At Edward Don & Company, a distributor of supplies and equipment for the food service industry, employees in the credit department know what they are supposed to achieve. The reason that the company's corporate credit manager, Jeff Ingalls, set up a management by objectives (MBO) program seven objectives for the year. They may change the next year's goals based on past performance or new technology that will affect performance.

Every thee to six months, Ingals mocts agan reminds the department that the objectives are important relative to total loans made, approving at least a minimum number of new accounts, and learning computer skills For collectors, objectives might inc Ingalls meets with each staff member once a year to evaluate bow well be or she met the previous years objectives and set objectives for the comine year He and the employer set five to with employees to discuss whether they are making progress toward their goals. Even when employees can meet their objectives without Ingalls's help, mecting widh thees Objectives for credit department emp ency, and development. For example, the objectives for a credit analyst might involve keeping bad debt low percentage of accounts that are current (payments up-to-date), r having trouble with a goal that involved the accuracy with which the educing the percentage for which payments are 90 days past doe, and leaning a nen hude achieving a gives increase n the to meet an objective, Ingalls and the employee discuss the problem and look for a way to resolve it For example, as accounts receivable supervzsor was a transaction known as cash applications. The supervisor's objective called for a much lower eror rate sor's employees recorded infoenmation. In an average moath, the supervisor's employees made 40 to 50 errors for recorded Ingalls and the supervisor set up a form on which the supervisor would record every cash application error. The supervisor recorded errors and idennified the cause of each error Most g it incorrectly. To fix these basic problems, the supervisor met with ocess demonstrated to the employees that their emors mattered s correcting etors, errors involved the employee receiving incorrect information or the ee receiving correct information but recording each employee who made an error, discussed the source of the problem, and asked the employee to be more careful. This pr productivity improved, helping Ingalls meet his own objectives them focus on how to reach those objectives while he focuses on broader issues facing the credat department to the range of 7 to 10 a month. As the department spent less time Ingals says he prefers working for organizations that use MBO He says MBO makes mansging employees caset Employes kow shat they ar suppound to achire so legals can Ant

1. Without MBO, would it have been harder for Ingalls to detect and correct the problem the supervisor was having with cash application esrors? Why or wthy no? fat all, might they help İngalls achieve his obiectives for the aedit department or contribute to the company seer all per on a ceo

3. Write a personal development objective for yourself Make sure it meets the eriteria for effective objectives shown in Figure 6 1 Show your objective to a friend or classmate, and discuss with that person how you plan to achieve your objective.

Answer rating: 100% (QA)

1 Yes without MBO it would have been harder for Ingalls to detect and correct the problem the superv... View the full answer