1. Management by Objectives
MBO is one of the rational school of management's successful products

2. Menu What is MBO The Core Concepts of MBO MBO Principles
The Five Step MBO Process

3. What is MBO
MBO is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources.

4. What is MBO
MBO aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization.

5. What is MBO
Employees get strong input in identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

6. The Core Concepts of MBO
According to Drucker managers should “avoid the activity trap”, getting so involved in their day to day activities that they forget their main purpose of objective. Instead of just a few top-managers, all managers should:

7. The Core Concepts of MBO
1. Participate in the strategic planning process, in order to improve the implement ability of the plan, and

8. The Core Concepts of MBO
2. Implement a range of performance systems, designed to help the organization stay on the right track.

9. MBO Principles
Cascading of organizational goals and objectives.

10. MBO Principles
Specific objectives for each member

11. MBO Principles
Participative decision making

12. MBO Principles
Explicit time period

13. MBO Principles
Performance evaluation and feedback

14. The Five Step MBO Process
Set or Review Organizational Objectives
MBO starts with clearly defined strategic organizational objectives. If the organization isn't clear where it's going, no one working there will be either.

15. The Five Step MBO Process
Cascading Objectives Down to Employees
To support the mission, the organization needs to set clear goals and objectives, which then need to cascade down from one organizational level to the next until they reach the everyone.

16. The Five Step MBO Process
Encourage Participation in Goal Setting
Everyone needs to understand how their personal goals fit with the objectives of the organization. This is best done when goals and objectives at each level are shared and discussed, so that everyone understands "why" things are being done, and then sets their own goals to align with these.

17. The Five Step MBO Process
Monitor Progress
Set up a specific plan for monitoring goal performance (once a year, combined with a performance review is not sufficient!) Badly-implemented MBO tends to stress the goal setting without the goal monitoring. Here is where you take control of performance and demand accountability.

18. The Five Step MBO Process
Evaluate and Reward Performance
MBO is designed to improve performance at all levels of the organization. To ensure this happens, you need to put a comprehensive evaluation system in place.