Management By Objectives (MBO) is the necessary tool and must form part of the management performance process. Staff reduction is mandatory as the company will not require the staff strength that used to oversee sales and distribution of fruit juices.
The PMS is necessary to present management with holistic view of key strategic data to achieve the vision and mission of the company. Information across the company can be collected and used and reused from time to time (Performance Management System for Greater Nile Petroleum Operating Company).
Label V Enterprises is a merger of Italian soft drink producer Miradola and the British distributor Bottle One Enterprises in 2005. The company struggles to integrate the two divisions of production and distribution but without success. The producers in Italy do not increase the quantity of their output in order to maintain their exclusiveness. They want Label V to be sold only to the best restaurants in the world.
On the other hand, the distribution division complains about the inflexibility of production with regard to not only quantities but also product positioning due to the increasing market for "lifestyle" products.
The objectives of PMS are to include financial and non-financial measures, focus management activity on key performance indicators, align departmental goals with corporate strategy, link measures throughout the organization, allow senior management to consider all measures together, reflect the company's commitment to customer service, to prevent proliferation of unneeded measures, and to share with as many staff as is necessary (Performance Management System for Greater Nile Petroleum Operating Company).
The purpose of the PMS is to galvanize the Sales office into decision making department with internal capabilities to coordinate internal activities and also coordinate with other departments as well whenever necessary. McKonsby proposes to initiate a strategy of producing and selling more exclusive products. The margins for these exclusive products are significantly higher than in the mass market for fruit juices.
There is the need to integrate MBO with PMS so that the Sales department can begin operations on a more knowledgeable note. The Sales department had started the MBO process earlier on and the Sales Manager is confident of making the right start with a known system.
The Performance Management System will measure and monitor, analyze, plan, budget and forecast the Sales department's activities besides collecting information of the company as a whole. This will enable Sales maintain tabs on their activities and meet their targets. It will also enable Sales discuss their needs with other departments as needs arise.
The new process will start with appropriate sales team to manage sales and distribution. The shift to exclusive products will mean change in approach and management of the new clients. The former sales team had ready market and catered to these in sufficient numbers in accordance with the market requirement. This will