MANAGEMENT BY

OBJECTIVES: AS DEVELOPED
BY PETER DRUCKER,
ASSISTED
BY HAROLD SMIDDY

Submitted by: gulbaz maqbool

Muhammad Rohan
Muhammad Talha
Amjad niazi
 INTRODUCTION:

• In this article, we discuss the early development of the philosophy and concept of
management by objectives (MBO) as it has been traditionally defined in the literature.
• Peter Drucker worked out the philosophic foundations of MBO with the assistance of
Harold Smiddy of the General Electric Company, who was already putting the "manager's
letter" concept into practice in the late 1940
 WHAT IS MBO

• A process whereby superior and subordinate & managers of organization jointly identify
their common goals. define each individual majority of responsibility in terms of results
expected and use their measures as guide for operating everything.

• Management by objectives (MBO) is 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
 DRUCKER AND SMIDDY, PRE-GE DAYS

• Mbo conceptualize by drucker

• First put into practical by smiddy
• Smiddy design and wrote management philosophy
• Drucker and smiddy management consultant group was so close
• Drucker and smiddy have similar experiences that led to Drucker's developing the philosophy
and to Smiddy's initial decision to try it in practice
 SMIDDY LIFE SPAN

• Vice president of ge company

• Close personal friend of drucker
• Godfather of practice of management
• Smiddy was a partner at Booz, Allen, and Hamilton
• smiddy learned the concept of the "manager's letter
 NUMEROUS AWARD (SMIDDY)

• The Taylor Key,

• Gantt Medal

• Wallace Clark Medal (Green- wood & Zimet, 1979].

 SMIDDY BEFORE GOING TO GE

• Smiddy was a partner of Booz, Allen, and Hamilton

• Learned concept of manager’s letter
• Manager letter( write a letter to superior)
 JOHN TARRANT

• In 1940 he wrote a book on drucker

• But drucker response that I did not invent mbo but sloan used term mbo first
FIRST MEETING OF DRUCKER AND SMIDDY

• Drucker and Harold Smiddy first met after World War II

• Smiddy approach Ducker after reading concept of corporation
• Between 1946 and 1948, they met four or five times.
• Drucker asked Smiddy to join him on this project, Smiddy declined, having just decided to
join GE.
 ACCORDING TO DRUCKER

• Objectives are something you look at first you can do no planning, organizing.

• The earlier theorists define the work of managing as planning, organizing, integrating, and
measuring the work of the organization.

• To Drucker, these activities are the implementation of what he calls the real work of managing.
 MANAGER'S LETTER

• The "manager's letter" required a job holder (manager or individual contributor)

to write a letter to his or her superior indicating what the goals for the next.
 DEBATE ON MANAGER’S LETTER

• In 1952 he debated on manager’s letter

• Drucker did assist smiddy at ge
• Drucker & smiddy shared long time discussion on ge problems, operation research, manager
development.
 CONTT…

• Smiddy also invited his associates once he asked internal management consultants Williams
• After then manager’s letter converted into monthly letter
• Where one set goals, activities, standards for each month and reported results against previous
months
 SMIDDY ALWAYS SAID..

• Manager letter was actually written by managers/individuals

• For personal guidance not for boss but self measuring
• Without it was not possible to measure frequently performance
 STEPS IN MANAGMENT BY OBJECTIVES

• Define organizational goals

• Define employee objective
• Continous monitoring of performance
• Performance evaluation
• Providing feedback
• Performance appraisal
 DEFINE ORGANIZATIONAL GOALS

Organizational goals are general targets that executives set for the company
 DEFINE EMPLOYEE OBJECTIVE

Employee objectives are targets that an employee and their manager agree on to measure the
employee's job performance.
CONTINOUS MONITORING OF PERFORMANCE

Performance monitoring is a systematic and periodic observation of

performance over time in order to develop or verify performance records, to
uncover inefficient and ineffective practices,
 PERFORMANCE EVALUATION 

Performance Evaluation is defined as a formal and productive procedure to

measure an employee's work and results based on their job responsibilities.
 PROVIDING FEEDBACK

When you give feedback, it means you offer a helpful response to someone's

work or idea
 PERFORMANCE APPRAISAL

A performance appraisal is a systematic and periodic process of measuring

an individual's work performance against the established requirements of the
job
 EARLY MBO

• ALLOCATING DATES WITH GOALS

• ALLOCATING BUDGET WITH THE GOALS