Mbo - Management by Objectives

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  • Topic: Management, Management by objectives, Peter Drucker
  • Pages : 7 (1381 words )
  • Download(s) : 52
  • Published : April 11, 2013
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What is MBO?

o A systems approach.

o A planning tool.

o A dynamic process.

o A participative system.

o A broad concept.

In 1955, Peter Drucker published his book titled The Practice of Managment. In his book, Peter Drucker presented his theory of management by objectives. It emphasised the importance of corporate objectives as a tool to assist managers in the successful completion of their tasks and responsibilities.

Peter Drucker believed that for a business to become successful, the activities of all of the workforce and management should be focused on a common goal. This meant that each individual in a business should be given targets or objectives that when combined would assist in achieving the corporate objectives of the business.

In his book Peter Drucker made the suggestion that managers should communicate and consult with their staff with regards to the setting of objectives and that staff should provide feedback to their superiors on several factors. These factors would include what their objectives should be, what was needed to achieve them, what managers could do to help staff achieve their objectives and what should be done in the future.

In his book Peter Drucker made the suggestion that managers should communicate and consult with their staff with regards to the setting of objectives and that staff should provide feedback to their superiors on several factors. These factors would include what their objectives should be, what was needed to achieve them, what managers could do to help staff achieve their objectives and what should be done in the future.

For management by objectives to be successfully implemented it is imperative that delegation can occur from management to staff. Peter Drucker felt that if this was not possible, management by objectives would not function properly and managers and workers should be able to control their own performance. He believed that there was no benefit from setting objectives for people and not giving them the freedom of ability to direct their own efforts to achieve their objectives.

The implementation of management by objectives can cause conflicts in a business due to varying management styles. An example of this would be that authoritarian managers would dislike the loss of power through delegation and would most likely resist the implementation of management by objectives. Peter Drucker suggested that management by self control was better than management by dominance even though this may involve changing the whole management philosophy and culture of a business. He felt that with self control brought with it self discipline which is the core principle of management by objectives and that workers want responsibility, to contribute to the business and want to help the business achieve its objectives.

Why MBO?

o Participative Management

o Accountability

o Results Oriented

o Cost-effectiveness

o Institutionally Acceptable

MBO advantages:

o Program Congruence with Institution Mission

o Participative Planning

o Identification and Solution to Problems

o Basis for Setting Budget and Staffing Priorities

o Clarification of Job Responsibilities

o Less Supervision of Subordinates

o Increased Communication Among Staff

o Increased Staff Morale

o More Fair Appraisal of Staff

o Satisfaction with Observable Results

o Managerial Efficiency and Effectiveness

o Increased Accountability to Students and Upper Management

o Visible Accountability for Upper Management

o Increased Motivation. It provides clear objectives for managers which they need to achieve and allows for the prioritisation of activities which leads to improved time management. This enables them to achieve their own objectives and the objectives of the business as a whole. This makes management by objectives act as a motivator...
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