MBO – Management by Objectives

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?
Strengths
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.

Weaknesses
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.