5. MBO The term MBO was coined by Peter Drucker in 1954 “MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective achievement of organizational objectives.”
6. WHAT IS MBO? We set goals and then performance is judged based on how well we accomplish these goals. Intellectually – this seems like the way to go – and has for years But?
7. The goals must be: Mutually agreeable to employee and supervisor Demanding (stretching) but achievable Within the control of the employee Reviewed periodically for modifications based on events
8. The goals must also be: Clearly defined Simple to understand Written
12. BENEFITS OF MBO 2. Clarity in organisational action. 3. Personnel satisfaction. 4. Basis for organisational change.
13. PROBLEMS AND LIMITATIONS OF MBO Difficulty of setting goals Failure to teach MBO philosophy. Problems in objective setting. Emphasis on short-term objectives. Inflexibility. Frustration