The perspectives of management by objectives

Mr.Mahmoud SALAMEH

Abstract

Currently, Syria undergoes changes and several intrinsic mutations (transition from central to diversified economy and from rarity to abundance, replacing substitution strategies of import by open market and competition, transition from social production model to the competitive production model…).

In addition to these mutations, the expiry dates of Arab trade liberalization and the partnership with Europe push Syria to rehabilitate the public sector. This sector suffers from deficiency due to the high centralization, the slowness in decision taking, the multiplicity of supervisors (party, syndicate, security apparatuses…), the dysfunction in administrative structure and hierarchy, the confusion between social and economic dimension, the seize of public surpluses (profits and depreciation) by the ministry of finance, the underdeveloped concepts and control procedures, the lack of competence, the low wages, the absence of scientific research and development, and the absence of objectives. This dysfunction reflected in high stock and debt with entangled financial commitments intra-establishments and among firms in the same public establishment (23 billion SP of debts and 14 billion SP in textile sector).

Management by Objectives (MBO) was announced in 1999 by a decision from the Prime Minister. It concerned four enterprises for a period of two years.

The general principles of the experience are to fix goals and to determine the human, material, legal, and administrative underground. The explaining memorandum emphasized the freedom in exploiting resources to achieve economic profitability, and the elaboration of operating plans (but not the investment plans)…

The new system gives several rights to the relevant enterprises in order to stimulate their performance (leaving the liquidity surplus to the operations of replacement and innovation, ability to contract freely locally and abroad, increasing the reward sum giving by a director…).

A special committee was designed to pursue the results of the experience. This committee published the system texts and asked for comments and suggestions. Also, it asked firms to prepare a diagnosis of the labor force, to prepare standard costs systems, and to elaborate goals for each firm. The follow up of the experience was monthly and quarterly.

After showing some statistics (Production, sales, stocks, and rewards) to assess the experience in the last period, the lecturer lists his remarks on the Syrian MBO experience. Positive remarks are:

¨ Launching this project is a step in the administrative and economic reform,

¨ It is a step to concretize the financial and administrative independence (in public firms),

¨ Despite the narrow given margins, primary results confirm the ability to improve them,

¨ Adopting accountability leads to a responsible management, separation between the economic and the social,

¨ MBO is better than the strict execution of orders...

Negative remarks are the ignorance of criteria leading to the choice of the four firms, Prime Minister decision is not legally sufficient to face problems in courts... The lecturer mentioned the difference between the MBO as explained by P.DRUCKER and the MBO conceived and applied in Syria. Furthermore, he criticized the conviction of syrian administrators that MBO is designed only for goods (not for services)!

In his comments, Mr. SEIFAN, thinks that the few positive results of syrian MBO are due to external rather than to internal factors. This experience (applied that way) will not succeed because it adopts the same instruments of the old management. SEIFAN accuses the incompetent managers to be inapt to mend what they damaged. Having the required results needs radical development of the experience. He presents in annex a comparison between the principles of the experience as mentioned in texts and the required principles to reach a radical success. He thinks, whatever the future of the Syrian public sector, the state remains very important to regulate and assure a steady development growth. The continuous question is how to increase the performance of the public sector?

Concerning the separation of management from ownership, he mentions that the whole population owns the public sector. Therefor, he stresses on best ways to activate the role of this exceptional owner to influence the management of the public sector. Finally, he presents some suggestions concerning alternatives of ownership different from the two extreme classic types: the monopoly of the state or of the capitalism.