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Concept
Management by objectives
Summary
Management by objectives (MBO), also known as management by planning (MBP), was first popularized by Peter Drucker in his 1954 book The Practice of Management. Management by objectives is the process of defining specific objectives within an organization that management can convey to organization members, then deciding how to achieve each objective in sequence. This process allows managers to take work that needs to be done one step at a time to allow for a calm, yet productive work environment. In this system of management, individual goals are synchronized with the goals of the organization.
An important part of MBO is the measurement and comparison of an employee's actual performance with the standards set. Ideally, when employees themselves have been involved with the goal-setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.
According to George S. Odiorne, the system of management by objectives can be described as a process whereby the superior and subordinate jointly identify common goals, define each individual's major areas of responsibility in terms of the results expected of him or her, and use these measures as guides for operating the unit and assessing the contribution of each of its members. MBO refers to the process of setting goals for the employees so that they know what they are supposed to do at the workplace. Management by Objectives defines roles and responsibilities for the employees and help them chalk out their future course of action in the organization.
Peter Drucker first used the term "management by objectives" in his 1954 book The Practice of Management. While the basic ideas of MBO were not original to Drucker, they pulled from other management practices to create a complete 'system'. The idea draws on the many ideas presented in Mary Parker Follett's 1926 essay, The Giving of Orders.
After the term and idea were brought up, Drucker's student, George Odiorne, continued to develop the idea in his book Management Decisions by Objectives, published in the mid-1960s.
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Related concepts (3)
Goal
A goal or objective is an idea of the future or desired result that a person or a group of people envision, plan and commit to achieve. People endeavour to reach goals within a finite time by setting deadlines. A goal is roughly similar to a purpose or aim, the anticipated result which guides reaction, or an end, which is an object, either a physical object or an abstract object, that has intrinsic value. Goal setting Goal-setting theory was formulated based on empirical research and has been called one of the most important theories in organizational psychology.
Management by objectives
Management by objectives (MBO), also known as management by planning (MBP), was first popularized by Peter Drucker in his 1954 book The Practice of Management. Management by objectives is the process of defining specific objectives within an organization that management can convey to organization members, then deciding how to achieve each objective in sequence. This process allows managers to take work that needs to be done one step at a time to allow for a calm, yet productive work environment.
Management
Management (or managing) is the administration of organizations, whether they are a business, a nonprofit organization, or a government body through business administration, nonprofit management, or the political science sub-field of public administration respectively. It is the science of managing the resources of businesses, governments, and other organizations.
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