Management by Objective (MBO)

Introduction:

 Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.

It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

Principle:

The principle behind Management by Objectives (MBO) is 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. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization.

The MBO style is appropriate for knowledge based enterprise when your staff is competent. It is appropriate in situations where you wish to build employees' management and self-leadership skills and tap their entrepreneurial creativity,tacit knowledge and initiative.

Advantages:

•   MBO programs continually emphasize what should be done in an organization to achieve organizational goals.
•   MBO process secures employee commitment to attaining organizational goals.

Disadvantages:

•   The development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work.
•   The elaborate written goals, careful communication of goals, and detailed performance evaluation required in an MBO program increase the volume of paperwork in an organization.
  
  
  * Some times the goals are unachieveble which leads to failure of MBO