Management By Objective

Peter Drucker explained the concept of Management by Objective (MBO) to ensure that the individual objectives of the entire management group are in a structure towards a common policy. Moreover, to gain compatibility within the management group, each manager within the organization requires objectives to avoid confusion.

Define Objectives of Management

• Firstly, the objectives should point out the performance that each management group has to achieve.
• After that, the contribution, a manager and his/her unit should help other units to achieve their objectives. And, this would tend to focus on teamwork and achievement of team results, rather than individual performance alone.
• Moreover, to ensure the balancing of the objectives they should be set over both short and long term timescales. In addition, they contain both tangible and intangible elements.

Problem Faced with Objectives by Organization

The objectives approvement is done by top management and falls down vertically in the organization, leading to specific problems such as,

One way communication:

• In traditional Management By Objective planning processes, the communication process is one way, downwards from the manager to the subordinate, with little input from the team.

Management after the fact:

• MBO has a particular focus on results without identification of causes as to why there is a delay in results achievement.

Individual skills:

• There is a particular inclination towards the skills of individual employees with little effort to improve processes.

Failure to eliminate problems:

• Identification of problems at local levels tends to be an effect of problems with processes involving many different departments.

Failure to capture knowledge:

• The performance evaluation within the MBO approach tends to carry out annually, without any knowledge feedback into the organization.

Used as a weapon:

• Moreover, using MBO as a weapon often threaten employees, by measuring individual performance against top-down objectives.

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