Objectives may be defined as the expectation of the end-result for an organization Management by Objectives meanwhile refers to establishment of effective standards for managerial positions and the periodic conversion of those into measurable and time bound objectives. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc

1. Welingkar’s Distance Learning Division
CHAPTER-05
OBJECTIVES AND MBO
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2. Welingkar’s Distance Learning Division
Introduction
 Every institution or organization is established
for the purpose of achieving some objectives.
It may differ from organization to
organization.
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3. Welingkar’s Distance Learning Division
Belief can change our fate.
Belief is miraculous.
Belief can achieve the impossible.
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4. Welingkar’s Distance Learning Division
Definition
 Objectives may be defined as the expectation
of end result for which an organization is
established and which it tries to achieve.
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5. Welingkar’s Distance Learning Division
Features of Objectives
 Each individual objective is collected by the group to
achieve the group objectives.
 The objectives may be short term or long term and
broad objectives or specific objectives.
 The objectives should be clearly defined.
 At top level, the organization has broad objectives.
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6. Welingkar’s Distance Learning Division
Features of Objectives
 The objectives of the organization must conform to the
general needs of the public.
 All organization has several objectives at a time.
 The objectives of the organization may be changed in
due course.
 The objectives are expressed in numerical terms.
 The framed objectives should be achievable.
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7. Welingkar’s Distance Learning Division
Advantages of Objectives
 Unified planning
 Individual motivation
 Coordination
 Control
 Basis for decentralization
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8. Welingkar’s Distance Learning Division
Management by Objectives
 MBO means the establishment of
effective standards for managerial
positions and the periodic conversion of
those into measurable time bound
objectives linked vertically and
horizontally and with future planning
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9. Welingkar’s Distance Learning Division
Features of MBO
 An attempt is made to integrate the goals of organization and
individuals that leads to effective management.
 It tries to combine long range goals with short range goals.
 Management relates the organization goals with society goals.
 MBO’s emphasis is not only on goals but also on effective
performance.
 Encourages a climate of trust, goodwill and will to perform.
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10. Welingkar’s Distance Learning Division
Features of MBO
 It pays constant attention to refining, modifying and improving
the goals.
 It increases the organizational capability of achieving goals at
all levels.
 High degree of motivation and satisfaction is available.
 Recognizes the participation of employees in goal setting
process.
 Aims at replacing the exercise of authority with consultations.
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11. Welingkar’s Distance Learning Division
Process of MBO
Define organizational Goals of each Fixing key
objectives section Rresult areas
Reappraisal Setting
Of subordinate
objectives objectives or
targets
Appraisal of Periodicals review Matching
activities meetings resources with
objectives
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12. Welingkar’s Distance Learning Division
Benefit of MBO
 Managers are involved in objectives setting at
various levels management under MBO and this
commitment ensures hard work to achieve them.
 MBO process helps the managers to understand
their role in the total organization.
 Manager recognizes the need for planning and
appreciates the planning..
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13. Welingkar’s Distance Learning Division
Benefits of MBO
 It provides a foundation for participative
management as every one is involved in goal setting.
 Each department objectives are consistent with the
objectives of the whole organization.
 Systematic evaluation of performance is made with
the help of MBO.
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14. Welingkar’s Distance Learning Division
Benefit of MBO
 It helps to take corrective action.
 Delegation of authority is easily done.
 It helps the manager attend to job
enrichment.
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15. Welingkar’s Distance Learning Division
Benefit of MBO
 It makes the job meaningful.
 The responsibility of a worker is fixed.
 Decision is taken by the management very
quickly.
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16. Welingkar’s Distance Learning Division
Problems and Limitation of MBO
 MBO fails to explain the philosophy; most of the
executives do not know how MBO works, what is
MBO and why is MBO necessary and how
participants can benefit by MBO.
 It is time consuming process and leads to heavy
expenditure and requires heavy paper work.
 MBO emphasis only on short term objectives and
does not consider the long term objectives.
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17. Welingkar’s Distance Learning Division
Problems and Limitation of MBO
 The status of subordinates is necessary for proper
objectives setting which is not possible in the
process of MBO.
 MBO is rigid one. Objectives should be changed
according to the circumstances. If not done, planned
results can not be obtained.
 Objectives are set without considering the available
resources.
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18. Welingkar’s Distance Learning Division
Guidelines for setting Effective Objectives
 Objectives are framed only by the participants
who are responsible for implementing them.
 All the objectives should support the overall
objectives of the organization.
 Objectives should be attainable ones.
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19. Welingkar’s Distance Learning Division
Guidelines for setting Effective Objectives
 It should result in the motivation of workers.
 A periodical review of objective sis necessary for
proper implementation.
 Objectives should have the characteristics of
innovation.
 The number of objectives for each management
member should be a reasonable one. (4 or 5)
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20. Welingkar’s Distance Learning Division
Guidelines for setting Effective Objectives
 It should be ranked on the basis of their
importance.
 It should be in balance withi9n a given
organization.
 It should be simple and clearly defined.
 It should be specific and time bound.
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