Define Management By Objective (MBO): Meaning, Process, Objectives, Advantages & Disadvantages

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What Is Management By Objective (MBO)?

Management By Objective is a system in which each employee participates in determining personal objectives as well as it means by which he or she hopes to achieve these objectives. It makes each employee a manager of his own particular work.

In the changing economic environment old techniques of management do not give better results. The expansion of business size and changes in business technology have required a new thinking in managerial approach. The management by objective is a new technique of managerial which enables the subordinates to participate at times of fixing their individual objectives and the objective of the organisation as whole.

Process Of Management By Objective (MBO)

MBO is used to plan goals for the employee through their own participation. The goals will act as a motivational factor and help in increasing employee efficiency. The Step or Process Of MBO involves the following steps.

Setting of objective

It is the first step of the MBO process, where the purpose and mission of the organisation is determined by the top level management with consent of subordinates. After the setting of objectives various long-term plans of the enterprise are drafted.

Clarifying organisational roles

Sometimes organisational roles are not properly clarified and specified responsibility for attaining the objective is not fixed. There should be clear cut assignment of tasks & fixation of responsibilities so that organisation roles should be clearly spelt out.

Setting Subordinates objective

After the determination of the objective of the enterprise the step should be taken to set the objective of each department and sections of the enterprise. The superior should discuss with the subordinates about the objectives which he can accomplish & time from them.

The departmental objectives should be fixed in such a way so that their achievement leads to the attainment of organisation objectives as a whole.

Determination of targets of manager

After the setting of departmental objectives the next step is to set the objective of each manager. These are determined by keeping the general objective of the organisation. It helps to know what is to be achieved by a particular manager in what time and which provides a scope for future adjustments.

Application of control system

It is the process of the most important steps in management by objectives (MBO). It is one of the criteria through which the organisation ensures effectiveness for each department, whether these are going to achieve organisational goals or not.

Holding periodical meeting

It is one of the important steps in the process of MBO to hold periodical meetings. It provides opportunity to managers and Subordinates for discussing the progress of work and the implementation of plans. It also enables discussion regarding the availability of facilities & difficulties in the implementation of predetermined plans.

Recycling Objectives

Recycling of objectives denotes a joint and interactive process objective can’t be set in isolation rather than they set at the top & Communication to the button on vice-versa. There should be proper consultation before deciding about the objectives so, recycling of objectives helps in the achievement of organisational goals easily.

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