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Abstract
Purpose - In order to lead and control large organisations, top managers could use objectives as an integrative mechanism and a driver of change. This paper aims to study the overall volume target of Volvo Cars regarding the consequences it has on organisational practices.
Design/methodology/approach - Interviews with relevant managers at Volvo Car Corporation were conducted.
Findings - Different interpretations of a seemingly clear objective, different views on both the rationale for and possible direction of the needed change and an increasing gap between middle and top managers are organisational responses to the demanding volume ambition. The response from the interviewed managers was more emotional than expected, resulting in an overall sense of target fatigue in the studied organisation.
Research limitations/implications - The study suggests that the lack of academic research interest in the management by objectives (MBO) discourse is misleading. Rather than dismissing MBO as what is an outmoded management fad, management researchers should examine how MBO is used in practice.
Practical implications - Organisations rely on objectives, but such objectives need to be translated into detailed actions by top management. The creation of meaning and actual means to fulfil the targets is an important dimension to consider for managers wanting to manage the organisation by using objectives. Organisational context and cultural obstacles must not be neglected.
Originality/value - The paper offers a unique insight into how a major automotive company deals with long-term objectives. In addition, the paper calls for a renewal of research on MBO.
Keywords Management by objectives, Organizational planning, Change management
Paper type Research paper
Introduction
Large organizations are complex. In order to co-ordinate the activities of complex organizations, top management make use of long term objectives and strategic intents in order to integrate what is differentiated and disperse. In large organizations, such objectives serve as integrating mechanisms that creates sense, meaning and coherence in what is cognitively complicated to capture by individuals. The use of long-term objectives can also affect another sense in an organisation, that of frustration and fatigue, leading to reduced effectiveness.
The study reported in this paper shows how management by objective (MBO), in this case the growth of sales volume at Volvo Cars, no matter how clearly communicated and well defined such objective...