2. All management models had some success but non succeeded
totally in injecting enough of that vitality and adaptability into
organizational life to allow it to thrive and remain viable in this
age of change and sociological turmoil.
First used by Peter Drucker in 1954, M.B.O. has been
further developed by many other management theoreticians
like Douglas McGregor, George Odiorne, and John
Humble.
And thus M.B.O.(Management By Objectives) was born.

3. Management By Objectives
Management Objectives
Management is the
process, consisting of
planning, organizing,
actuating and controlling
performance to determine
and accomplish the
objectives by the use of
people and resource.
Objectives are the aims
which the management
wishes to the
organization to achieve.
These are the end points
towards which all
business activities like
organizing, staffing,
directing and controlling
are directed.

4. Characteristics Of Sound Objectives that should be always kept
in mind:
they should always be clear and acceptable.
they should always support each other.
they must always be precise and measurable
they should always be valid (feasible).
Thus, every objective must meet these criteria:

5. Management by
Objectives was
introduced by Peter
Drucker in the 1950s.
Partly, the idea may
have become a victim
of its own success: It
became so much a
part of the way
business is conducted
that it no longer may
have seemed
remarkable, or even
worthy of comment.
It evolved into the
idea of the Balanced
Scorecard, which
provided a more
sophisticated
framework for doing
essentially the same
thing.
Drucker outlined the
five stages of MBO.
Each stage has
particular challenges
that need to be
addressed for the
whole system to
work effectively.

7. Set or Review Organizational Objectives
MBO starts with clearly defined strategic organizational
objectives. If the organization isn't clear where its going,
no one working there will be either.

8. Cascading Objectives Down to Employees
To support the mission, the organization needs to set clear
goals and objectives, which then need to cascade down
from one organizational level to the next until they reach
everyone.To make MBO goal and objective setting more
effective, Drucker used the SMART acronym to set goals
that were attainable and to which people felt accountable.
He said that goals and objectives must be: •Specific
•Measurable
•Agreed (relating to the participative management principle)
•Realistic
•Time related

9. Monitor Progress
Because the goals and objectives are SMART, they are
measurable.This monitoring system has to be timely
enough so that issues can be dealt with before they
threaten goal achievement.On the other hand, it is
essential that you ensure that the goals are not driving
adverse behavior because they have not been designed
correctly.Set up a specific plan for monitoring goal
performance

10. Evaluate and Reward
Performance MBO is designed to improve performance at
all levels of the organization. To ensure this, a
comprehensive evaluation system is needed.As goals have
been defined in a specific, measurable and time-based way,
the evaluation aspect of MBO is relatively straightforward.
Employees are evaluated on their performance with respect
to goal achievement All that is left to do is to tie goal
achievement to reward, and perhaps compensation, and
provide the appropriate feedback.

11. To make sure that everybody within the organization
has a clear understanding of the aims, or objectives, of
that organization, as well as awareness of their own
roles and responsibilities in achieving those aims
Unity of management action is more likely to occur
when there is pursuit of a common objective.
The greater the focus on results on a time scale,
the greater likelihood of achieving them.
The greater the participation in setting meaningful
work with accountable results, the greater the
motivation for completing

13. “Managers should avoid the “activity trap”,i.e.
getting involved in day to day activities and
forgetting the main objective. They should
participate in the strategic planning process in
order to improve the implementability of the plan
and implement a range of systems to keep the
organization on the right track.”
Peter Drucker
George S. Odiorne
“A process whereby superior and subordinate
managers of an organization jointly define its
common goals, define each individual’s major
areas of responsibility in terms of results
expected of him and use these results as guides
for operating the unit and accessing the
contribution of each of its members.”

14. Gain greater commitment and desire to contribute from
subordinates
Gain better control and coordination toward goal
accomplishment
Gain an increased ability to help subordinates

15. The boss puts constant pressure on the subordinate
to produce results and forgets about using MBO
for commitment, desire to contribute, and
management development.
Even well intentioned managers misuse MBO because
they do not have the interpersonal skills or knowledge
of human needs to keep their appraisal sessions from
becoming critical, chewing-out periods.