Management Philosophy Approaches: MBO, Ethics, and Strategy

Introduction to Management Philosophy

Management's principal characteristic is the directing and leading of people and resources toward the achievement of predetermined objectives. An organization runs and operates based on defined specific objectives, and the role of management is to direct efforts and resources toward the achievement of those objectives. Over the decades, different management approaches and strategy formulations have been proposed in an attempt to find the most suitable approach that can effectively and sustainably guide organizations toward their goals. This paper summarizes management philosophies and approaches proposed by different scholars, identifies the different opinions on management, and reviews the theories proposed on management thought.

Management by Objectives and Mission-Driven Management

Of particular interest is the article by Kralev (2011), which identifies the importance of the Management by Objectives (MBO) approach. Kralev proposes this management philosophy because it defines and uses organizational objectives to direct processes and functions within an organization. Kralev (2011) identifies that in today's business world a manager should lead by emphasizing organizational objectives that are directed toward the broader environment, achieving profits, and defining paths of operations. He further argues that the core concept of MBO requires that the management processes of planning, organizing, leading, staffing, and controlling be directed toward the achievement of key organizational objectives.

The MBO approach described by Kralev (2011) derives from Drucker's (1955) original theory. Drucker conceptualized management by objectives as a system of management founded on goal congruence for the improvement of performance. Drucker (1955) believed that an organization is more successful if "their efforts…all pull in the same direction, and their contributions…fit together to produce a whole, without gaps, without friction, without unnecessary duplication of effort" (Dinesh & Palmer, 1998). Therefore, Kralev's (2011) management approach draws its basic principle from the management by objectives theory as stipulated by Drucker (1955). In this management philosophy, the manager is required to focus on goal alignment as a means to improve organizational performance by providing a clear goal and path toward increased profitability.

The focus on organizational objectives is also a key theme in Wang's (2011) article, which examines management philosophy and mission-driven organizations. Wang (2011) proposes that mission-driven organizations in Japan are founded on management philosophy. His management philosophy is based on the pursuit of a mission and emphasizes ethics, harmony, trust, honesty, environmental protection, and social responsibility. These values are all geared toward creating an organizational mission and philosophy that affects management and individual adoption of vision — a means to increase job involvement and organizational citizenship behavior. Therefore, the role of management, in Wang's view, is the creation of an ethical philosophy and a mission-driven culture.

Based on a research analysis, Wang (2011) finds that management with a well-articulated and enacted philosophy can facilitate the transformation of commitment into productive efforts. This is because such a philosophy offers direction to individuals, places constraints on behavior, and emphasizes individual motivation by creating a clear picture of organizational values, norms, and goals. Wang's (2011) mission-driven management approach borrows heavily from management by objectives theory, seeking to prove that mission-driven management leads to organizational practices or culture that influences individual outcomes toward success.

Confucian Philosophy and Strategic Alignment

The article by He (2011) proposes that traditional strategy plans cannot apply in today's business environment, which requires flexible and rapid responses to change. He's (2011) article draws on case studies of NTT DoCoMo and Silicon Valley organizations in China operating according to Confucian principles. The article proposes a management approach that continually changes and adapts to shifting situations, based on the Chinese traditional philosophy of constructivism. In this perspective, management must change strategy to cope with uncertainties and complexities. In addition, the model proposed by He (2011) follows the philosophy that management must design strategic alignment, in which individual behavior and organizational strategy are in harmony.

This Chinese management philosophy entails an alignment that leads to harmony within the organization — specifically, a fit between people and work, and between business strategy and environment (He, 2011). This philosophy leads management to create an organizational environment in which employees' thinking is attuned to the achievement of both individual and organizational strategies for success. Because the Confucian philosophy affects the thinking of individuals by striving to change behavior, following this management approach means that management creates strategies that orient employees' thinking with the goal of aligning their behavior to organizational objectives.