\Management By Objectives

Management by objectives:

Management by Objectives(MBO) is a process of agreeing uponobjectives within an organization so that management and employeesagree to the objectives and understand what they are in the organization.

The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'.

MBO: A process through which specific goals are set collaboratively foe the Organisational as a whole and every unit and individual within it: the goals are than used as a basis for planning, managing organisational activities and assessing and rewarding contributions.

Benefits of management by objectives

Balance stress on objectives. MBO forces managers to set objectives with balanced stress on key result areas. Thus, crisis conditions are avoided to take place in the organization.

Better managing. MBO forces managers to think about planning for results, rather than merely planning activities or work. Managers are required to ensure that the targets are realistic and needed resources are made available to subordinates to achieve the targets. Clearly set objectives for the subordinates serve as evaluation standards as well as motivators for them. Thus. MBO results in improvement in managing.

Better organizing. The positions in the enterprise can be built around the key result areas. Managers are required to clarify organizational roles and structures. Hence better organizing.

Greater employee involvement & commitment. If MBO program is installed in an organization, people are not just doing work, following instructions and waiting for guidance and decisions form above and things are not dictated by the superiors. They are now individuals with clearly defined goals which have been formalized through their own participation in the process.

Orderly growth of organization. MOB provides for the maintenance and orderly growth of organization by means of predetermined set of objectives for everyone involved. It also provides for measurement of what is actually achieved. The progress and even the tenure of management by objectives emphasizes the ability, skill and achievement of managers rather than their personality. Thus, the orderly growth and development of the organization is ensured.

Development of effective controls. MBO not only sharpens the planning, but also develops effective controls. It specifically provides for periodic reviews and annual performance appraisals serving as the needed feedback for further streamlining the objectives or targets. It makes possible for a manager to control his own performance, high deg4ree of self control resulting in stronger motivation.

Generating of an ideal atmosphere. Doughlas mcGregor says, the motivation, the potential for development, the capacity for assuming responsibility, the readiness to Direct behavior toward organization goals are all present in people. Management does not put them there. The essential task of management is to arrange organizational conditions and methods of operation .

Limitations:

Unfavorable to managers:

Some manager have an attitude that the regular attenuation required of them By MBO System, draws heavily on their busy time schedule and is not consistent with their roles.

Problems about Goals Setting.

MBO requires issuance of proper , exhaustive guidelines to goal setters The following are difficulties in goals setting:

i. Positive and active participation from subordinates is not easily forth forthcoming.

ii. Truly verifiable goals are bot easy to formalise

iii. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough long-range goals are vital for growth and development of the organization

iv. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle of the year.

v. Over-use of quantitative goals jeopardizes the qualitative aspect which may more important than quantification in some cases.

vi. Goals tend to take orecedebce or priority over the people who use them. Any action is acceptable of it series in the attainment of Gilas, without caring for its impact on people. Thus, all these difficulties come in the way of making management by objectives operational in an organisation. Further, managing involves more than goal setting.

vii. Time-consuming nature of management by objectives. Management by objectives system is time-consuming especially in the early phases of its introduction when employees are unfamiliar with its process