MBO is a comprehensive managerial system for setting goals and evaluating performance based on accomplishing those goals. The goals must be mutually agreed upon by employees and supervisors, challenging but achievable, within an employee's control, and reviewed periodically for modifications. The MBO process involves setting organizational objectives and key result areas, establishing subordinate objectives, matching resources to objectives, performance appraisal, and recycling the process. Benefits include better management through clarity of objectives and roles, periodic feedback, and participation in management. Problems can arise from difficulties setting goals, failure to teach the MBO philosophy, issues with objective setting, overemphasis on short-term goals, and potential for frustration.

1. MANAGEMENT BY OBJECTIVE(MBO)K.BASKARMBA-DMSPONDICHERRY UNIVERSITY

2. OBJECTIVESOMETHING WE TRY TO ACHIEVEINDIVIDUAL ACTIVITIESSPECIFIC OR BROADLONG TERM OR SHORT TERM

3. NATURE OF OBJECTIVEOVERALL OBJECTIVES NEED TO BE SUPPORTED BY SUB OBJECTIVEHIERARCHY AND NETWORK FORM

4. Hierarchy model

5. MBOThe term MBO was coined by Peter Drucker in 1954“MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective achievement of organizational objectives.”

6. WHAT IS MBO?We set goals and then performance is judged based on how well we accomplish these goals.Intellectually – this seems like the way to go – and has for yearsBut?

7. The goals must be:Mutually agreeable to employee and supervisorDemanding (stretching) but achievableWithin the control of the employeeReviewed periodically for modifications based on events

8. The goals must also be:Clearly definedSimple to understandWritten

9. Process of MBOSetting of organisational purpose & objectives.Key result areas.Setting subordinate objectives.Matching resources & objectives.Appraisal.Recycling.Aspects:-Objective setting.

10. Action planning.

11. Performance review. BENEFITS OF MBOBetter management:- a) Clarity of objectives. b) Role clarity. c) Periodic feedback of performances. d) Participation by managers in the management process, and e) Realisation that there is always scope for improvement of performance in every situation.

12. BENEFITS OF MBO2. Clarity in organisational action.3. Personnel satisfaction.4. Basis for organisational change.

13. PROBLEMS AND LIMITATIONS OF MBODifficulty of setting goalsFailure to teach MBO philosophy.Problems in objective setting.Emphasis on short-term objectives.Inflexibility.Frustration