Management by objectives (MBO)

Management by objectives (MBO),

Definition of Management by objectives (MBO):

  1. A technique of business management in which the performance of each manager is assessed and improved by setting regular objectives.

  2. The term was first outlined by management guru Peter Drucker in his 1954 book, The Practice of Management.

  3. Management by objectives (MBO) is a strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees. According to the theory, having a say in goal setting and action plans encourages participation and commitment among employees, as well as aligning objectives across the organization.

  4. A management system in which the objectives of an organization are agreed upon so that management and employees understand a common way forward.

    Management by objectives aims to serve as a basis for (A) greater efficiency through systematic procedures, (B) greater employee motivation and commitment through participation in the planning process, and © planning for results instead of planning just for work. In management by objectives practice, specific objectives are determined jointly by managers and their subordinates, progress toward agreed-upon objectives is periodically reviewed, end results are evaluated, and rewards are allocated on the basis of the progress. The objectives must meet five criteria: they must be (1) arranged in order of their importance, (2) expressed quantitatively, wherever possible, (3) realistic, (4) consistent with the organizations policies, and (5) compatible with one another. Suggested by the management guru Peter Drucker (1909-2005) in early 1950s, management by objectives enjoyed huge popularity for some time but soon fell out of favor due to its rigidity and administrative burden. Its emphasis on setting clear goals, however, has been vindicated and remains valid.

How to use Management by objectives (MBO) in a sentence?

  1. Management by objectives (MBO) is a strategic management model that aims to improve organizational performance by clearly defining objectives that are agreed to by both management and employees.
  2. You can try to use a management by objectives style that will let your workers know what they need to be shooting for.
  3. Hiring managers asked for input about the management by objectives to incoming employees by presenting the companys goals for the future and their steps for moving forward as a cohesive unit.
  4. According to the theory, having a say in goal setting and action plans encourages participation and commitment among employees, as well as aligning objectives across the organization.
  5. The strategy was formulated by Peter Drucker in the 1950s, detailing five steps that organizations should follow.
  6. Critics of MBO argue that it leads to employees trying to achieve the set goals by any means necessary, often at the cost of the company.
  7. We had a management by objectives policy which guaranteed us to run things more smoothly and easily than we had before.

Meaning of Management by objectives (MBO) & Management by objectives (MBO) Definition