Management by objectives (MBO)
Management by objective is a process whereby superior and subordinates jointly identify the
law of objectives, set the results that should be achieved by the subordinates, assess the
contribution of each individual, and integrate individuals with the organization so as to make
best use of organizational resources.
It is a way of managing which involves:
(a) Identification of organizational, divisional, departmental, group and individual objectives.
(b) Formulations of effective managerial strategies, policies and procedures.
(c) Measurement of performance in terms of objectives.
Definition of management by objectives
“MBO is a comprehensive managerial system that integrates many key managerial activities in
a systematic manner, consciously directed towards the effective and efficient achievement of
organizational objectives.”
Koontz and O’ Donnell
“Management by objectives is regarded as a system for improving performance, both the
individual managers and the enterprise as a whole by setting of objectives at the corporate
departmental and individual managerial level.”
Peter Druker
Characteristics of MBO
1. A Philosophy of management
2. Goal oriented approach
3. Common objectives and individuals goal
4. Participation and involvement
5. An interactive approach
6. A comprehensive approach
7. A system approach
8. Aims of optimum results
9. Universal approach
10. Increasing competence
Management by objective is a process whereby superior and subordinates jointly identify the
law of objectives, set the results that should be achieved by the subordinates, assess the
contribution of each individual, and integrate individuals with the organization so as to make
best use of organizational resources.
It is a way of managing which involves:
(a) Identification of organizational, divisional, departmental, group and individual objectives.
(b) Formulations of effective managerial strategies, policies and procedures.
(c) Measurement of performance in terms of objectives.
Definition of management by objectives
“MBO is a comprehensive managerial system that integrates many key managerial activities in
a systematic manner, consciously directed towards the effective and efficient achievement of
organizational objectives.”
Koontz and O’ Donnell
“Management by objectives is regarded as a system for improving performance, both the
individual managers and the enterprise as a whole by setting of objectives at the corporate
departmental and individual managerial level.”
Peter Druker
Characteristics of MBO
1. A Philosophy of management
2. Goal oriented approach
3. Common objectives and individuals goal
4. Participation and involvement
5. An interactive approach
6. A comprehensive approach
7. A system approach
8. Aims of optimum results
9. Universal approach
10. Increasing competence
