Empirical Analysis of the Effects of Differently Emphasized Management Control Purposes on the Use and Design of Management by Objectives

Abstract

This paper analyzed the results of a questionnaire survey conducted on companies listed on the First Section of the Tokyo Stock Exchange. It aimed to clarify the characteristics of the use and design of management by objectives (MBO), that highlights two different management control purposes. The results showed that, the higher the emphasis on MBO’s strategy sharing purpose, the more transparent the targets were. Furthermore, the relationship between the two was partially mediated by emphasizing budget achievements. By contrast, the higher the emphasis on MBO’s personnel control purpose, the higher the degree of reward link.