Meaning Of MBO “ Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organisational and individual objectives”

Characteristics: Measurable & time bound objectives for each managerial position Objectives for each position are established by job-holders & the boss together These objectives form basis for performance evaluation Sharp definition of responsibilities & authorities for positions, provides clarity in the organisation

Features of MBO : MBO is not merely a technique but a philosophy to management Objectives of organisation & of individuals are collectively decided by superiors and subordinates The Corporate , Departmental and Individual objectives are used as a yardstick to measure performance

MBO provides for a regular review of performance MBO provides for a regular review of performance. The review is future oriented & provides a basis for planning & corrective actions The objectives in MBO provide guidelines for appropriate system & procedures. These objectives also become a basis of reward & punishment in the organisation

Objectives: Measuring performance Increasing Growth of Subordinates Encouraging Efficiency Relating Individual Performance to Organisational Goals Basis For Deciding Salary and Promotion Improving Communication among Superiors and Subordinates Device of Organisational Control

Process of MBO Setting objectives at the Top Clarifying Organisational Roles Setting Subordinates Objectives Recycling Objectives

Benefits of MBO Better Managing Clarifying Organisation Encouraging Personal Commitment Developing Controls

Weakness of MBO Failure to Teach MBO Philosophy Failure to give guidelines to goal setters Difficulty in setting goals Emphasis on short term objectives Danger of inflexibility

Pre-requisites for installing MBO Programme Defining purpose Support from top management Training for MBO Programme Participation Feedback

Management by Exception It means that management should not concentrate on things of minor nature rather it should involve where there are exceptions .

Difference Between Management by Objectives & Management by Exception

MBO MBE BASIS Philosophy of decentralisation Wider Nature: Concept Functions: Time Required: MBO Philosophy of decentralisation Wider Helps in setting their goals Needs more time MBE Control technique Narrow Report exceptions to the top executives Comparatively less time is required

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