‘Management by Objectives’ (MBO) is a management approach introduced by Peter Drucker in the 1950s that places emphasis on establishing clear objectives and aligning individual and organizational goals.
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MBO entails setting specific and measurable objectives that are agreed upon by managers and employees alike. These objectives serve as performance targets and provide a basis for evaluating individual and team accomplishments. Regular feedback and performance reviews are integral to the MBO process to track progress toward objectives.
The key advantages of MBO include improved clarity and focus, heightened employee motivation and commitment, and enhanced alignment between individual efforts and organizational objectives. It fosters a results-oriented culture and offers a framework for effective performance management.
However, successful implementation of MBO requires strong leadership support, effective communication, and a well-designed performance measurement system. In some cases, MBO can lead to overly rigid goal setting or a narrow focus on short-term objectives at the expense of long-term strategic priorities. Hence, MBO should be implemented judiciously, taking into account the unique context and requirements of each organization.