Does Management by Objectives

Work?
FEBRUARY 4, 2011
|IN STRENGTHENING ORGANIZATIONS
|BY DR. JEVON POWELL

Management by Objectives (MBO) turned sixty years old recently.  Hundreds of thousand of

managers and professionals have engaged in MBO by going through the process of setting
personal objectives that were linked to the organization’s major areas of emphasis.  Does all this
work make any difference?  The answer is a resounding, “Yes!” Researchers in the Journal of
Applied Psychology studied companies before and after implementing MBO.  They found that the
average company achieved better than a 10% performance improvement in the areas for which
goals were set.
…..
In another study around the goal setting aspects of MBO, the authors found there were three
ways to set goals:
1. The boss sets the goals
2. The individual and the boss meet to set goals
3. The individual sets their own goals (within the context of organization goals and
priorities)

Interestingly enough, it turns out that the most challenging goals were those set by the individual
setting her or his own goals.

And finally, remember to be SMART when setting goals:

S = specific
M = measurable
A = action-plan
R = realistic (or relevant)
T = time-oriented

Advantages of Blake and Mouton’s Managerial Grid

The Managerial or Leadership Grid is used to help managers analyze their own leadership styles
through a technique known as grid training. This is done by administering a questionnaire that helps
managers identify how they stand with respect to their concern for production and people. The training
is aimed at basically helping leaders reach to the ideal state of 9, 9.

Limitations of Blake and Mouton’s Managerial Grid

The model ignores the importance of internal and external limits, matter and scenario. Also, there are
some more aspects of leadership that can be covered but are not.