MANAGEMENT BY OBJECTIVES

It is a process whereby the superior and subordinate managers of an enterprise jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members.

                                                                                    -           GEORGE S. ODIORNE

MBO is 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 objective.

MBO PROCESS

Step – 1:          Set down informally the goals of the enterprise.

Step – 2:          Objective the goal so set out and define measures of performance.

Step – 3:          The goals and sub-goals at all management levels must them be set out.

Step – 4 :         Adjustment in the organization structure.

Step – 5:          The goals to be set at all levels must be joint and agreed ones.

Step – 6:          Continuous feedback from appraisal of internal

                        Goals and the enterprise goal as it is set.

Step – 7:          Appraisal of results proceed continuously against the goals at all levels.

Step – 8:          Review of sub-results throws light on organization results.

Benefits of MBO

1.                  Improvement of managing

2.                  Clarification of organization.

3.                  Encouragement of personal commitment

4.                  Development of effective controls.

Weakness of MBO

1.                  Failure to teach the philosophy of MBO

2.                  Failure to give guidelines to goal setters.

3.                  Difficulty of setting goals

4.                  Emphasis on short-term goals

5.                  Danger of inflexibility

6.                  Other dangers.