Sunday 30 December 2018

Management by objectives (MBO)

Management by Objectives or often abbreviated with the MBO approach is systematic and organize that highlight the achievement of the goals of the organization. In the long term, the application of MBO allows the management to change the mindset of the Organization to become more results-orient.

The concept of Management by Objective (MBO) is called the "management base on objective" was first put forth by Peter Drucker in his book entitle"The Practice of Management". In the objectives of the Organization are set to go through the approval process between management and employees, not impose from the top.

This way will be more effective at delegating authority on a large organization. So that all employees understand and demonstrate its commitment to the achievement of the goals of the organization. Goals of an organization create by the target Organizations ranging from terrace overall, target Division, departmental goals. To individual employees itself.


Please note that the MBO is a Management approach focus on results, not on process activities or its implementation. Tasks that have been delegate have no Road map or "how to" that remain in implementation. Their implementation is carry out base on the development of the situation and is dynamic.

To identify and set the goal of his organization, the Organization's Top Management usually use goal setting/Target as method of SMART (Specific, Measurable, Achievable, Relevant and Time-Specific) or GQM (Goal, Question and Metrics).

MBO can be apply in various fields of endeavor, such as production, Marketing, Services, research and development, health care, information systems and Financial business fields.

Advantages of The Application of MBO

The main principle of MBO is clarity of responsibility and the role of employees in the Organization. So that they clearly understand which activities should be doing to achieve the objectives of the organization. Some of the advantages gain from the application of MBO is as follows:

  1. Increase Work Motivation, involving employees in decision-making about the objectives of the Organization will increase. Its commitment and job satisfaction for the employee in question.

  2. The existence of a coordination and better communication, interaction in determining. The objectives of the organization can maintain good relations and harmony between management and employees.

  3. The Clarity of the Objectives of the Organization.

  4. Employees or subordinates have a high commitment against targets they set themselves. The target/destination rather than impose from others.

Step-by-step application of MBO

The following are some important steps that must be perform in applying MBO:

  1. Specify the target and the main purpose of the Organization

  2. Define goals and Objectives for each employee or Department

  3. Monitor the development of the implementation and the performance of the employee

  4. Evaluating Performance

  5. Provide feedback

  6. Giving the prize to the employee or Department to reach the targets set.

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