Management by Objective (MBO)

Management by objectiverefers to a management process of clearly defining objectives within a company that are agreed to by both the management and the employees in order to improve company’s performance.

Management by objectives definition (MBO)

Management by objectives refers to a management process of clearly defining objectives within a company that are agreed to by both the management and the employees in order to improve company’s performance.

Management by objectives main goals are to serve as a basis for greater efficiency through systematic procedures, to motivate employees through participation in the planning process and to plan for results instead of planning just for work.

Management by objectives criteria

1. Objectives have to be arranged in order of their importance.

2. They have to be expressed quantitatively, wherever possible,

3. They need to be realistic.

4. Objectives have to be consistent with the organization’s policies.

5. They ought to be compatible with one another.

Advantages and disadvantages of MBO

The biggest advantages of MBO are the improvement of employee motivation and commitment, and enabling of better communication between management and employees.

The biggest disadvantage is that it emphasizes the setting of goals to attain objectives, rather than working on a systematic plan to do so.