Management by Objectives (MBO)

(Management by objectives (MBO) is a comprehensive management system based on measurable and participative set objectives. MBO is now widely practiced all over the world. But, despite its large-scale application, the meaning of MBO is not yet always clear. To some people, it is an appraisal tool; others consider it as a motivational technique, while others look upon it as an instrument of planning and control.) Management by objectives (MBO) has been defined by Weihrich and Koontz as. "The comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives."

Emphasis on management by objective was not initiated or originated by any single person. Such management has been dictated by the prudence or common seen- . Of innumerable people. However, certain individuals have long placed emphasis on management by end results. MBO is a comprehensive management system based on measurable mid participatively set objectives. It has come a long way since it was first suggested by Peter F. Ducker in 1954 as a way of promoting managerial self-control. The common factor that has made MBO programs so popular in both management theory and practice is the emphasis on objectives that are both measurable and participative set. MBO is a management technique for increasing employee involvement in the planning and controlling activities. Through involvement, it is believed that employee commitment to a planned course of action will be enhanced and performance will be more efficient.

Many variations arc found in the practice of MBO. But basically it is a process through which goals, plans, and control systems of an organization are defined through collaboration between managers and their subordinates. Jointly they identify common goals, define the results expected from each individual, and use these measurements to direct the operation of their unit and to assess individual contributions. In this process, the knowledge and skills of many members of the organization are pressed into service. Instead of telling subordinates about their goals, managers ask subordinates to participate and decide about what their goal should be.

After setting up of an acceptable set of goals for each employee through a give-and-take collaborative process, the employee is asked to play a major role in devising an action plan for achieving these goals. In the final stage of the MBO process, employees are asked to develop control processes, to monitor their own performance and to suggest corrective measures if deviations from plans do occur. The entire process is a combination of planning and control.