management by objectives
DESCRIPTION
Management by Objectives -Introduction -Brief Explanation -Implementation ExamplesTRANSCRIPT
MANAGEMENT BY OBJECTIVES
PRESENTED BY:
Javeria11-arid-3303
MIT-4University Institute of Information Technology,
Rawalpindi (UIIT, UAAR)Pakistan
INTRODUCTION
Management by objectives (MBO), also known as management by results (MBR), is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them.
MANAGEMENT BY OBJECTIVES
Main ConceptThe core aim of management by objectives is the alignment of company goals and subordinate objectives properly, so everyone in the organization works towards achieving the same organizational goal.
MBO reflects a proactive way of managing that is: result oriented emphasize accomplishments rather than inputs encourages participation at all levels of an organization
Essence of MBO:
Participative goal setting choosing course of actions decision making
An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set.
MBO IN ACTION
EXPLANATION
Routine objectives Innovation objectives Improvement objectives
The objectives must be focused on result, not on activity.
Types Of Objectives:
Smart Objectives Every objective must meet these criteria:
Domains and levels
Objectives can be set in all domains of activities
production services sales R&D
HR finance information
systems
Some objectives are collective, for a whole department or the whole company, others can be individualized
ADVANTAGES OF MBO
Motivation – Involving employees in the whole process of
goal setting increases employee empowerment, job
satisfaction and commitment.
The employees are clear as to what is expected from them. Better communication and Coordination – Frequent
reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solves many problems.
The MBO Process sets a benchmark for every employee.
DISADVANTAGES OF MBO It over-emphasizes the outcomes over the procedure.
It sometimes ignores the prevailing culture and
working conditions of the organization. It is difficult to appraise and identify potential. MBO
only deals with performance on the present job.
MBO is a time consuming process.
IMPLEMENTATION
Where to Use MBO
The MBO process is appropriate for knowledge-based enterprises when your staff is competent.
It is appropriate in situations where you wish to build employees' management and self-leadership skills and tap their creativity and initiative.
Management by Objectives (MBO) is also used by chief executives of multinational corporations (MNCs) for their country managers abroad.
MBO at Hewlett-Packard
MBO received a boost when it was declared an integral
part of “The HP Way”, the widely acclaimed management
style of Hewlett-Packard, a computer company.
At every level within Hewlett-Packard, managers had to
develop objectives and integrate them with those of other
managers and of the company as a whole.
Written plans were produced that showed what people
needed to achieve if they were to reach those objectives.
The plans were then shared with others in the corporation
and coordinated.
MBO urged that the planning process, traditionally
done by high-level managers, should be delegated to
all members of the organization.
The plan, when it finally emerged, would then have the
commitment of all of them.
As the plan is implemented, MBO demands that the
organization monitor a range of performance
measures, designed to help it stay on the right path
towards its objectives.
The plan must be modified when this monitoring
suggest that it’s no longer leading to desired objective.
MBO at Hewlett-Packard
MBO at Hewlett-Packard
Bill Packard, one of the two founders of Hewlett-Packard, said of MBO:
“No operating policy has contributed more to Hewlett-Packard's success…
…Management by objectives refers to a system in which overall objectives are clearly stated and agreed upon, and which gives people the flexibility to work toward those goals in ways they determine best for their own areas of responsibility.”
Some Other Organizations Practicing MBO