Management by objectives (MBO) is a strategic approach to improving the performance of an organization. It is a process in which management defines and transmits the goals of the organization to the members of the organization with the intention of achieving each objective. This offers numerous opportunities to clarify any ambiguities regarding individual roles and expectations and to adjust objectives if necessary. With MBO, employees feel proud to participate in the organization's objectives, which improves their morale and their commitment to the organization's objectives.
Because objectives are set in consultation with subordinates, they are more difficult to achieve and more challenging than if their superiors had imposed them. In addition, since these objectives are set according to the particular capacities of the subordinates, the maximum contribution is obtained from them and, therefore, leads to the maximum use of human resources. There is no ambiguity or confusion of roles in the organization, because specific and clear objectives are established for the organization, for the division, for the departments and for the individual members. Both managers and subordinates know what they need to do and what is expected of them. The MBO allows for a high degree of self-control on the part of individual administrators and increases the decentralization of authority.
The communication process becomes more active between management and employees with this management technique. Managers must learn to manage this situation, because sometimes it is necessary to review short-term goals to achieve long-term goals. It takes a long time, sometimes 3 to 5 years, to implement the MBO program properly and completely, and some research studies have shown that these programs can lose their impact and their potency as a motivating force over a long period of time. Most managers lack the appropriate skills, knowledge, and training needed for interpersonal interaction, which are required in the MBO. It can only be made applicable when both subordinates and managers feel comfortable with it and are willing to participate in it.
In traditional organizations, authority lies with top management and flows from top to bottom. In the MBO, subordinates have the same opportunities to participate, which annoys senior management. They may feel pressured to get along well with management when it comes to setting goals and objectives, and these goals may be set unrealistically. Because management by objectives (MBO) is a results-oriented process and focuses on setting and controlling goals, it encourages managers to carry out detailed planning. After finishing my postgraduate degree, I thought about creating a website where I could share management concepts with other people.
The term “Management by Objectives” was first coined by management guru Peter Drucker in his 1954 book, The Practice of Management. Within the framework of the MBO, performance evaluation is achieved through the participation of interested managers. Management by objectives (MBO) is an effective way for organizations to improve their performance by setting clear goals that are achievable within a certain timeframe. It helps create a sense of ownership among employees as they are involved in setting their own goals. It also encourages collaboration between managers and subordinates as they work together towards achieving common objectives.
Finally, it helps create an environment where everyone is held accountable for their actions.
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