What is MBO?

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to provide the best possible results from available resources.

Management by Objectives (MBO) was first described in 1954 by Peter Drucker in his book The Practice of Management. In the 90s, Peter Drucker himself reduced the significance of this organization management method.

Key Terms

According to Drucker, managers must “avoid the activity trap”, get so involved in top level management

* Join thebasic and strategic planning with a view to improving the administration of the assets of the plan, and
* Implement a series of performance systems, designed to help the organization stay on track.
* MBO enjoyed great popularity for some time, but soon fell itshard rules.
o The emphasis on setting clear targets, however, were right and remains useful.

Managerial Focus

MBO managers should focus on goals, not the activity. They delegate by “negotiating a contract goals” with their subordinates without dictating a detailed roadmap for implementation.Management by Objectives (MBO) is about setting your goals and breaking these down into more specific objectives and key results.

Important principle

The principle behind Management by Objectives (MBO) is to ensure that everyone in the organization a clear understanding of the goals or objectives of that organization, as well as awareness of their roles and responsibilities in achieving these objectives.The complete MBO system is to act and employees managers to implement and realize their plans, which automatically reaching those of the organization.

Where to use MBO

The MBO style is suitable for large companies such as your employees responsible. It is appropriate in situations where you want and employee management skills and build their talent and initiative to tap.

Version:

Management by Objectives (MBO) is also used by chief executives of multinational companies (MNCs) for their country managers abroad.

A Manager’s Guide to Intel, the following directions.

1. Start with a few well-chosen overriding objectives.
2. Set goals that fit your subordinates in your main goals.
3. Allow your subordinates to set their own key results to enable them to meet their objectives.

Structural approach;

Structural approach to the entire organization participatory approach

(A) increase effectiveness through contol

(B) a greater motivation through incentives, and participation in plannin

(C) Planning for performance rather than simply planning out the work of them.

The objectives must meet the following five aspects: they have

(1) Ranked in order of importance,

(2) quantified, where possible,

(3) Realistic,

(4BE in accordance with the plans and policies of the organization, and

(5) compatible with each other.

Usually the employee is asked to define SMART goals, goals Specific, Measurable, Time, Realistic and related. These objectives should reflect the organizational goals and specific to each employee. The reason for using the SMART approach is that we need to assess whether the goals were reached later.

After some interaction with a manager, the objectives are approved by both the employee and manager. At the end of the performance cycle, the objectives will be reviewed, and the manager will decide the extent to which each employee has reached their personal goals.