All management models had some success but non succeeded totally in injecting enough of that vitality and adaptability into organizational life to allow it to thrive and remain viable in this

age of change and sociological turmoil.

First used by Peter Drucker in 1954, M.B.O. has been further developed by many other management theoreticians

like Douglas McGregor, George Odiorne, and John Humble.

And thus M.B.O.(Management By Objectives) was born.

Management By Objectives

Management Objectives

Management is the process, consisting of planning, organizing,

actuating and controlling

performance to determine and accomplish the

objectives by the use of people and

resource.

Objectives are the aims which the

management wishes to the organization to

achieve. These are the end points

towards which all business activities like

organizing, staffing, directing and

controlling are directed.

Characteristics Of Sound Objectives that should be always kept in mind:

they should always be clear and acceptable.

they should always support each

other.they must always be precise and measurable

they should always be valid (feasible).

Thus, every objective must meet these criteria:

Management by Objectives was

introduced by Peter Drucker in the 1950s.

Partly, the idea may have become a victim of its own

success: It became so much a part of

the way business is conducted that it no

longer may have seemed

remarkable, or even worthy of comment.

It evolved into the idea of the Balanced

Scorecard, which provided a more

sophisticated framework for

doing essentially the same thing.

Drucker outlined the five stages of MBO. Each stage

has particular challenges that

need to be addressed for the whole system to work effectively.

Set or Review Organizational Objectives

MBO starts with clearly defined strategic organizational objectives. If the organization isn't clear where its going, no one working there will be

either.

Cascading Objectives Down to Employees

To support the mission, the organization needs to set clear goals and objectives, which then need to

cascade down from one organizational level to the next until they reach everyone.To make MBO goal and objective setting more effective, Drucker used

the SMART acronym to set goals that were attainable and to which people felt accountable. He said that

goals and objectives must be: •Specific

•Measurable

•Agreed (relating to the participative management principle)

•Realistic

•Time related

Monitor Progress Because the goals and objectives are SMART,

they are measurable.This monitoring system has to be timely enough so that issues can be dealt with before they threaten goal achievement.On the other hand, it is essential that you ensure

that the goals are not driving adverse behavior because they have not been designed

correctly.Set up a specific plan for monitoring goal performance

Evaluate and RewardPerformance MBO is designed to improve

performance at all levels of the organization. To ensure this, a comprehensive evaluation system is needed.As goals have been defined in a specific, measurable and time-based way, the evaluation

aspect of MBO is relatively straightforward. Employees are evaluated on their performance with respect to goal achievement All that is left to do is

to tie goal achievement to reward, and perhaps compensation, and provide the appropriate

feedback.

To make sure that everybody within the organization has a clear understanding of the

aims, or objectives, of that organization, as well as awareness of their own roles and

responsibilities in achieving those aims

Unity of management action is more likely to occur when there is pursuit of a common

objective. The greater the focus on results on a time scale, the greater likelihood of achieving

them. The greater the participation in setting

meaningful work with accountable results, the greater the motivation for completing

“Managers should avoid the “activity trap”,i.e. getting involved in day to day activities and forgetting the main objective. They should

participate in the strategic planning process in order to improve the implementability of the plan

and implement a range of systems to keep the organization on the right track.”

Peter Drucker

George S. Odiorne

“A process whereby superior and subordinate managers of an organization jointly define its common goals, define each individual’s major

areas of responsibility in terms of results expected of him and use these results as guides

for operating the unit and accessing the contribution of each of its members.”

Gain greater commitment and desire to contribute from subordinates

Gain better control and coordination toward goal accomplishment

Gain an increased ability to help subordinates

The boss puts constant pressure on the subordinate to produce results and forgets about using MBO

for commitment, desire to contribute, and management development.

Even well intentioned managers misuse MBO because they do not have the interpersonal skills or knowledge of human needs to keep their appraisal sessions from

becoming critical, chewing-out periods.