Management By Objectives
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.
Management by Objectives (MBO)
Definition
Management by Objectives (MBO) is a strategic management model aimed at improving organizational performance by clearly defining objectives that are agreed upon by both management and employees. According to this theory, involving employees in goal setting and action planning can encourage their participation and commitment, aligning goals across the organization.
Origin
The concept of MBO was first introduced by Peter Drucker in 1954 in his book 'The Practice of Management.' Drucker believed that clear goal setting and performance evaluation could help organizations achieve their strategic objectives more effectively.
Categories and Characteristics
MBO can be categorized into the following types:
- Individual MBO: Focuses on personal career development and performance improvement.
- Team MBO: Emphasizes team collaboration and achieving common goals to enhance team performance.
- Organizational MBO: Focuses on the strategic goals and performance of the entire organization.
The main characteristics of MBO include:
- Clear Goal Setting: Goals must be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART criteria).
- Employee Participation: Involving employees in the goal-setting process increases their commitment and accountability.
- Regular Evaluation and Feedback: Regular evaluations and feedback ensure the achievement and adjustment of goals.
Case Studies
Case Study 1: A tech company improved its R&D team's innovation capabilities through MBO. The company and the R&D team jointly set annual innovation goals and regularly evaluated progress. As a result, the number and quality of innovation projects significantly increased.
Case Study 2: A retail company enhanced its sales team's performance through MBO. The company and the sales team jointly set quarterly sales targets and provided necessary training and resources. Ultimately, the sales team exceeded their targets, and the company's market share increased.
Common Questions
Question 1: What if the goals are too vague?
Answer: Ensure that goals adhere to the SMART criteria: Specific, Measurable, Achievable, Relevant, and Time-bound.
Question 2: What if employees lack interest in the goals?
Answer: Increase their commitment and accountability by involving them in the goal-setting process.
