Management by objectives (MBO) – Define:
Management by objectives is a process through which specific goals are set collaboratively for the organisation as a whole and all units and individuals within it.
The goals are then used as a basis for planning, managing organisation activities, evaluation of performance and reward.
An effective approach to enhancing organisation effectiveness? Agree?
First of all let’s take a look at strengths of MBO.
• MBO provides an environment where employees can voice on how their jobs are designed and what their performance targets should be.
• Aid in planning by making managers establishes goals.
• Improved communication between both management and employees, because both can express their views on what objectives they can and cannot accomplish.
• Everybody in the organisation becomes more aware of the organisation’s goals.
• The evaluation process becomes fairer because people are measured on specified targets and their performance in achieving goals of the organisation.
• With specific objectives laid out, suggestions from all levels of management can be obtained.
• Managers will have clearer idea of the vital areas of their responsibility and the standards that are required. Hence, allowing them to focus and utilize their resources.
• MBO creates a participatory work environment to help employees become more involved. In this way, every subordinate in the organisation is more motivated.
It has been said that management by objectives has been a failure more often than a success, here are some problem areas.
• MBO process requires too much time, effort and paperwork in setting goals, objectives and energy to implement the whole system effectively.
• Some managers would rather see employees fail just to prove their own superiority.
• Some managers set unrealistic objectives, placing pressure for performance at the expense of employees.
• Generally the main barrier to effective MBO is lack of support from top-management, and it is easily stalled by authoritarian managers.
• Before MBO can be implemented, many changes have to be done in the organisation, including the control procedures and the general style of the management.
• There may appear problems with goal acceptance and shortages of management and workers skills. Training in counseling and interviewing is needed.
• The support needed to achieve goal achievement is too often not enough for some managers.
• When conditions of the organisation changes, objectives must be reviewed and revised.
• Organisation will lose opportunities if MBO puts on a strict emphasis on creativity or individual innovation in managers and their staffs.