Management by objectives (MBO) is a goal-based management style that has been around since the 1950s. It was first described by Peter Drucker in his book The Practice of Management and has since been used by many organizations to improve their management style. MBO is a strategy with clearly defined objectives that are agreed upon by both management and employees. It helps employees appreciate their roles and responsibilities at work, and it also results in better teamwork and communication.
The purpose of MBO is to develop a plan to grow a business. Effective planning requires an attitude of never being satisfied with the organization's current performance. Communication is the central pillar of any organization to maintain and thrive, and MBO helps to facilitate this communication process between management and employees. It also helps to create a positive and open work environment, as well as providing clarity in ambiguous roles by defining clear objectives for each team member.
MBO also helps to motivate employees, as they have some involvement in the goal-setting process. They know what management expects from them under this management style, and when supervisors evaluate their employees, they use agreed objectives to explain where an employee has succeeded and where they should spend more time in the future. This type of management emphasizes planning and personal responsibility of employees, which can lead to increased productivity. However, some argue that when MBO is used as a tool within a broader and more comprehensive management plan, it can go a long way in simplifying management and optimizing it for greater efficiency.
It is important to note that when management focuses too much on a goal, it doesn't make changes when necessary. Therefore, it is important to use MBO as part of a larger toolset for many companies looking to improve their management style. In conclusion, MBO is an effective goal-based management style that can help organizations improve their communication process between management and employees, create a positive work environment, motivate employees, and increase productivity. It should be used as part of a larger toolset for companies looking to improve their management style.