Management By Objective (MBO)#Ph.D. Agriculture Extension #Doctoral Seminar-II#RVSKVV- CoA, Gwalior#2022-23

2. Doctoral Seminar - II
On
Management By Objective (MBO)
Presented to Presented by
Dr. Y.D. Mishra Toran Lal Nishad
Major Advisor Ph.D (Ag.) Ext. Edu.
Extension Education
Department of Agricultural Extension & Communication
College of Agriculture
Rajmata Vijayaraje Scindia Krishi Vishwa Vidyalaya, Gwalior (M.P.)

3. Introduction:
The term “Management By Objective” was first time
introduced by the Peter Druker (1954) in his book “the
practice of management”.
Management By Objective (MBO) is also known Management
By Result (MBR), is process of defining objectives within the
organization so that management and employees agree to the
objectives and understand what they need to do in the
organization in order to achieve them.

4. Concept:
The concept of MBO is closely connected with the concept
of planning.
The main concept of management by objective is to make sure
that everybody within the organization has a clear
understanding of the aims or objective, of that organization
as well as awareness of their own rules and responsibilities in
achieving those aims or objectives.
Definition :
“Management by Objective (MBO) is systematic and
organized approach that allows management to focus on the
achievable goals and to attain the best possible result from
the available resource.”

5. Element of MBO
Common
Elements in
MBO
Programme
Goal
Specificity
Participative
Decision
Making
Explicit
Performance
period
Performance
feedback

6. Purpose of MBO:
 Clarify organization’s goals and plans at all levels.
 Gain better motivation and participation from organization’s
members.
 Purpose is to increase individual and organizational
effectiveness by aligning organizational goals and sub-ordinates
objectives.

7. Principles of MBO:
1. Set organizational goals and objectives.
2. Specific objectives for each member.
3. Participative decision making.
4. Explicit time period.
5. Performance evaluation and feedback.

8. Features of MBO:
Peter Drucker also stated that:
For the business to succeed, the managers and
employees must work towards a common goal.
Managers must identify targets for achievement
with subordinates.
Evaluate the objectives over time.
Superior- subordinate participation.
Joint goal setting
Better communication and coordination
Decision making
Support from superior
Set objective at all level

9. How MBO works:
 Jointly identify common goals.
 Define major areas of responsibility in terms of
results expected.
Phases of MBO:
1. Top management team studies system.
2. Team sets up methods of measuring
performance.
3. Goal-setting sessions are held at all levels of
organization.

10. MBO Smart method
SMART goals are a popular way of creating goals that many
organizations use to achieve success.
S - Specific
• Provide a
clear
description
of what
needs to be
achieved.
M- Measurable
• Include a
metric with
a target
that
indicates
success
A- Achievable
• Set a
challenging
target, but
keep it
realistic.
R- Relevant
• Keep your
goal
consistent
with
higher-
level goals.
T- Time bound
• Set a date
for when
your goal
needs to be
achieved.

11. Mission
Management
By Objective
Single – Use
Plans
Standing Plan
Operational
plans
Tactical Plans
First- Level
Managers
Middle
Managers
Top
Managers

12. • developed to achieve objectives that are not likely to be
repeated in the future. Single-use plans include both
programs and projects.
Single use plan
• used to provide guidance for tasks performed
repeatedly within the organization. The primary
standing plans are organizational policies, rules, and
procedures.
Standing plan
• provides a clear picture of how a team, section or
department will contribute to the achievement of the
organization's goals.
Operational plan

13. Defining
Organizational
Goals
Determining
Employees or
Subordinates
Objectives
Continuous
monitoring of
Performance
and Progress
Performance
Evaluation/
Review
Providing
Feedback
Performance
Appraisals

14. Jointly plan
•Setting
objectives
• Choosing
actions
Individually act
•Performing
tasks
(subordinate)
•Providing
support
(supervisor)
Jointly control
•Reviewing
results
• Discussing
implications
•Renewing
MBO cycle
Supervisor
Subordinate
and

15. Appraise
Performance
• Departmental goals
• Individual goals
STEP 1: SET
GOALS
STEP 4: APPRAISE
OVERALL PERFORMANCE
Action Plans
Review Progress
&
Take CorrectiveAction
STEP 2: DEVELOP
PLANS
STEP 3: REVIEW PROGESS

16. 1. Set Goals
• What are we trying to accomplish?
2. Develop Action Plans
• “What do we need to do to get there?
3. Review Progress
• “How are we doing?
• Does plan need to be tweaked?
4. Appraise Performance
• Rewards?

17.  Managers should be trained in MBO philosophy and procedures
before installing the system.
Effective Feedback.
Encouraging employee participation.
Top management support.
Formulating clear objectives.

18. S
• Promotes alignment and focus in the oranization on mission-critical topics.
• Fits into a dynamic and complex environment.
• Reduces the bias problems.
W
• Elaborates process with a “ strict” framework.
• Creative free spirits can feel over- regulated.
• Improvements are not immediately visible.
O
• Faster adaptability of the organization up to the change of strategy during the year.
• Intensive communication promotes purpose (why do we do this)
• Instrinsic motivation can be increased by bottom –up culture.
T
• Without a commitment of top management that has been pre-empted with persuasion.
• A motivating implementation strategy, alot of accompanying communication, a high level of
perserverance and implementation discipline.

19.  Better management and development of the organization.
 Clarified organizational rules and plans.
 Motivates the employee toward achieve the goal.
 Improves communication in the organisation.
 Improves overall performance of employee.
 Helps in utilization of available resource.
.
 Effective control: Measuring of results, taking actions for
achieving the goal.

20.  May be de-motivate staff if targets are too high and unrealistic,
also if imposed rather than agreed.
 Difficulty of setting goals and objectives.
 Costly and time consuming process.
 Lack of support from the top management.
 Resentful attitude of subordinates.
 Lack of adequate skills and training.
 Setting targets for certain specialised employees may be difficult.