Management Strategic Planning Process by ObjectivesManagement by Objectives method

Peter Drucker

Management by Objectives (MBO) relies on the defining of objectives for each employee and then comparing and directing their performance against the objectives which have been set. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identifying their objectives, time lines for completion, etc. M O includes ongoing trac!ing and feedbac! in the process to reach objectives. Management by Objectives was first outlined by Peter Drucker in "#$% in his boo! &'he practice of Management&. (ccording to )ruc!er managers should avoid &the activity trap&, getting so involved in their day to day activities that they forget their main purpose or objective. One of the concepts of M O was that instead of just a few top*managers, all managers of a firm should participate in the strategic planning process, in order to improve the implementability of the plan. (nother concept of M O was that managers should implement a range of performance systems, designed to help the organization stay on the right trac!. +learly, Management by Objectives can thus be seen as a predecessor of ,alue ased Management-

M O principles are.

Cascading of organizational goals and objectives,

Specific objectives for each member, Participative decision making,

Explicit time period, and

Performance evaluation and feedback.

Management by Objectives also introduced the SMART method for chec!ing the validity of the Objectives, which should be &SM(/'&.

Specific Measurable

chievable !ealistic, and "ime#related.

In the #0s, Peter )ruc!er put the significance of this organization management method into perspective, when he said. 1It&s just another tool. It is not the great cure for management inefficiency... M O wor!s if you !now the objectives, #02 of the time you don&t.1

+ompare with Management by Objectives. ,alue ased Management 3 /esults* ased 4eadership 3 /(+I 3 +hange Management 3 Seven 5abits 3 Seven Surprises 3 Path*6oal 'heory 3 4eadership +ontinuum 3 /esult Oriented Management More management models 3 More on Management by Objectives and SM(/'