Management by Objective

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GROUP I SEMINAR
TOPIC: MECHANISM OF MANAGEMENT BY OBJECTIVES

Abstract: MBO (Management by Objectives) is an all-round and systematic management method. It plays essential roles in promoting the reform of the internal management system in an organization and improving management efficiency. In this paper, the basic connotation and Theoretical Model of MBO are explored, and then on the basis of analyzing the predicaments of reform for the Internal management system of an organization, the basic premise, principles, avenues and operation patterns of MBO in an organization are emphasized.

1.0 Introduction

Managers always have been challenged to produce results, but the modern manager must produce them in a time of rapid technological and social change. Managers must be able to use this rapid change to produce their results; they must use the change and not be used or swallowed up by it. Both they and the organizations they manage need to anticipate change and set aggressive, forward-looking goals in order that they may ultimately begin to make change occur when and where they want it to and, in that way, gain greater control of their environments and their own destinies. The most important tool the manager has in setting and achieving forward-looking goals is people, and to achieve results with this tool the manager must: first, be able to instill in the workers a sense of vital commitment and desire to contribute to organizational goals; second, control and coordinate the efforts of the workers toward goal accomplishment; and, last, help his or her subordinates to grow in ability so that they can make greater contributions. In hopes of increasing individual production and contribution, managers have resorted to many different approaches: they have tried to get commitment and hard work through economic pressure and rewards; they have sought greater production by teaching the workers the best or most efficient ways to do a job; and they have tried to cajole their employees into a sense of well-being, hoping that their comfort would produce a desire to contribute. All these approaches had some success, but none succeeded totally in injecting enough of that element of vitality and adaptability into organizational life to allow it to thrive and remain viable in this age of change and sociotechnological turmoil.

1.1 DEFINITION
The “Management by Objective” (MBO) approaches, in the sense that it requires all managers to set specific objectives to be achieved in the future and encourages them to continually ask what more can be done, is offered as a partial answer to this question of organizational vitality and creativity. As a term, “Management by Objectives” was first used by Peter Drucker in 1954. As a management approach, it has been further developed by many management theoreticians, among them Douglas McGregor, George Odiorne, and John Humble. Essentially, MBO is a process or system designed for supervisory managers in which a manager and his or her subordinate sit down and jointly set specific objectives to be accomplished within a set time frame and for which the subordinate is then held directly responsible. All organizations exist for a purpose, and, to achieve that purpose, top management sets goals and objectives that are common to the whole organization. In organizations that are not using the MBO approach, most planning and objective setting to achieve these common organizational goals is directed downward. Plans and objectives are passed down from one managerial level to another, and subordinates are told what to do and what they will be held responsible for. The MBO approach injects an element of dialogue into the process of passing plans and objectives from one organizational level to another. The superior brings specific goals and measures for the subordinate to a meeting with this subordinate, who also brings specific objectives and measures that he or she sees as appropriate or contributing to...
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