Management by objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives

and understand what they need to do in the organization. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'.[1] The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee¶s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. According to George S. Odiorne, the system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization 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.[2]
===Unique features and advantages of the MBO process=== The principle behind Management by Objectives (MBO) is for employees to have a clear understanding of the roles and responsibilities expected of them. They can then understand how their activities relate to the achievement of the organization's goal. MBO also places importance on fulfilling the personal goals of each employee.

Some of the important features and advantages of MBO are: 1 Motivation Involving employees in the whole process of goal setting and increasing employee empowerment. This increases employee job satisfaction and commitment. 2 Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the organization and also to solve many problems. 3 Clarity of goals 5 Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed on them by another person. 6 Managers can ensure that objectives of the subordinates are linked to the organization's objectives.

marketing. on average. a 56% gain in productivity. in a 1991 comprehensive review of thirty years of research on the impact of Management by Objectives. 2. information systems etc. Some objectives are collective. As an example of the influence of management buy-in as a contextual influencer. sales. Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed. R&D. services. human resources. Companies with CEOs who showed low commitment only saw a 6% gain in productivity. Pay [[incentive]]s (bonuses) are often linked to results in reaching the objectives. to relative buy-in by leadership and stakeholders. == Limitations == There are several limitations to the assumptive base underlying the impact of managing by objectives.== Domains and levels == Objectives can be set in all domains of activities (production. finance. including: 1. That context includes everything from the availability and quality of resources. .). == Practice == Objectives need quantifying and monitoring. for a whole department or the whole company. others can be individualized. Reliable [[management information systems]] are needed to establish relevant objectives and monitor their "reach ratio" in an objective way. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes. It underemphasizes the importance of the environment or context in which the goals are set.

<ref>[http://www. The MIT Press. When this approach is not properly set. The key difference is that rather than 'set' objectives from a cascade process. Deming also pointed out that Drucker warned managers that a systemic view was required <ref>Drucker. objectives are discussed and agreed upon. ==Arguments against== MBO has its detractors. self-centered employees might be prone to distort results. agreed and managed by organizations. In this case.3. 1973</ref> and felt that Drucker's warning went largely unheeded by the practitioners of MBO. therefore. Edwards. "Out of the Crisis". not at what they ''should do''. "Management Tasks. which usually results in poor quality.pmhut. . who argued that a lack of understanding of systems commonly results in the misapplication of objectives. A saying around MBO "What gets measured gets done". narrow fashion.<ref>Deming. Why measure performance? Different purposes require different measures is perhaps the most famous aphorism of performance measurement. it still has its place in management today. ISBN 0262541165</ref> Additionally. Harper & Row. notably among them [[W. Alex Sherrer. which can be advantageous. While MBO is not as fashionable as it was before._Edwards_Deming#Key principles|key principles]] encourages managers to abandon objectives in favour of leadership because he felt that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of an objective. managing by objectives would be counterproductive. Edwards Deming]]. Employees are often involved in this process. Companies evaluated their employees by comparing them with the "ideal" employee.com/demings-14-points-andquality-project-leadership Deming s 14 Points and Quality Project Leadership] ''J. March 3. Practices". Responsibilities. 1994. falsely representing achievement of targets that were set in a shortterm. W. The use of MBO must be carefully aligned with the culture of the organization. Peter. Deming stated that setting production targets will encourage resources to meet those targets through whatever means necessary. 2010''</ref> Point 7 of Deming's [[W. Trait appraisal only looks at what employees ''should be''. to avoid potential problems SMART and SMARTER objectives need to be agreed upon in the true sense rather than set.

The ADKAR Model Change management has been developed over a period of time and one of the models that has played an influence in change management is the ADKAR model. but has become extremely popular with organizations or corporations that would like to initiate significant change to processes that can include both work tasks and culture. If not. Change management has been around for a while. One of the goals of change management is with regards to the human aspects of overcoming resistance to change in order for organizational members to buy into change and achieve the organization¶s goal of an orderly and effective transformation. Desire ± Either the individual or organizational members must have the motivation and desire to participate in the call for change or changes. Most organizations want change implemented with the least resistance and with the most buy-in as possible. there are five specific stages that must be realized in order for an organization or an individual to successfully change. An individual or organization must know how to change. They include: y y y y y Awareness ± An individual or organization must know why a specific change or series of changes are needed. Organizational Change Management Organizational change management takes into consideration both the processes and tools that managers use to make changes at an organizational level. change must be applied with a structured approach so that transition from one type of behavior to another will be smooth. .Change Management Someone who has worked in a corporation or with a large organization might have heard the phrase ³change management´ used from time to time. Change management can be defined as a set of processes that is employed to ensure that significant changes are implemented in an orderly. Procsi developed the ADKAR model. and systematic fashion to effect organizational change. an individual or organization will probably revert to their old behavior. controlled. For this to occur. In this model. Ability ± Every individual and organization that truly wants to change must implement new skills and behaviors to make the necessary changes happen. Knowledge ± Knowing why one must change is not enough. Reinforcement ± Individuals and organizations must be reinforced to sustain any changes.

If an organization tries to make changes that are inherently bad or that the organization does not receive positively. it is important that individuals in the organization who need to make modifications to their behavior exhibit ³buy in. However. . citing issues with current procedures and then communicating the benefits for both the individual and organization. employee behavior. which is at times very difficult. certain changes sometimes produce a tremendous amount of resistance. it will be much more difficult or close to impossible to implement these changes without significant resistance. Organizations can enhance ³buy in´ by first explaining the changes to be made. change can be extremely beneficial. it is important for managers to estimate the impact that they will have on the organization and individual employee on many levels including technology. The Importance of ³Buy In´ For an individual or organization to achieve change effectively. The end result is that management must help employees accept change and help them become well adjusted and effective once these changes have been implemented. processes. each individual and the organization as a whole have to work hard to make the necessary behavior modifications. management¶s first responsibility is to identify processes or behaviors that are not proficient and come up with new behaviors. work processes. At this point management should assess the employee¶s reaction to an implemented change and try to understand the reaction to it. that are more effective.Management¶s Role in the Organizational Change In most cases. In many cases. etc. In addition. etc. It is management¶s job to help support workers through the process.´ ³Buy in´ means that the organization as a whole understands that the changes that need to be made are ultimately beneficial to both the individual and the organization. Once changes are identified.