeed. In the Chinese context, the term “stress” translates as a form of dynamic tension or the deeper need to achieve in the face of important goals. Of the students who failed, 86% indicated that “less hard work” and “poor foundations in English” were main factors in their non-achievement of their goal of passing the CET-4. However, 50% of these students failed to “feel a sense of urgency”, and therefore “did not study hard in English until two or three weeks before the CET-4”. They had not received prompts on a regular basis reminding them of their goals. Overall, most students who failed wanted “more language exercises” and “more time and contact” concerning specific information that would help them pass either the CET-4 or CET-6 the second time around. However, concerning the role of the class manager, 55% of students in Group B specifically mentioned that their manager “could remind us more about the exam” and “encourage us often”. Given the reluctance of Chinese students to direct criticism at the class managers, this response is particularly telling. We can expect that Group A class manager strove to deliver assistance of this type. Page | 4 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 In the second example, one author conducted a postmortem study of goal setting and the role of the supervisor in this process at another university setting. This study sought the views of a stratified sample of 12 university lecturers in Guangzhou, who had occupied their present academic positions on average for 10 years. This timeframe meant goal setting was extremely important in the context of this group realizing their aspirations for promotion. According to the policy at the time operating in the university, lecturers could normally apply for promotion following five years in their present position. In this context and given the increasingly competitive nature of higher education in China, we might expect that goals setting, and their implementation would be high on the agenda of this group. The lecturers responded to an email questionnaire and were subsequently briefly interviewed by the author via telephone, which revealed that nine of the 12 had aspired to become full professors, all had a mid-term goal of achieving promotion to the next step, and nine of the twelve had the short-term goal of publishing one paper in the coming year. Responses to the propositions on the survey are show in Table l. All lecturers confirmed that they had established clear career goals at the start of their university careers. Table 1. Responses to 11 propositions concerning goal setting P Item D N A SA 1 It is too difficult to author research papers* SD 1 4 5 2 2 It is too difficult to publish finished papers 2 2 6 2 3 I am not eager to get to the next position 1 2 1 4 I do not often reflect my goals for promotion 1 2 3 6 2 4 6 stressed# 5 I feel position 6 I feel stressed when filling out academic productivity statements 7 I feel stressed when applying for promotion 8 I feel stressed when my peers achieve their promotions 9 I feel stressed when my ‘leader’ emphasizes research and evaluation criteria 10 I will reduce my effort if my supervisor does not enquire about, check up on my progress and/or monitor my work 11 I will slacken-off without stimulation (from the environment) 8 when my supervisor discusses my research and academic 1 4 8 1 3 4 4 1 3 3 4 3 3 6 1 3 3 5 1 4 3 4 (n=12); Five-point scale where SD=strongly disagree; D=disagree; N=neither agree nor disagree; A=agree; SA=strongly agree; * translated from Chinese; # again, translated as dynamic tension or the deeper need to achieve in the face of important goals While most lecturers had noticeably clear career goals, three out of four unfortunately failed to reflect on these goals. The vast majority also felt stressed when their supervisors openly engaged in conversation about their goals. Three quarters of the lecturers also experienced stress when their supervisors emphasized goals in meetings. All lecturers acknowledged feelings of stress when productivity reports were due. Similarly, lecturers also felt stressed as the promotion time approached. We might conclude that when one’s peers gain promotion, the individual concerned would think more meaningfully and deeply about their own prospects of promotion. However, about 70% of the lecturers indicated the need for ‘supervision’ to be productive. The responses support the general view that Chinese organizations are a special case for appropriate goal setting and implementation in MBO. It seems that external motivation through social capital is a crucial factor in one’s capacity to persevere with goals. The subsequent interview with lecturers indicated that the motivation for setting goals depended on a combination of factors. For example, these factors included the rules of the university concerning promotion, the competition from peers, and self-actualization all came into play. However, certainly “feelings