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Seminar
On
Management by
Objectives
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Table Contents
Definition
Introduction
Management by Objectives (MBO) in 5 Steps
Advantages of Management by Objectives
Disadvantages of Management by Objectives
Conclusion
2
Definition
Management by objectives (MBO) is a
strategic management model that aims to
improve the performance of an organization
by clearly defining objectives that are agreed
to by both management and employees.
3
Introduction
• Management by objectives (MBO) is a process
in which a manager and an employee agree
on specific performance goals and then
develop a plan to reach them.
• It is designed to align objectives throughout
an organization and boost employee
participation and commitment.
4
5
Management by Objectives
(MBO) in 5 Steps
• Either determine or revise organizational
objectives for the entire company. This broad
overview should be derived from the firm’s
mission and vision.
●●●
6
Management by Objectives
(MBO) in 5 Steps
• Translate the organizational objectives to
employees. In 1981, George T. Doran used
the acronym SMART (specific, measurable,
acceptable, realistic, time-bound) to express
the concept.
●●●
7
Management by Objectives
(MBO) in 5 Steps
• Stimulate the participation of employees in
setting individual objectives. After the
organization’s objectives are shared with
employees from the top to the bottom,
employees should be encouraged to help set
their own objectives to achieve these larger
organizational objectives. This gives
employees greater motivation since they
have greater empowerment.
●●●
8
Management by Objectives
(MBO) in 5 Steps
• Monitor the progress of employees. In step
two, a key component of the objectives was
that they are measurable for employees and
managers to determine how well they are
met.
●●●
9
Management by Objectives
(MBO) in 5 Steps
• Evaluate and reward employee progress. This
step includes honest feedback on what was
achieved and not achieved for each
employee.
10
Advantages of Management by
Objectives (MBO)
• Employees take pride in their work and
are assigned goals they know they can
achieve that match their strengths, skills,
and educational experiences.
• Management can create goals that lead to
the success of the company.
●●●
11
Advantages of Management by
Objectives (MBO)
• Assigning tailored goals brings a sense of
importance to employees, boosting their
output and loyalty to the company.
• Communication between management
and employees is increased.
12
Disadvantages of Management
by Objectives (MBO)
• As MBO is focused on goals and targets, it
often ignores other parts of a company,
such as the culture of conduct, a healthy
work ethos, and areas for involvement and
contribution.
• Strain is increased on employees to meet
the goals in a specified time frame.
●●●
13
Disadvantages of Management
by Objectives (MBO)
• Employees are encouraged to meet
targets by any means necessary, meaning
that shortcuts could be taken and the
quality of work compromised.
• If management solely relies on MBO for all
management responsibilities, it can be
problematic for areas that don’t fit under
MBO.
14
Conclusion
As a theory, MBO makes a lot of sense: Help
employees to get involved in setting company
goals and they are more likely to share
management’s objectives, work harder, and
deliver.
However, there’s also a good reason why MBO is
widely criticized. Like most things that look good
on paper, it doesn’t always work in practice.
15
References
• Wikipedia.org
• Google.com
• Seminarppt.com
• Studymafia.org
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