What is Management by Objectives and its Goals?

Learn what Management by Objectives (MBO) is and how it can help you achieve your goals effectively and efficiently. Understand how influential managers can help their team members reach their goals.

What is Management by Objectives and its Goals?

Goals are ideas of the future or desired results that people strive to achieve in a finite time by setting deadlines. The concept of Management by Objectives (MBO) is the creation of tangible objectives for employees to improve the organization. Management is the coordination and administration of tasks to reach a goal. This includes establishing the organization's strategy, coordinating staff efforts, and utilizing available resources.

It can also refer to the seniority structure of staff members within an organization. The evaluation of each manager's work should be a way to provide constructive feedback, not determine salary. Peter Drucker first introduced the term 'Management by Objectives' in his 1954 book The Practice of Management. He believed that if an individual executive cannot be trusted in relations with subordinates, then they cannot have their respect or trust in any case. MBO is also known as management by planning (MBP).

Regardless of their style, managers must develop their leadership skills to be effective supervisors. Management is a set of principles related to the functions of planning, organization, direction and control. It involves the efficient and effective use of physical, financial, human and information resources to achieve the objectives of the organization. The study of management has evolved into more than just the use of means to achieve ends; it now includes moral and ethical questions regarding the selection of the right ends towards which managers should strive. Kootz & O'Donnell state that “The managerial function of staffing involves managing the structure of the organization through proper and effective selection, evaluation & development of staff to cover the functions designed in the structure.” Senior management, including CEOs, Presidents, Vice Presidents, and board members are at the top tier of this management hierarchy. Goal management allows managers to determine their own bait from a limited range of options. Influential managers are aware of their team members' work on a day-to-day basis and participate in their working lives.

The underlying psychological assumption that management unconsciously made was that managers had to be more efficient; therefore, management by objectives. Many organizations are making this problem worse by promising young people that they will have challenges because they assume that these employees will be challenged by management goals. It is important for organizations to understand that management is not just about achieving goals but also about developing people.

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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