Management by objectives (MBO) is now practiced all over the world. Yet, despite its wide applications, it is not always clear what is meant by MBO. Some says that it is an appraisal tool; other sees it is a motivational technique; still others consider MBO a planning and control device. In other words, definitions and applications of MBO differ widely. MBO process consists of setting goals at the highest level of the organization, clarifying the rules of responsible persons for achieving the goals. Some still define MBO in a very narrow, limited way.
Benefits of MBO
There are four benefits of MBO.
1. MBO Improves Management
All the objectives of management by objective can be summarized by saying that it results in greatly improved Management. objective can not be establish without planning. MBO force Managers to think about planning for results. MBO also requires that Managers think about the way from which they will accomplish results. They will think about need of assistance to achieve the objectives.
2. MBO Classify Organization
MBO classify the organizational roles and structure. It force managers to delegate authority according to the results they expect.
3. MBO Encourage Personal Commitments
One of the great advantages of management by objective is that it encourages people to commit themselves to their goals. Because of MBO people can understand their area of discretion, there authority, the part in setting their objectives.
4. MBO Develops Effective Control
MBO help people to develop effective control. As MBO guides in setting result oriented planning. It is also guides people to develop effective control towards the accomplishment of the goals.
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