Management by objective

MANAGEMENT BY OBJECTIVE
(MBO)

BY

VAGHELA MANISHA

vaghela_manisha13@yah
oo.com BY: VAGHELA MANISHA 1

Flow of presentation
1)INTRODUCTION.
2)FEATURE AND ADVANTAGES.
3)DOMAINS AND LEVELS.
4)PRACTISE.
5)LIMITATION.
6)ARGUMENTS AGAINST.
7)REVIEW OF TOPIC.
8)REFERENCES.

INTRODUCTION
Management by objectives
(MBO) is a process of agreeing upon objectives
Within an organization so that management
And employees agree to the objective and
Understand what they are in the organization.


The term "management by objectives" was first
popularized by Peter Drucker in his 1954 book 'The
Practice of Management’.

The essence of MBO is participative goal setting, choosing
course of actions and decision making. An important part
of the MBO is the measurement and the comparison of the
employee’s actual performance with the standards set.
Ideally, when employees themselves have been involved
with the goal setting and the choosing the course of
actionto be followed by them, they are more likely to fulfill
their responsibilities


Features and Advantages
Unique features and
advantage of the MBO
process


The principle behind Management by Objectives
(MBO) is basically for employees to have clarity of
the roles and responsibilities expected of them.
They then understand the


objectives they must do and the over all
achievement of the organization. They also help
with the personal goals of each employee.


Some of the important features
and advantages of MBO are


Motivation –

Involving employees in the whole process of
goal setting and increasing employee
empowerment increases employee job
satisfaction and commitment


Better communication and Coordination –

Frequent reviews and interactions between superiors and subordinates
helps to maintain harmonious relationships within the enterprise and
also solve many problems faced during the period


Managers can ensure that objectives of the
subordinates are linked to the organisation
Subordinates have a higher commitment to
objectives that they set themselves than 's
objectives


Domains and levels
Objectives can be set in all domains of activities
(production, marketing, services, sales, R&D, hum
an resources, finance, information systems etc.).
Some objectives are collective, for a whole
department or the whole company, others can be
individualized.


Practice

Objectives need quantifying and monitoring.
Reliable management information systems
are needed to establish relevant objectives
and monitor their "reach ratio" in an objective
way. Pay incentives (bonuses) are often
linked to results in reaching the objectives


Limitations

There are several limitations to the assumptive base
underlying the impact of managing by objectives, including:


The use of MBO needs to be carefully aligned with
the culture of the organization. While MBO is not
as fashionable as it was before the 'empowerment'
fad, it still has its place in management today. The
key difference is that rather than 'set' objectives
from a cascade


Arguments Against

MBO has its detractors, notably among them W.
Edwards Deming, who argued that a lack of
understanding of systems commonly results in the
misapplication of objectives Additionally, Deming
stated that setting production targets will
encourage resources to meet those targets
through whatever means necessary, which usually
results in poor quality


Point 7 of Deming's 14 Points encourages managers to
abandon objectives in favour of leadership because he felt
that a leader with an understanding of systems was more
likely to guide workers to an appropriate solution than the
incentive of an objective. Deming also pointed out that
Drucker warned managers that a systemic view was
required and felt that Drucker's warning went largely
unheeded by the practitioners of MBO


REVIEW OF THE TOPIC.
 INTRODUCTION.
 FEATURE AND ADVANTAGES.
 DOMAINS AND LEVELS.
 PRACTISE.
 LIMITATIONS.
 ARGUMENTS AGAINST.


References
1) principals of management
p.subba rao
himalya publishing house.
2)essentials of management
p.n.reddy
p.c. tripathi
h.r.appannaiah.

Thank You

Management by objective

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