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  1. 1. Management By Objectives Presentation by Prativa Dhakal M. Sc. Nursing Batch 2011
  2. 2. Contents • • • • • • • • • • Introduction Definition Purpose of MBO Process of MBO Features of MBO Benefits of MBO Limitations of MBO Essential conditions for successful execution Implications of MBO in Nursing References
  3. 3. Introduction • Popular technique of appraisal of managerial performance. • The first original work on MBO can be found in Peter Drucker’s book, The Practice of Management, published in 1954. • He states that it is soundly based on “a concept of human behavior and human motivation and that it applies to managers at all levels, in all functional areas and to any kind and size of organization.”
  4. 4. Introduction cont…. • MBO is a process which ideally begins at the top of the organization with the establishment of specific organizational objectives. • Then, at second level of the organization, managers working with their bosses, establish objectives for their departments that are consistent with the organization’s objectives. • This procedure is repeated down to the lowestlevel managers in the organization.
  5. 5. Introduction cont…. • The value of MBO is that it communicates the mission, goals and objectives of the organization to the lower levels. • The lower level managers work out their plans and targets in consultation with their subordinates.
  6. 6. Introduction cont…. • These are then sent to higher levels for consideration. • MBO, thus, allows employees to participate in planning and control of their own work. • This involvement of employees increases their motivation and commitment to their work.
  7. 7. Definition of MBO • “A process whereby the superior and subordinate managers of an enterprise jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the units and assessing the contribution of each of its members.” -George S. Odiome
  8. 8. Definition of MBO cont.. • MBO is a comprehensive managerial system that integrates many key managerial activities in a systemic manner, consciously directed towards the effective and efficient achievement of organizational objectives. Heinz Weihrich and Harnold Koontz • MBO is a process in which there is periodic agreement between a superior and a subordinate on the subordinates objectives for a particular period and a periodic review of how well the subordinate achieved those objectives. Wendell L French
  9. 9. Purpose of MBO • To translate mission statements into operational terms • To give directions and set standards for the measurement of performance. • To set both long term and short term objectives.
  10. 10. Basic tenets of MBO • Result orientation • Concept of human behavior and motivation or aims at achieving the laid down objectives.
  11. 11. Process of MBO
  12. 12. MBO cont… In MBO goals are expected to be SMART
  13. 13. Features of MBO (Given by Ivancevich, Donnelly, and Gison, 2007) • The superior and the subordinate meet to discuss and set goals for the subordinate for a specified period of time. • Both the superior and the subordinate attempt to establish goals that are realistic, challenging, clear and comprehensive. • The standards for measuring and evaluating the goals and objectives are agreed upon.
  14. 14. Features of MBO cont.. • The superior and the subordinate establish some intermediate review dates when the goals will be reexamined. • The superior plays more of a coaching, counseling, and supportive role. • The entire process focuses on results and on the counseling of the subordinates, and not on activities, mistakes, and organizational requirements.
  15. 15. Benefits of MBO • It emphasizes developmental human resources. and utilization of • It identifies the problems of management, including structure, strategies and practice. • It focuses attention and effort on priority areas. • Planning becomes more precise and useful. • It makes objectives explicit and directs work activity towards their achievement.
  16. 16. Benefits of MBO cont… • It provides clear standards of control and facilitates self control. • It sharpens accountability. • It highlights organization. interdependence within the • MBO provides a vehicle for delegation of authority.
  17. 17. Benefits of MBO cont… • It stimulates organizational change enabling the top management to initiate plan, direct and control the direction and speed of change by providing guidelines for planned change. • It provides clarity in organization action. • It provides greatest opportunity for personnel satisfaction by adopting participatory approach. • It establishes good interpersonal relationship between management and employees.
  18. 18. Benefits of MBO cont… • It increases efficiency of management and the organization as a whole as the decisions are taken both by superiors and subordinates. • It helps in coordinating the activities of different units and departments. • It is the welding technique that joins personalcentered management to result centered management.
  19. 19. Limitations of MBO • Difficulty in objective setting. • It is a time consuming process especially in the initial stages. • Lack of cooperation between superiors and subordinates can be there due to differences in their opinions during setting objectives. • It represents the danger of inflexibility in the organization.’
  20. 20. Limitations of MBO cont… • MBO can be in failure, if competent and trained managers are not available. • It is one of the greatest managerial illusions because it fails to take adequately into account the deeper emotional components of emotions.
  21. 21. Essential Conditions for Successful Execution of MBO 1. Support from all 2. Acceptance of MBO programme by managers 3. Training of managers 4. Organizational commitment 5. Allocation of adequate time and resources 6. Provision of uninterrupted information feedback
  22. 22. Implications of MBO in nursing • Measures and judge performance. • Correlates individual performance to organizational goals. • Clarifies job responsibilities expected from staff. • Fosters the increasing competence and growth of subordinates.
  23. 23. Implications cont… • Provides data base for estimating salary and promotion. • Stimulates the subordinates’ motivation. • Helps in organizational integrating the activities. work control and
  24. 24. References 1. Singh I. Leading and Managing in Health. Kathmandu: Hisi; 2006 2. Pant PR. Principles of management. Second edition. Kathmnadu: Buddha academic publishers; 2010 3. Tripathi PC, Reddy PN. Principles of management. Fourth edition. New Delhi: Tata McGraw Hill Education; 2008 4. Mehta RS, Pokhrel T. Leadership and management (Nursing Management). Third edition. Kathmandu: Makalu Publications;2012 5. Available from: Retrieved on 19th September 2012 6. Management by objectives (MBO) Peter Drucker MBO. [updated on Date : 6/12/2010, retrieved on 19th September 2012] available from: