Management By Objectives

Essay by PaperNerd ContributorUniversity, Master's September 2001

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INTRODUCTION Management by Objectives (MBO) is a process used to set and monitor - goals, plans, time allowances and resources in an organisation. MBO, increases the involvement and communication between employees, lower and higher level management.

In MBO periodic reviews are conducted to evaluate the outcome of employee progress; this ensures employees are on the right track. Progress reports are used to analyse all aspects relevant and determine whether MBO is suited to the organisation.

The correct and thorough implementation of MBO is very important. The process can fail or be unsuccessful due to poor implementation or lack of top management support. Ways to successfully overcome any barriers need to be included when introducing MBO.

There are potential benefits and problems associated with introducing and maintaining the Management By Objectives process within organisations. These benefits and problems are further discussed to give the reader an insight to this particular management style.

Davidson and Griffin (2000) formally defined MBO as follows: The purpose of MBO is to give employees a voice in the goal-setting and planning processes and to clarify for them exactly what they are expected to accomplish in a given time span. Thus MBO is concerned with goal setting and planning for individual managers and their units or work groups (p. 248).

An example of MBO in the real world: St George Bank has set the goal of introducing 1000 productivity and performance improvements by the end of August 2001. The plan was started in October 1999. Ed O'Neal, chief executive of the bank, set roles for his management team. Nineteen (19) business managers were allocated to work with different business units in the project up until March 2000 (5 months). Employees were asked to suggest any factors of improvement to be included in the Project Redesign that commenced...

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