Question 2 (a)

Management by objectives: meaning, features and steps

9 marks

Time to write
About 18 minutes
Topic
Objectives and management by objectives
Notes
Crux notes

Question

Question 2 (a) · 9 marks

What is Management By Objectives? What features does it have? What steps does an MBO programme involve?

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

18 minfor 9 marks

Read from the question

  • What…?3 questions in all: answer every one.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Meaning of MBO 1½ marks 1 min
  3. 2 Features of MBO 3 marks 6 min
  4. 3 Steps in an MBO programme 4 marks 8 min
  5. 4 Conclusion ½ mark 1 min
  6. Check: every ask answered, key terms underlined 1 min

Easy marks

  • Meaning of MBO (step 1, 1½ marks): a clear definition and a line on what it covers. It opens the answer, so it takes a minute or two.

Short on time? Keep step 1 short. Trim steps 2 and 3 evenly rather than skip one: each is capped at its own marks. End with step 4 in a line or two.

Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Meaning of management by objectives

Management by objectives (MBO) is a system of management in which superiors and subordinates jointly set clear, measurable objectives for each individual and unit, in line with the organisation's overall goals, and then use these objectives to guide work and to evaluate performance. Objectives are the ends the organisation seeks through its operations. MBO turns objectives from statements at the top into specific commitments at every level and makes results, rather than activity, the basis of management.

Picture itManagement by objectives: meaning, features and steps

1Manager and assistant sit across the calendar and set the quarter's targets together.

Participation of subordinatesParticipation of subordinates in setting their objectives.

2Mid-term, the two of them stand at the chart: where are we against the plan?

Periodic reviewPeriodic review and feedback on progress.

3Results in, the trophy and the increment letter change hands before the whole office.

Appraisal and rewardsAppraisal and rewards based on results.

Features of MBO

  1. Joint goal setting. Objectives are agreed between superior and subordinate, not simply imposed.
  2. Hierarchy of objectives. Individual and departmental objectives are derived from, and support, the organisation's goals.
  3. Specific and measurable objectives. Objectives are stated in clear, verifiable terms with time limits: for example, reduce customer complaints by 20 per cent in six months.
  4. Participation and commitment. Because people help set their objectives, they are more committed to them.
  5. Self-direction and self-control. People are given freedom to decide how to reach their objectives.
  6. Periodic review and feedback. Progress is reviewed regularly so that problems are corrected in time.
  7. Results-based appraisal. Performance is judged by objectives achieved, and rewards are linked to results.
  8. A comprehensive system. MBO links planning, organising, motivation, appraisal and control.

Steps involved in an MBO programme

  1. Setting organisational goals. Top management sets the overall objectives and the priorities for the period, in line with the mission and strategy.
  2. Clarifying organisational roles. Responsibilities are defined so that each objective has an owner and overlaps are removed.
  3. Setting subordinates' objectives. Each subordinate proposes objectives for his or her area; superior and subordinate discuss them and agree on targets that are challenging but achievable, with measures and deadlines.
  4. Matching resources and authority. The superior ensures that the subordinate has the resources, information and authority needed.
  5. Action planning and implementation. The subordinate plans how to achieve the objectives and works with freedom.
  6. Periodic progress reviews. Superior and subordinate meet to check progress, solve problems and, if conditions have changed, revise objectives.
  7. Final appraisal. At the end of the period, performance is measured against objectives, and the subordinate reviews his or her own results.
  8. Recognition and recycling. Achievement is rewarded, and the lessons learnt feed into objectives for the next cycle.

Example. A sales director agrees with each regional manager on a sales target, a target for new dealers and a limit on bad debts for the year; they review progress every quarter, and bonuses depend on the results achieved.

Conclusion

MBO focuses everyone on results, improves commitment through participation and gives an objective basis for appraisal. It succeeds only with top-management support, genuine participation and objectives that are measurable without neglecting quality.

Where the 9 marks sit

#ComponentMarks
1Meaning of MBO1.5
2Features of MBO3
3Steps in an MBO programme4
4Conclusion0.5
Total9
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