Because of the benefits that the management by objectives model can provide to companies, the model has been widely used in the business world. Management by objectives still exists and can be a useful approach if configured and maintained well. However, the workplace has changed considerably in recent years, and there is either a need to pay greater attention to the implementation and maintenance of the system, or to adopt more sophisticated systems (such as the balanced scorecard approach). Jon Warner is an executive coach and management consultant and, in the past, has been CEO at three very different companies.
Active dialogue and the testing of objectives in the middle of the year make the MBO process a very useful exercise for managers and employees. But is this because, like many management concepts, it has stopped being useful, has it been replaced, or has it simply been neglected? This step in performance management is crucial because it emphasizes effective communication between management and the team. Management by objectives (MBO) aligns team members' goals with company objectives so that team members feel more motivated and included in the work. Professionals say that the main benefits of MBO are that it improves employee motivation and commitment and allows for better communication between management and employees.
MBO works because part of the MBO process involves management and team members aligning and agreeing on these objective standards. Management by objectives responds to business needs and industry changes, but depends to a large extent on the authentic completion of the communication model i. By comparing actual productivity to a given set of standards, managers can identify problem areas and improve efficiency. MBO became a popular management strategy in the 1960s and 1970s, after Drucker first introduced it.
However, I have also had experience with managers who, year after year, spent time discussing the upper levels and in all their organizations in order to identify what the goal should be in one or two years and then formulate this vision of the objectives. In my experience, managers, in many cases and at many levels of an organization, have not made an effort to define the relevant objectives (they are usually “too busy” or “business prospects are not clear at this time”), so they end up managing the day to day rather than having a long-term horizon. Hundreds of thousands of managers and professionals have participated in the MBO through the process of establishing personal objectives related to the organization's main areas of interest. Jon Warner is a prolific author, management consultant and executive coach with more than 25 years of experience.
Management by objectives (MBO) is a strategic management model that aims to improve the performance of an organization by clearly defining the objectives agreed upon by both management and employees. Management without objectives is certainly not the answer and will only lead to a lack of vision and underoptimization.