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Overview - Management by Objectives - Principles of Management
Transcript of Overview - Management by Objectives - Principles of Management
Origin of the MBO Concept
MBO was first outlined by Peter Drucker in 1954 in his book - ' The practice of Management ’
The concept of Self Control.
Managing the Managers.
Evolution till the Information Age.
Core Concept of MBO
Tool for strategic planning ,employee motivation , and performance enhancement.
Improves communication between employees and management.
Increases employee understanding of company goals.
Provide a concrete link between pay and performance.
Emphasis is on the results achieved by employees rather than the activities performed.
Applications of MBO
The MBO concept is appropriate for knowledge –based enterprises where staff is component.
Appropriate in situations where one wishes to build his/her personality.
Self –leadership skills.
Tapping their creativity.
Used by Chief Executive of Multinational Corporation for their country managers abroad - Performance & appraisal.
Process of MBO
Organizational objectives achieved
MBO for the next operating period begins
Employees objectives set
Disadvantages of MBO
Incurs Time and Cost,
Failure to teach MBO Philosophy to employees,
Problems in Objective setting,
Emphasis on short term objectives,
Frustration of employees.
Examples of MBO
Like many organizations, Hyundai Motors applies MBO.
Annual , Quarterly and weekly targets are determined.
Periodic reviews are done.
Hyundai Motors incentives employees’ performance.
Advantages of MBO
Better utilization of resources,
Aid in Planning,
Development of personnel,
Better Team Work,
Concentration on key Result Areas,
Sound Organizational Structure.
Principles of Management
Gaurav Khanna (10248)
MANAGEMENT BY OBJECTIVES
7th November, 2013
Thank you !