The Process Of Management By Objectives (Mbo)

 Concept of MBO

Management by objectives is a process that has been developed to facilitate goal setting. Some books refer to it as management by results or management by goals.

The concept of MBO was articulated by Peter Drucker, who saw MBO as an integrative management tool that could link the goals of the individuals to those of the firm as a whole.

It is a collaborative goal setting process where the manager and the subordinate work together in setting the subordinate goals.
The MBO system starts with goal setting at the top management level. These goals are reflected as the goal setting process progresses level by level (downward) throughout the organization.

Koontz defines MBO as "a comprehensive managerial system that integrates many key managerial activities in a systematic manner consciously directed at the effective and efficient achievement of organizational and individual objectives (students need to note that there are several views about MBO, some see it as a planning tool and others as a performance appraisal tool).

Being a collaborative goal setting between the manager and his subordinate, both willingly determine goals for the subordinate on the premises that the subordinates future rewards will depend on how well he attains the goals.

It assumes that:

• Goals should start at the top and then flow down to each successive level until the bottom of the organization.

• Through the process of collaboration employees will become more committed to achieving organizational goals. They will take part in setting their own goals and will be rewarded in relation to their success in reaching those goals.