Management By Objectives (MBO)

MBO concept was popularized by Peter Drucker.

MBO is "a process whereby superior and subordinate managers of an Organisation jointly define its common goals, define each individual's major areas of responsibility in terms Of results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members." It concentrates attention on the accomplishment of objectives through participation of all concerned persons, i.e., through team spirit. MBO is based on the assumption that people perform better when they know what is expected of them and can relate their personal goals to organizational objectives. MBO involves the establishment of goals by managers and their subordinates acting together, specifying responsibilities and assigning authority for achieving the goals and finally constant monitoring of performance.

Features Of Management By Objectives

1. Superior-subordinate participation. 2. Joint goal-setting.
3. Joint decision on methodology. 4. Makes way to attain maximum result. 5. Support from superior.

Steps In Management By Objectives Planning

Goal setting Manager-Subordinate involvement Matching goals and resources

Implementation of plan
Review and appraisal of performance

Advantages of Management By Objectives

Develops result-oriented philosophy Formulation of dearer goals

Facilitates objective appraisal

Raises employee morale

Facilitates effective planning

Facilitates effective control

Facilitates personal leadership

Limitations of Management By Objectives

Time-consuming Reward-punishment approach

Increases paper-work

Creates organizational problems

Develops conflicting objectives

Problem of co-ordination

Problems related to goal-setting