Principle of Management
Module Code: MGT-101
Submission Date: 25th September 2014
Mahfuzul Islam Mahfuj
Faculty of Apparel Manufacturing Management & Technology,
Shanto-Mariam University of Creative Technology, Dhaka.
Sl.No. Name ID
1 Md. Hasanuzzaman (Group Leader) 121011403
2 Md. Rakibul Hasan Shorif 121011421
3 Md. Mizanur Rahman 121011423
4 Al-Mamun Mia 121011424
Management By Objective
The MBO process
Problem & Limitation
Popular Technique of Appraisal of managerial
Introduced by Peter Druker’s book, “THE PRACTICE
OF MANAGEMENT”, Published in 1954.
Usually been design and used with the business &
It is the most widely accepted philosophy of
management today. It is a demanding and rewarding
style of management.
A process whereby superiors & subordinates
jointly identify the common objectives to make
best of organizational resources.
DEFINITION OF MBO
Management Model based on Objectives that are agreed
on between Management and Employees
The aim is to reach overall Strategic Goals for the
Organization but also Individual Goals for the Employees
This Model integrates Employees in the planning process
what leads to Participation, Motivation and Commitment
DEFINITION OF MBO
Employees measure their dailyWork on their individual
goals and act in best interest of the company
Sum of all individual goals forms the overall goal of the
To Measure and judge performance.
To relate individual performance to
To clarify both the job to be done and the
expectations of accomplishment.
To foster the increasing competence & growth
of the subordinates.
To enhance communication between superior
To serve as a basis for judgment about salary &
To stimulate the subordinate‘s motivation.
To serve as a device for organizational control
The balance between management and
employee empowerment has to be struck, not
by thinkers, but by practicing managers.
Turning their aims into successful actions,
forces managers to master four basic
organizing the group,
motivating and communicating,
measuring performance, and
developing people, including yourself.
Setting Goals Together
Support from Superior
Focus on Goals, not on Methodologies
KEY PERFORMANCE INDICATORS
Organizational Goals =
(e.g. number of complaints in the end of the week)
Individual Goal =
(e.g. weekly % difference in complaints handled that result in
satisfied customers vs. unsatisfied customers)
8 Key Result Areas
Where Managers Must Pursue Clear Objectives
ADVANTAGES OF MBO
• Improves employee motivation
• Improves communication in the
• Flags up and highlights training needs
required to achieve objectives
• Improves overall performance and
DISADVANTAGES OF MBO
Requires the cooperation of all employees
Can be bureaucratic and time consuming
Can encourage short-term rather a more
focused long-term growth
Setting targets for certain specialized
employees may be difficult
PROBLEMS AND LIMITATIONS OF MBO
Difficulty of setting goals
Failure to teach MBO philosophy
Problems in objective setting
Emphasis on short-term objectives
High Volatility in Markets
YES! BUT WHY?
measured is hard
Non Collaborative Goals =
• MBO is used for different purposes. Some organizations
use MBO to clarify the employee’s job , others use it to
motivate employees while still other organizations apply
MBO as a performance control mechanism to check
performance. In this way MBO process is directly related
to all the major functions of management.
Thus, MBO is a result-oriented and rational philosophy.
It permits management by results in place of
management by crisis. Many organizations both in the
private sector and the public sector have benefited a lot
through the application of MBO.