Explaining Management by Objectives: A Comprehensive Guide

Management by Objectives (MBO) is a process in which a manager and an employee come to an agreement on specific performance objectives. This goal-based management system uses the company's main objectives to determine individual employee objectives.

Explaining Management by Objectives: A Comprehensive Guide

Management by Objectives (MBO) is a process in which a manager and an employee come to an agreement on specific performance objectives. This goal-based management system uses the company's main objectives to determine individual employee objectives. It allows all members of the organization to see how their tasks contribute to the company's main objectives and priorities. MBO is a supervised and managed activity so that all individual objectives can be coordinated to work towards the overall objective of the organization. The term Management by Objectives was first advocated by management expert Peter Drucker and was commonly used in the 1960s.

It is a process in which the objectives of the organization are defined and transmitted by management to the members of the organization with the intention of achieving each objective. Professionals say that the main benefits of MBO are that it improves employee motivation and engagement and allows better communication between management and employees. To implement a successful management culture by objectives, managers should follow these steps:

  • Define the company's main objectives and priorities.
  • Communicate these objectives to all members of the organization.
  • Work with employees to establish their personal goals.
  • Monitor progress towards these goals.
  • Make necessary adjustments when needed.
It is important to note that environmental factors can hinder the achievement of goals, such as lack of resources or administrative support. Point 7 of Deming's Key Principles encourages managers to abandon objectives in favor of leadership because they considered that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of a goal. The management of IT company Hewlett-Packard (HP) has said that it considers politics a fundamental component of its success. This shows how activity and outcome go together and can dramatically increase productivity.

Management Study Guide is a comprehensive tutorial for management students, where students can learn the basic and advanced concepts related to management and its related topics. By following these steps, you can implement a successful management culture by objectives and see an improvement in your team's performance. Your managing partner requests a monthly note on the status of the completion of your goal so that the necessary adjustments can be made. Management by Objectives (MBO) is a personnel management technique in which managers and employees work together to set, record, and monitor goals for a specific period of time.

Doug Pelletiu
Doug Pelletiu

Total bacon ninja. Avid travel scholar. Evil bacon advocate. Freelance social media scholar. Devoted beer practitioner. Incurable bacon guru.

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