MBO Meaning, history and Objectives of MBO

 The term “management by objectives

(MBO)”was first used by P eter F. Drucker in his 1954 book titled The Practice of Management.

Management by objectives (also known as management by planning) is the establishment of a management information system (MIS) to compare actual performance and achievements withthe defined objectives.

MBO is popularised in the USA by George Odiorne.

DEFINITION OF MBO

“MBO is a system wherein the superior and the sub-ordinate managers of an organisation jointly identify its common goals, define each individual’s major area of responsibility int terms of the result expected of him and use these measures guides for operating the unit and assessing the contribution of each of its members”. - -                     George Odiorne

OBJECTIVES OF MBO

i. To measure and judge performance

ii. To relate individual performance to organisational goals

iii. To clarify both the job to be done and the expectations of

accomplishment

iv. To foster the increasing competence and growth of the subordinates

v. To enhance communications between superiors and subordinates

vi. To serve as a basis for judgements about salary and promotion

vii. To stimulate the subordinates’ motivation

viii. To serve as a device for organisational control and integration