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Understanding Management by Objectives

Management by Objectives (MBO) is a strategic management model that aims to improve organizational performance by aligning goals throughout the organization. MBO involves management and employees agreeing on objectives and action plans to encourage participation and commitment. The goal is to enhance effectiveness by making the organization more results-focused and encouraging independence among managers. An example of MBO would be a call center setting goals to increase customer satisfaction by 10% while reducing call times by one minute.

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196 views5 pages

Understanding Management by Objectives

Management by Objectives (MBO) is a strategic management model that aims to improve organizational performance by aligning goals throughout the organization. MBO involves management and employees agreeing on objectives and action plans to encourage participation and commitment. The goal is to enhance effectiveness by making the organization more results-focused and encouraging independence among managers. An example of MBO would be a call center setting goals to increase customer satisfaction by 10% while reducing call times by one minute.

Uploaded by

Ravi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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WHAT IS MANAGEMENT BY OBJECTIVE(MBO)?

● MBO is a management practice which aims to increase organizational performance by aligning


goals and subordinate objectives throughout the organization.
● 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.

● The MBO method is supposed to enhance organizational effectiveness by getting the


organization to become more result focused. It is also supposed to encourage independence and
entrepreneurism amongst line managers. This philosophy originated sometime in the early
1970s.
PROCESS OF MBO.
EXAMPLE OF MBO.

● A company can set various goals with its employees. In the case of a
call center, an MBO could be to increase customer satisfaction, say,
by 10%, while reducing call times by one minute. The onus is now
on finding ways to achieve this goal. Once that’s decided on, it’s
important to get employees on board and then monitor their
progress, provide feedback, and reward those who do a good job.
BENEFITS OF MBO.

● Management by objectives helps employees appreciate their on-the-job roles


and responsibilities.
● The MBO approach usually results in better teamwork and communication.
● It provides the employees with a clear understanding of what is expected of
them. The supervisors set goals for every member of the team, and every
employee is provided with a list of unique tasks.
● Every employee is assigned unique goals. Hence, each employee feels indispensable
to the organization and eventually develops a sense of loyalty to the organization.
MANAGEMENT BY
OBJECTIVE(MBO)
NAME:-
SUBJECT:- FUNDAMENTAL OF
MANAGEMENT
ASSIGNMENT:- 1

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