This document defines and discusses Management By Objectives (MBO). MBO is a managerial system that integrates key activities through a systematic process of setting objectives at all levels of an organization to effectively achieve goals. The document outlines the assumptions, nature, process, advantages and limitations of MBO. It was first advocated by management theorist Peter Drucker in the 1950s as a way to improve performance through setting corporate, departmental and individual objectives. The key advantages include efficient management, effective planning, clarity of goals and motivation of employees. Limitations include difficulty setting goals and balancing objectives.

1. PPP

2. CONTENTS
What is MBO?
Meaning & Definition of MBO
Assumption of MBO
Nature of MBO
Process of MBO
Advantages of MBO
Limitations of MBO

3. MBO
MBO is defined as a comprehensive
managerial system that integrates mainly key
managerial activities in a systematic process
and that is consciously directed toward the
effective and efficient achievement of
organizational and individual objectives.
It is also know as Performance Result and
Individual Development Evolution (PRIDE)

4. Meaning - Setting goals for all
managerial activities is known as MBO.
The use of MBO concept was first widely
advocated in the 1950s by the noted
management theorist Peter F. Drucker.
According to him – “MBO is regarded as a
system for improving performance both the
individual managers and enterprise as a
whole by setting objectives at the corporate ,
departmental and individual mangers level.

5. Assumption of MBO
A. Existence of mutual understanding between
superior and subordinates.
B. Employees can perform better when they
clearly know what is expected from them.
C. It assumes that employees are interested in
formulation of plans , want to know the
results of their performance & want to be
fairly rewarded for their performance.

6. Nature of MBO
1. It is a functional approach , giving
importance to goal setting process.
2. It focuses on process of setting goals at every
level of the organization , not on the means
of their implementation.
3. It is a result oriented approach.

7. Process of MBO

8. Advantage of MBO to the Organization
Efficient management
Effective planning
Clarity of organizational goals
Encourages commitment
Facilitates control

9. Advantage of MBO to Superior
Facilitate guidance & direction to subordinates
Basis for evaluating subordinate performance
Motivates subordinates to achieve goal
Helps in coordinating individual efforts with
group effort

10. Advantage of MBO to subordinates
Easy to achieve organizational goal
Enhances job satisfaction
Motivates subordinates to work more
Encourages self direction and self control
Promotes innovative ideas & initiative
Develops cordial relation between superior &
subordinate

11. Limitations
Difficulty of setting goal
Problem of balancing & coordination
Inflexibility
Lack of support of top level managers
Excessive pressure on subordinates
Lack of suitable incentives & rewards
Difficult to implement in
traditional/conservative organization
Time consuming process

12. Reference
www.google.com
www.youtube.com