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  • 1. Management By Objectives
  • 2. Definition
    • MBO is a comprehensive managerial system that integrates many key management activities in a systematic manner , directed towards the effective and efficient achievement of organizational objectives
    • MBO is a result centered managerial process for the effective utilization of material , physical and human resources of the organization by integrating the individual with the organization and organization with the environment
  • 3. Features Of MBO
    • MBO focuses sharply on the objectives which a manager is expected to achieve within a specified period
    • Also it emphasis on participative management , an approach which provides motivation to individuals in an organization
    • MBO tries to match objectives and resources
    • MBO is characterized by the participation of managers in objective decision setting and performance reviews
  • 4. Process Of MBO
    • Setting of organizational purpose and objectives (why does the organization exist , what should be our business)
    • Concentration on Key result areas(KRA) i.e on market standing , innovation , productivity , worker performance
    • Setting Subordinate`s Objectives (recommendations by the superior for the subordinates objectives )
    • Matching Resources with Objectives ( available resources are matched at the time when objectives are framed )
    • Appraisal ( to measure whether the subordinate is achieving his objective or not )
    • Recycling ( outcome of appraisal at one level is recycled to see if the objectives have been set properly )
  • 5. Benefits of MBO
    • Better managing
    • Clarity in organizational action
    • Personnel satisfaction
    • Basis for organizational change
  • 6. Limitations Of MBO
    • Time & Cost
    • Failure to teach MBO policy
    • Problem in objective setting ( setting of verified objectives against which performance can be measured)
    • Emphasis on short term objectives
    • Inflexibility ( since objectives cannot be changed )
    • Frustration ( because of non fulfillment of objectives )