MBO AND MBE

By:~ Bhuvan

INTRODUCTION
Definition of MBO
Meaning
Effective participation of
individuals
Identifying common goals
Determination of objectives

Quote on MBO
MBO is a comprehensive
managerial system that integrates
many key managerial activities in a
systematic manner and that is
consciously directed towards the
effective and efficient achievement of
organizational and individual
objectives.
~Koontz and Weihrich

Main principles of MBO

Clear understanding
Empowered employees

Features Of MBO
It is not only a technique but also
a philosophy
Setting objectives
Provides evaluation and
mechanism

Contd,
Creates linkage between
organizational goals and
individual goals
Rewards are governed by the
results achieved
Continuous process

MBO Strategy : Three

Basic Parts

Assignment of objects
Performance reviews
Appraisal for employees

Stages Of MBO
Defining objectives
Analyzing
Setting standards
Setting objectives
Aligning targets
Establishing the system

Advantages Of MBO
Targeted Planning
Participation and Collaboration
Motivation
Efficient Communication
Training and Development
Performance and Appraisal

Limitations Of MBO
Difficulty in teaching MBO
philosophy
Failure to provide guidelines to goalsetters
Difficulty in setting goals
Emphasis on short term objectives
Danger of inflexibility

MBE

(Management by
exception)
Introduction*

Definition
Approaches

to MBE

Basic
Intermediate
Advanced

SIX PHASES OF MBE

Assignment of values
Projection of meaningful measurements
Make observation
Comparison of actual values with
expected performance
Reporting the balance to management
Decision making

Advantages of MBE
Availability of time
Opportunity to utilize talent
Increases confidence and motivation
Uses the best knowledge
It helps to identify problems before
they become big
Better organizational cohesiveness
and achievement of objectives

Disadvantages of MBE
MBE is not puzzle solving
You must have the truth
You must stay in touch with
your people~Management by
walking around

~SUMMARY~
MBO
System of managing
Results in better managing
Effective control
Failure in explaining philosophy
Difficulty in goal setting

Contd,
MBE
Its the idea of minimizing
responsibility
Obtaining accuracy in results
Involves shaping companys
future
Managers should be trained
properly