Management by Objectives

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Objectives may be defined as the expectation of the end-result for an organization Management by Objectives meanwhile refers to establishment of effective standards for managerial positions and the periodic conversion of those into measurable and time bound objectives.

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Management by Objectives

  1. 1. Welingkar’s Distance Learning Division CHAPTER-05 OBJECTIVES AND MBO We Learn – A Continuous Learning Forum
  2. 2. Welingkar’s Distance Learning Division Introduction  Every institution or organization is established for the purpose of achieving some objectives. It may differ from organization to organization. We Learn – A Continuous Learning Forum
  3. 3. Welingkar’s Distance Learning Division Belief can change our fate. Belief is miraculous. Belief can achieve the impossible. We Learn – A Continuous Learning Forum
  4. 4. Welingkar’s Distance Learning Division Definition  Objectives may be defined as the expectation of end result for which an organization is established and which it tries to achieve. We Learn – A Continuous Learning Forum
  5. 5. Welingkar’s Distance Learning Division Features of Objectives  Each individual objective is collected by the group to achieve the group objectives.  The objectives may be short term or long term and broad objectives or specific objectives.  The objectives should be clearly defined.  At top level, the organization has broad objectives. We Learn – A Continuous Learning Forum
  6. 6. Welingkar’s Distance Learning Division Features of Objectives  The objectives of the organization must conform to the general needs of the public.  All organization has several objectives at a time.  The objectives of the organization may be changed in due course.  The objectives are expressed in numerical terms.  The framed objectives should be achievable. We Learn – A Continuous Learning Forum
  7. 7. Welingkar’s Distance Learning Division Advantages of Objectives  Unified planning  Individual motivation  Coordination  Control  Basis for decentralization We Learn – A Continuous Learning Forum
  8. 8. Welingkar’s Distance Learning Division Management by Objectives  MBO means the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning We Learn – A Continuous Learning Forum
  9. 9. Welingkar’s Distance Learning Division Features of MBO  An attempt is made to integrate the goals of organization and individuals that leads to effective management.  It tries to combine long range goals with short range goals.  Management relates the organization goals with society goals.  MBO’s emphasis is not only on goals but also on effective performance.  Encourages a climate of trust, goodwill and will to perform. We Learn – A Continuous Learning Forum
  10. 10. Welingkar’s Distance Learning Division Features of MBO  It pays constant attention to refining, modifying and improving the goals.  It increases the organizational capability of achieving goals at all levels.  High degree of motivation and satisfaction is available.  Recognizes the participation of employees in goal setting process.  Aims at replacing the exercise of authority with consultations. We Learn – A Continuous Learning Forum
  11. 11. Welingkar’s Distance Learning Division Process of MBO Define organizational Goals of each Fixing key objectives section Rresult areas Reappraisal Setting Of subordinate objectives objectives or targets Appraisal of Periodicals review Matching activities meetings resources with objectives We Learn – A Continuous Learning Forum
  12. 12. Welingkar’s Distance Learning Division Benefit of MBO  Managers are involved in objectives setting at various levels management under MBO and this commitment ensures hard work to achieve them.  MBO process helps the managers to understand their role in the total organization.  Manager recognizes the need for planning and appreciates the planning.. We Learn – A Continuous Learning Forum
  13. 13. Welingkar’s Distance Learning Division Benefits of MBO  It provides a foundation for participative management as every one is involved in goal setting.  Each department objectives are consistent with the objectives of the whole organization.  Systematic evaluation of performance is made with the help of MBO. We Learn – A Continuous Learning Forum
  14. 14. Welingkar’s Distance Learning Division Benefit of MBO  It helps to take corrective action.  Delegation of authority is easily done.  It helps the manager attend to job enrichment. We Learn – A Continuous Learning Forum
  15. 15. Welingkar’s Distance Learning Division Benefit of MBO  It makes the job meaningful.  The responsibility of a worker is fixed.  Decision is taken by the management very quickly. We Learn – A Continuous Learning Forum
  16. 16. Welingkar’s Distance Learning Division Problems and Limitation of MBO  MBO fails to explain the philosophy; most of the executives do not know how MBO works, what is MBO and why is MBO necessary and how participants can benefit by MBO.  It is time consuming process and leads to heavy expenditure and requires heavy paper work.  MBO emphasis only on short term objectives and does not consider the long term objectives. We Learn – A Continuous Learning Forum
  17. 17. Welingkar’s Distance Learning Division Problems and Limitation of MBO  The status of subordinates is necessary for proper objectives setting which is not possible in the process of MBO.  MBO is rigid one. Objectives should be changed according to the circumstances. If not done, planned results can not be obtained.  Objectives are set without considering the available resources. We Learn – A Continuous Learning Forum
  18. 18. Welingkar’s Distance Learning Division Guidelines for setting Effective Objectives  Objectives are framed only by the participants who are responsible for implementing them.  All the objectives should support the overall objectives of the organization.  Objectives should be attainable ones. We Learn – A Continuous Learning Forum
  19. 19. Welingkar’s Distance Learning Division Guidelines for setting Effective Objectives  It should result in the motivation of workers.  A periodical review of objective sis necessary for proper implementation.  Objectives should have the characteristics of innovation.  The number of objectives for each management member should be a reasonable one. (4 or 5) We Learn – A Continuous Learning Forum
  20. 20. Welingkar’s Distance Learning Division Guidelines for setting Effective Objectives  It should be ranked on the basis of their importance.  It should be in balance withi9n a given organization.  It should be simple and clearly defined.  It should be specific and time bound. We Learn – A Continuous Learning Forum

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