Dear Friend Rashika,
Here you go.....about MBO (got it from website for MBA & BBA studends)
Management by objectives- MBO
The concept of MBO is introduced by famous management scientist Peter F Drucker in his book “The practice of management”. As per the concept the organizational goals are broken down to different level objectives and assigned to individuals at different level in order to have the organizational goal/ objective is met ultimately. Even though the concept is well laid and popularized by Peter F Drucker, he himself has stated that MBO is not a new concept but already in place with a few organizations
Definition: MBO can be defined as a set of targets or objectives set by mutual agreement between supervisors and employees or between employer and employees with a course of action, timeline and measuring and monitoring techniques to achieve the objective.
Process of MBO : Management by objectives starts at the top level of management by deciding the organizational goal. Ultimate focus of every organization is to make profit. Management will lay down some policies and programs to meet this goal. In order to achieve this there need to have a lot of sub actions carried out at various level of the organization. Top level will decide their goal and assign the sub actions to the bottom level.
Objective need to be specific: The set goal to be clear and specific. Need to be realistic and detailed.
Mutual agreement: The manager and employee to mutually agree up on the target and course of actions.
Measurable: The objective should be measurable in terms of set strategies. E.g.: In terms if revenues or number of customer visits done with in stipulated time period
Attainable:
Time line: There should be a time line for the objective to be met or completed. This time line should be achievable and realistic
Advantages:
Sharpens decision making
Motivation to employees as they are a part of decision making
Commitment to attain the goals as the employee themselves set the goals.
Managers are more closely looking at end result rather than looking at routine activities
Role clarifying, for employees
Boss- employee relationship increases
More control over the middle level and bottom level management
Managers can see that the individual objectives and organizational objectives are mutually linked
Practical difficulties and draw backs
Too much focused on certain areas – Over emphasize on goal setting
Other business is not concentrated as only objectives are focused
Only short term goals are set
Documentation is difficult
No objective for higher level managers
Goals are difficult to set
How to make MBO effective
Teach the system thoroughly to the employees
Goals need to be set in consultation with employees
A good measuring and monitoring need to be done
S_M_A_R_T (Specific, Measurable, Attainable, Revenue generating, Time bound)
Goals are difficult to set
Criticism
MBO has been criticized for its over emphasize on objectives and difficulty for implementation. Scientists states that, the lack of detailed and thorough knowledge about the system may lead to collapse of organizational goals or setting of wrong goals.
W. E Deming, points that setting up of production goals may force employees and managers to leave the best practices and to go for any ways they can which may lead to unhealthy practices and poor quality of products and services.
Regards,
R.Gopinath