Management By Objective

Management by Objective (MBO) which is also known as Management by Results is a results-driven management process that aims to define objectives within an organization. So that the behaviours can be aligned with the objectives.

This is a collaborative approach as both managers and employees are given objectives through collective discussion, and both have their behaviour and actions judged against the set objectives. Meeting objectives is often incentivised, often through incentive pay or indirect compensation.

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. According to the theory, having a say in goal setting and action plans encourages participation and commitment among employees, as well as aligning objectives across the organization. (Peter Drucker,1954, cited in HAYES, 2019) 

However, for the success of this Management approach, it is required to identify the objectives clearly. A misdirection would definitely drive the company towards danger. 

“Business performance requires that each job be directed toward the objective of the whole business” (Drucker, 1954)

It’s also important that the managers understand the business goals. If the managers are misdirected the efforts are wasted.

“The hierarchical structure of management aggravates the danger. What the ‘boss’ does and says, his most casual remarks, his habits, even his mannerisms, tend to appear to his subordinates as calculated, planned and meaningful ”  (Drucker, 1954)

And also the success of the application of this management approach depends on various factors. The knowledge level of the workers, the nature of the job. For most of the IT companies, this approach has been quite successful. The IT companies, especially the software companies have flexible work environments with flexible work hours. They do not consider attendance or any other factor as productivity. What they do is they monitor the tasks which are assigned to its employees whether the task is completed within the deadline. But when it comes to government institutes, organizations or boards what they require is the presence. Therefore this kind of organizational backgrounds does not deserve this management approach.

References

Drucker, P. F., 1954. The Practice of Management. s.l.:s.n.

HAYES, A., 2019. investopedia. [Online]
Available at: https://www.investopedia.com/terms/m/management-by-objectives.asp
[Accessed 27 05 2019].