2. Introduction
MBO is comprises of two majors
words
1.Management
2.Objectives
3. 1.Management
Management is a process, consisting
of planning, organizing, actuating
and controlling, performance
determine and accomplish the
objectives by the use of people and
resource
4. 2.Objectives
Objectives are the aims which the
management wishes to the
organization to achieve.
These are the end point towards
which all business activities like
organizing, staffing, directing and
controlling are directed.
5. Characteristics of Sound Onjective
It should be clear and acceptable.
It should support each other .
It must be precise and measurable.
It should be valid (feasible).
6. Thus, every objective must meet these
criteria:
Is it Specific?
Is it Measurable?
Is it Appropriate?
Is it Realistic?
Is it Time-bound
7. Is it specific? Does it clearly talk about one thing, and both the
staff member and the supervisor know exactly what output
they are talking about.
Is it measurable? Can the output be quantified?
Is it appropriate? Does the staff member have the power to
accomplish the task? Will it work?
Is it realistic? Based upon experience & data, can the output
be achieved in the allotted time with a given amount of
resources?
Is it time-bound? Is a specific, reasonable amount of time
specified to accomplish each objective?
10. 8 Key Result Areas Where Managers
Must Pursue Clear Objectives
Marketing
Innovation
Human organization
Financial resources
Physical resources
Productivity
Social responsibility
Profit requirements
11. Management by Objectives
Management by Objectives (MBO) was first
outlined by Peter Drucker in 1954.
MBO is a systematic and organized approach
that allows management to focus on achievable
goals and to attain the best possible results
from available resources.
It aims to increase organizational performance
by aligning goals and subordinate objectives
throughout the organization.
Employees get strong input to identify their
objectives, time lines for completion, etc.
MBO includes ongoing tracking and feedback in
the process to reach objectives.
12. MBO is a Philosophy
Reflects a Proactive way of managing
that is:
Results oriented,
Emphasizes accomplishments
rather than inputs,
Encourages participation at all
levels of an organization
(collaborative; shared power &
self-management
13. Principle of MBO
The principle behind MBO is to make sure
that everybody within the organization has
a clear understanding of the aims, or
objectives, of that organization, as well as
awareness of their own roles and
responsibilities in achieving those aims.
Unity of magt action is more likely to occur
when there is pursuit of a common objective.
The greater the focus on results on a time
scale, the greater likelihood of achieving
them.
The greater the participation in setting
meaningful work with accountable results,
the greater the motivation for completing
14. Reenergizing the system
Transformation Process
Action
Strategic Planning
Planning
Organiza-
Setting Imple
tional
INPUTS Objective development ment
s ation OUTPUTS
Hierarchy of Objectives Control &
Appraisal
Subsystem
Human Resource
Planning And Career Reward Others
Development planning Budgeting
System
Information handling Organizational
Boundary
External constraints external opportunities & threats
15. Management by objectives aims to
serve as a basis for
(A) greater efficiency through
systematic procedures,
(B) greater employee motivation and
commitment through participation in
the planning process, and
(C) planning for results instead of
planning just for work
16. MBO Advantages
MBO programs continually
emphasize what should be done in
an organization to achieve
organizational goals.
MBO process secures employee
commitment to attaining
organizational goals.
17. MBO Disadvantages
The development of objectives can
be time consuming, leaving both
managers and employees less time
in which to do their actual work.
The elaborate written goals, careful
communication of goals, and
detailed performance evaluation
required in an MBO program
increase the volume of paperwork
in an organization.
