Management by Objectives (MBO) is a strategic management model that helps organizations improve their performance by setting clear objectives that are agreed upon by both management and employees. This approach is based on the idea that when employees understand their roles and responsibilities, they are more likely to work hard to achieve their goals. Additionally, MBO encourages better teamwork and communication, as well as accountability to the organization. Peter Drucker's 1954 book, “The Practice of Management”, highlighted the importance of MBO and how it connects previously disconnected ideas.
As a leader, you have expectations for your team and want to see a specific level of performance and efficiency. Using an objective management approach can help you manage your team effectively. However, it is important to remember that success depends on the cooperative spirit of human beings and their prevailing attitudes. Therefore, objectives should include not only the personal and occupational goals of the individual manager, but also the corporate goal manager and higher participation in common.
When used as part of a broader and more comprehensive management plan, MBO can help simplify management and optimize it for efficiency. It is also important to note that MBO should not be used as a tool to determine salary or to perpetuate hostility, resentment, or distrust between a manager and his subordinates. Organizations of all types need to follow effective management frameworks to better achieve their individual objectives. As currently practiced, MBO is simply industrial engineering with a new name, applied to higher managerial levels and with the same resistances intact.
It does not adequately take into account the growing interdependence of managerial work in organizations. Overall, MBO is an effective tool for companies looking to improve their performance and achieve their goals. By setting clear objectives that are agreed upon by both management and employees, companies can create cohesive communication between all partners within the organization.