MBO is a management approach that focuses on setting achievable goals and maximizing output with available resources. It involves managers jointly defining goals with their subordinates and assessing performance based on agreed upon objectives. MBO was first proposed by Peter Drucker and works best in knowledge-based companies that want to harness employee creativity and initiative.

3. MBO stands for Management by Objectives. MBO is an
approach of management that helps to focus on goals that
are achievable and in getting maximum output from the
resources that are available. It is an approach that is
systematic and highly organized.
MBO was first proposed by Peter Drucker. He however
emphasized that management by objective would work
only if you knew your objectives.
MBO is used in companies that are knowledge based and
where the management wants to harness the inherent
creativity and initiative of the workforce.

4.  MBO is “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 result expected of him and use these
measures as guides for operating the unit and
assessing the contribution of each of its
members.”- George Odiorne.

5. Decision making is
an indispensable
component of the
management
process itself.

6. DEFINING THE JOB: The subordinate is asked to define
his job and rank the task from most to least important .The
superior does the same to define the subordinate’s job .
This is done separately , so that the perceptions of each are
not influenced by the other party. At the second session ,
the two get together and review the statements , which
hopefully leads to enlightened discussions . MBO is based
on two assumptions firstly , let people know what is
expected of them and secondly , permit subordinates to set
goals.

7. Superior -Subordinate Participation: MBO requires the superior and subordinate
to recognize that the development of objectives is a joint project .
Joint Goal Setting: MBO emphasis's joint goal - settings that are tangible,
verifiable and measurable .
Joint Decision on Methodology: MBO focuses higher attention on what must be
accomplished (goals) rather than how it is to be accomplished (methods).
Makes way to attain maximum result: MBO is a systematic and rational technique
that allows management to attain maximum results from available resources by
focusing on attainable goals.
Support from Superior: When the subordinate makes efforts to achieve his goals ,
the superiors' helping hand is always available .

8.  Result-oriented approach.
 Verifiable and measurable goals.
 Impartial goals.
 Higher morale.
 Personal leadership.
 Stress on key result areas.
 Employee motivation.

9.  Time consuming.
 Conflicting objectives.
 Higher paperwork.
 Lack of durability.
 Reward-punishment approach.
 Disputed target setting.
 Problem of co-ordination.

10.  Decision-making is an essential part of modern
management.
 A manager’s major job is sound and rational
decision-making. Decision-making pervades all
managerial actions and is a continuous process.
 Means and ends are linked together through
decision making.
 The word decision making is derived from the
Latin word de ciso , which means ‘a cutting away
or a cutting off, or in a practical sense ‘to come to
conclusions’.

11. Identifying
The
problem
Analysing
The
problem
Developing
Alternative
solutions
Process of
Decision
making
Follow up
Of action
taken
Convertising
Decision
Into action
Selecting
The best
solution

12.  Identifying the problem.
 Analyzing the problem.
 Collecting relevant data.
 Developing alternative solutions.
 Selecting the best solution.
 Converting decision into Action.
 Ensuring Feedback.