Mbo

Management By Management By ObjectivesObjectives

By By

Muskan SharmaMuskan Sharma

IntroductionIntroduction

MBO is comprises of two majors MBO is comprises of two majors wordswords

1.Management1.Management

2.Objectives2.Objectives

1.Management1.Management

Management is a process, consisting Management is a process, consisting of planning, organizing, actuating of planning, organizing, actuating and controlling, performance and controlling, performance determine and accomplish the determine and accomplish the objectives by the use of people and objectives by the use of people and resourceresource

2.Objectives2.Objectives

Objectives are the aims which the Objectives are the aims which the management wishes to the management wishes to the organization to achieve.organization to achieve.

These are the These are the end point end point towards towards which all business activities like which all business activities like organizing, staffing, directing and organizing, staffing, directing and controlling are directed.controlling are directed.

Characteristics of Sound OnjectiveCharacteristics of Sound Onjective

It should be clear and acceptable.It should be clear and acceptable.

It should support each other .It should support each other .

It must be precise and measurable.It must be precise and measurable.

It should be valid (feasible).It should be valid (feasible).

Thus, every objective must meet these Thus, every objective must meet these criteria:criteria:

Is it Is it SpecificSpecific?? Is it Is it MeasurableMeasurable?? Is it Is it AppropriateAppropriate?? Is it Is it RealisticRealistic?? Is it Is it Time-boundTime-bound

Is it Is it specificspecific? Does it clearly talk about one thing, and both the ? Does it clearly talk about one thing, and both the staff member and the supervisor know exactly what output staff member and the supervisor know exactly what output they are talking about.they are talking about.

Is it Is it measurablemeasurable? Can the output be quantified?? Can the output be quantified?

Is it Is it appropriateappropriate? Does the staff member have the power to ? Does the staff member have the power to accomplish the task? Will it work?accomplish the task? Will it work?

Is it Is it realisticrealistic? Based upon experience & data, can the output ? Based upon experience & data, can the output be achieved in the allotted time with a given amount of be achieved in the allotted time with a given amount of resources?resources?

Is it Is it time-boundtime-bound? Is a specific, reasonable amount of time ? Is a specific, reasonable amount of time specified to accomplish each objective?specified to accomplish each objective?

Hierarchy of Objectives

Types of ObjectivesTypes of Objectives

Routine objectives Routine objectives

Innovation objectives Innovation objectives

Improvement objectivesImprovement objectives

8 Key Result Areas Where Managers 8 Key Result Areas Where Managers Must Pursue Clear ObjectivesMust Pursue Clear Objectives

Marketing Marketing Innovation Innovation Human organization Human organization Financial resources Financial resources Physical resources Physical resources Productivity Productivity Social responsibility Social responsibility Profit requirementsProfit requirements

Management by ObjectivesManagement by Objectives

Management by Objectives (MBO) was first Management by Objectives (MBO) was first outlined by Peter Drucker in 1954.outlined by Peter Drucker in 1954.

MBO is a MBO is a systematic and organizedsystematic and organized approach approach that allows management to focus on that allows management to focus on achievable achievable goalsgoals and to attain the and to attain the best possible resultsbest possible results from available resources. from available resources.

It aims to It aims to increase organizational performanceincrease organizational performance by by aligning goalsaligning goals and subordinate objectives and subordinate objectives throughout the organization. throughout the organization.

Employees get strong input to identify their Employees get strong input to identify their objectives, time lines for completion, etc.objectives, time lines for completion, etc.

MBO includes ongoing tracking and feedback in MBO includes ongoing tracking and feedback in the process to reach objectives.the process to reach objectives.

MBO is a PhilosophyMBO is a Philosophy

Reflects a Reflects a Proactive Proactive way of managing way of managing that is:that is:

Results oriented,Results oriented, Emphasizes Emphasizes accomplishments accomplishments

rather than inputs,rather than inputs, Encourages Encourages participation participation at all levels at all levels

of an organization (of an organization (collaborative; collaborative; shared power & self-managementshared power & self-management

Principle of MBOPrinciple of MBO The principle behind MBO is to make sure The principle behind MBO is to make sure

that everybody within the organization has that everybody within the organization has a clear understanding of the aims, or a clear understanding of the aims, or objectives, of that organization, as well as objectives, of that organization, as well as awareness of their own roles and awareness of their own roles and responsibilities in achieving those aims. responsibilities in achieving those aims.

Unity of magt action is more likely to occur Unity of magt action is more likely to occur when there is pursuit of a common objective.when there is pursuit of a common objective.

The greater the focus on results on a time The greater the focus on results on a time scale, the greater likelihood of achieving scale, the greater likelihood of achieving them.them.

The greater the participation in setting The greater the participation in setting meaningful work with accountable results, meaningful work with accountable results, the greater the motivation for completingthe greater the motivation for completing

INPUTSOUTPUTS

Strategic Planning

Organiza-tional

development

Information handling

Subsystem

Human Resource Planning And Development

Career planning

Reward System

Budgeting Others

Action

Planning

Implementation

Control & Appraisal

Setting Objectives

Hierarchy of Objectives

Transformation Process

Reenergizing the system

External constraints external opportunities & threats

Organizational

Boundary

Management by objectives aims to Management by objectives aims to serve as a basis forserve as a basis for

(A) greater efficiency through (A) greater efficiency through systematic procedures, systematic procedures,

(B) greater employee motivation and (B) greater employee motivation and commitment through participation in commitment through participation in the planning process, and the planning process, and

(C) planning for results instead of (C) planning for results instead of planning just for work planning just for work

MBO AdvantagesMBO Advantages

MBO programs continually MBO programs continually emphasize what should be done in emphasize what should be done in an organization to achieve an organization to achieve organizational goals. organizational goals.

MBO process secures employee MBO process secures employee commitment to attaining commitment to attaining organizational goals. organizational goals.

MBO DisadvantagesMBO Disadvantages

The development of objectives can The development of objectives can be time consuming, leaving both be time consuming, leaving both managers and employees less time managers and employees less time in which to do their actual work. in which to do their actual work.

The elaborate written goals, careful The elaborate written goals, careful communication of goals, and communication of goals, and detailed performance evaluation detailed performance evaluation required in an MBO program required in an MBO program increase the volume of paperwork in increase the volume of paperwork in an organization. an organization.

THANK YOUTHANK YOU