of embarrassment” also came to the surface when supervisors discussed the lecturer’s goals or highlighted their contribution to research during meetings. Similar feelings arose during the process of filling out productivity forms. However, following such events, the lecturers indicated that they again generally set an agenda for promotion but would slacken-off without external impetus. This certainly explains why lecturers had been at their posts for 10 years or more. In fleshing-out the reasons why their goal setting behaviour had not delivered positive outcomes, lecturers offered explanations, condensed below according to internal and external factors. Page | 5 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 Internal Factors ▪ Poor time management ▪ Self-efficacy about research ability ▪ Difficult of the lecturing task ▪ Teaching as an independent activity is remote from supervisors and peers ▪ Initial embarrassment about lack of research outcomes diminishes over time and consequently, pressure also wanes External Factors ▪ Limited stimulation from the workplace ▪ Lack of training ▪ Heavy teaching load ▪ Supervisors did not encourage the achievement of goals ▪ Supervisors failed to emphasize importance of research productivity ▪ Previous supervisor was not too concerned about research ▪ No “personal” advice provided from supervisors Concerning external impetus, the role of the supervisor emerged as a principal factor in the goal setting success of lecturers. This feedback suggests that supervisors could upgrade their management toolbox to improve the process. However, from another standpoint, the supervisor's role or lack thereof was employed by poor academics to deflect their own deficiencies in the process. Nevertheless, we suggest that the supervisor's role emerged as fundamental in the goal setting and implementation process from the point of view of the lecturers. For lectures to achieve their goals, supervisors must assume an initiative-taking role during the implementation phase and address any inhibiting factors in the process of MBO. CONCLUSION This paper is limited in its scope and depth. Nonetheless, the postmortem revealed that goals setting, and the implementation period were both strategically important for students as well as the lecturers in the two examples provided. In both cases, while individuals may be aware of certain important goals, goal setting alone does not guarantee success in complex settings like university classrooms or faculties. The tensions over goal setting persist for various periods depending on the environment and/or the organization in question. When appropriate stimuli are present in MBO, individuals tend to persevere, but without these stimuli, individuals lose track of their goals. In both examples when the focus on goal attainment was on-going, positive outcomes ensued. Nevertheless, further studies on the supervisor’s role in the attainment of goals set by individuals will contribute to the literature of MBO in different national cultures. In conclusion, the following activities are critical success factors for MBO in the Chinese context: ▪ Linking future goals to activities in the present ▪ Developing and monitoring timelines for implementation ▪ Establishing goals that are time-bounded and connected by a robust action plan ▪ Providing exemplars for action ▪ Appointing supervisors who will become actively engaged in monitoring the implementation process Given the positive role of the supervisor in mentoring those who set their goals, the supervisor's commitment to the processes of MBO is an essential success factor. Therefore, in China, we expect individuals will collaborate more productively with skilled supervisors who motivate their subordinates to persist in the process of achieving their goals. This brief postmortem study also indicates that the role of supervisors in MBO is particularly important over longer periods. While goal setting itself helps individuals focus on important goals and persevere in the process, the extent to which this behaviour persists over time is determined by the strength of the social capital between supervisors and subordinates. Without tapping the strong social capital inherent in the role of the supervisor, MBO in China will not deliver its full potential. Page | 6 Proceedings of ASBBS 7th International Conference, Cairns Australia 6-7 August 2004 References Adler, N. (2002). International dimensions of organizational behaviour, 4th ed. Cincinnati, South-Western College Publishing, Thomson. Bartlett, C., S. Ghoshal, & J. Birkinshaw (2004). Transitional Management: Text, Cases, and Readings in Cross-Border Management, 4th ed., Boston: McGraw Hill- Irwin. Berrell, M., M. Gloet, & P, Wright (2002). Organisational Learning in International Joint Ventures: Implications for management development, Journal of Management Development, 21(2), 81-100. Berrell, M., J. 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