Sep 2, 2011

Essential Characteristics of Management By Objectives and its Limitations

Characteristics or Features of MBO.
  • Management by objectives is a philosophy or a system, not just technology.
  • It emphasized the participatory agreement on objectives.
  • It clearly defines the responsibilities of each in terms of results.
  • If focuses attention on what needs to be done (goals0 be rather than how it should be done.
  • It converts the objective needs as personal objectives at all levels within the organization.
  • It sets norms or standards (goals) and directs the operation as a basis for performance evaluation.
  • This system is intentionally directed to achieve effective and efficient organizational and personal goals.
  •  MBO process (or cycle management by objective and key elements of management by objectives, or the minimum of management by objectives.
There are four important and necessary steps or elements in the process of management by objectives as follows:
Set goals.
Objective or goal setting is a multistage process. It begins with the investigating judge of STAT3 current affairs, efficiency, the threats and opportunities. Then the key will be identified by areas such as commodity markets, better service, lower costs, simplify the work, employee motivation, innovation, efficiency and social responsibility. The performance of these sectors is essential for the organization in the sense that errors in these areas can lead to failure of the organization. And that is why they are known as the "key" outcome area. Peter said that the targets are in all areas where performance and results directly important to the survival and prosperity of the economy.

Subsequently, the setting of targets or joint interaction. Subordinates are actively involved in the formulation of objectives at each level in the organization of such goals in relation to the overall objectives of the organization done. He is careful to goals that are measurable and contribute to the element. These goals can be long rang, rang, medium or short range. In addition, the availability of resources is also an important aspect to always put in some goals. It is always necessary to decide about priorities between the different objectives without compromising the environment in which business operates, as well as possible further changes.

Development of action plans.
Define the objectives to be translated into action plans. It requires the allocation of specific responsibilities for various departments, offices and individuals. It also requires the allocation of resources to fulfill the assigned tasks. The dimensions of time are also determined so that the objectives be achieved without unnecessary delay.

Regular review and monitoring of progress.
Set your goals and action plans, it is necessary to establish an appropriate monitoring system to keep the activities regularly. This progress is not the path followed to date, the ultimate goal. It ensures that finding the differences, if any, are to be taken studied in depth and immediate remedial action to bring them in order on the court. Such regular monitoring and periodic review not only provide feedback that is completed in time. But also motivates managers responsible for performance. Regular review and monitoring are done at the departmental level, usually.

The performance evaluation.
This is the final phase of the MBO, which evaluates the annual performance. The annual review or evaluation is complete and occurs at the level of the organization. The actual results are measured against annual targets. Such an assessment is also used to determine the objectives for the next year to take for the modification of standards (goals0 if necessary, and appropriate measures to avoid gaps goals prescribed form.

Limitations /Weakness /Disadvantages of MBO

Unfavorable attitude of the manager.
Some managers have an attitude that takes them by the steady loss of MBO system that relies heavily on his busy schedule and is not consistent with their duties.

Problems about Goal Setting.
MBO requires the issuance of a warrant, detailed guidelines for goal setters, the following difficulties in setting goals:
  •  The active and positive participation of his subordinates is not easy to leave.
  • Truly verifiable targets offered simply to formalize
  • Emphasis will be placed in short-term goals, while long-term goals are to be avoided, drive long-term goals of crucial importance for growth and development of the organization
  • The objectives are inflexible and rigid. For example, the changes are desirable annual budget adopted not only in the middle of the year.
  • Over-use of quantitative targets at risk, the qualitative aspect, which can be more important than the quantification, in some cases.
  • Orecedebce or more goals take precedence over those who can use them. Each action is unacceptable in this series to achieve the Gilas, without regard to their impact on humans. So come all these difficulties in the way of management by objectives in the operation of an organization. It also includes the management of more of the target.
  • Time the nature of management by objectives. Management by objectives takes time, especially in the early stages of its introduction, if employees are not with the process.

Management by Objectives (MBO ) and Benefits of MBO

Management by Objectives (MBO) has become a popular slogan. There is a mentality that takes the basic high-performance manager, the task of corporate governance. The concept of management by objectives was coined by Peter Drucker in 1954. He expressed the concept of management by objectives, and then emphasized it is developed as a management philosophy. Some authors have used the term interchangeably with a results-oriented management by objectives management.

Management by objectives is a comprehensive management philosophy that focuses on the goals and the final results. Management by objectives based on the assumption that the people better if they know what is expected of them and can put their personal goals with organizational goals refer to. It also assumes that making people better if they expect what they know and can put their personal goals with organizational goals. It also assumes that people are interested in the objective settlement process and evaluate their performance against the target.
Some important definitions of MBO can be specified as follows:

George S. Odiorne.
The system of management by objectives can be used as process through which managers and subordinates to define the organization to share their common goals each area a great responsibility in relation to the expected results are described by him, and with these measures as guidelines for the operation to evaluate the device and the contribution of each member.

Peter Drucker.
He says that management by objectives and self-control is a management philosophy. Based on a concept of human action. Human behavior and motivation. MBO is for any manager at all levels and for all companies, whether large or small. He says that management by objectives, performance guarantees by transforming the objective needs as personal objectives.

Heinz Weihrich and Harold Knoontz.
MBO is a complete management system that a number of key management activities in a systematic way, which is directed deliberately at the effective and efficient organizational and individual objectives integrated.

Stress balance on the objectives. MBO forces managers with the goals of load balancing set of key areas. Terms of crises will be avoided to take place in the organization.


Better management. MBO forces managers to plan for the results and think not only for planning activities or work. Managers are required to ensure that objectives are realistic and necessary resources are made available to subordinates to achieve goals. Clearly, setting goals for his subordinates to serve as standards for evaluation, and the reasons for them. Sun MBO to improved administration.

Better organized. Positions in the company can be built around the key result areas. Managers are required to clarify roles and organizational structures. Therefore, to better organize.

Increase employee involvement and commitment. When the MBO program is installed in an organization, people will not only work, following the instructions and wait for the leadership and shape the decisions and things are not dictated by their superiors. They are now people with clearly defined objectives that were identified by their own participation in the formal process.


Orderly growth of the organization. MOB provides for the maintenance and the orderly growth of the organization defined set of goals for everyone involved. It also provides the measure of what is actually achieved. Progress and even the office of management by objectives, emphasizes the ability, competence and success of managers, rather than their personality. The orderly growth and development of the organization is assured.

Development of effective controls. MBO not only sharpens the planning, but also the development of effective controls. It is stated explicitly checked regularly and annual performance appraisals, as the necessary feedback for streamlining goals or objectives. It allows a manager's own performance, deg4ree high self-control that is a strong motivation to manage.

Creating an ideal atmosphere. Doughlas McGregor says, motivation, who are the potential for capacity development of responsibility, the will to direct behavior toward organizational goals present in all people. Management did not, there is. The essential task of management is to organize the conditions of organization and working methods.

Objective assessment.Management by objectives provides a basis for evaluating the performance of a subordinate, because the goals (standards) are set jointly with the supervisor and subordinates.

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