Some of the organisations that follow the concept of MBO - Management by Objectives.

1. Management by Objectives –
Examples.
Agnes Miriam. I

2. Criticism on MBO
• W. Edward Deming – Argument against MBO.
• lack of understanding of systems commonly
results in the misapplication of objectives.
• Setting production targets – encourage
workers to meet those targets through
whatever means necessary – poor quality.

3. Peter Drucker on MBO
Management Buy Out !!!

4. Improving Sales Force Performance by
MBO.
• Tying compensation to MBO – Motivate the
sales team.
• Sales Compensation Plan – traditional – lack
proper data to measure sales.
• MBO Centric Compensation Plan – rewards
people for meeting objectives.

5. MBOs Have Their Time and Place
• When the company has indirect or insufficient
data that limit the ability to measure
individual sales performance.
• Technology company preparing for its first
product launch.
• No immediate results even though the
production and sales forces have worked hard.
• MBO based incentive plan is a good fit.

6. Building a Successful MBO Team
• Involve the entire team
• Drive results
• Develop strong objectives
• Tie to ratings
• Centralize and automate

7. Results Achieved
• The company established strong customer
relationships.
• The sales force’s efforts created a customer base
of eager first movers.
• the company retained its best salespeople in
larger numbers than expected.
• The company had approached MBOs the right
way, the technology company achieved its initial
goals, motivated the sales force and rewarded
salespeople appropriately.

8. MBO – “The HP Way”
• Highly acclaimed management style.
• MBO – an integral part of The HP Way !!
• Bill Packard – MBO – Antithesis of Management
by Control.
• Overall objectives are clearly stated, Flexibility
to work in different ways.
• Planning – High level management and then
delegated to all.
• Monitoring performance measures – plan
modified.

9. MBO at Microsoft by Bill Gates.
• Eliminate politics by giving everyone the same
message.
• Keep a flat organisation in which all issues are
discussed openly.
• Insist on clear and direct communication.
• Prevent competing measures and objectives.
• Eliminate rivalry between the different parts of
the organisation.
• Empower teams to do their own things.

10. MBO in Action at INTEL
• A Manager’s guide at Intel:
• Start with a well chosen objectives.
• Set your subordinates objective that fit in
within your objective.
• Allow the subordinates to setup their own
key results so as to achieve their own
objectives.

11. MBO in Action at INTEL
• In Intel, objectives are written down for each
level of the organisation and individuals are
given specific aims and targets.
• What organisation is trying to achieve, what
is their part and how they can help.

12. MBO in Action at INTEL
• Andy Groove – “ The only thing MBO should
provide is focus.”
• Keep objectives precise and their number
small.
• For MBO to be effective, the individual
managers must understand their specific
objectives and how those objectives fit into
the overall objective of the company.