What is management by objectives (MBO)?

Management by Objectives (MBO) is a strategic method to increase the performance of a business. This is a process completed by clearly and evidently stating the goals and objectives that are discussed and agreed between the management and employees.

Stated in a theory, when employees have their say in goals and objectives for the business boosts their motivation and commitment towards the organisation.

Benefits of management by objectives:


  • Employees will feel more motivated and feel more part of the organisation, this means that they will take more pride in their work. Allowing positive outcomes for the business.
  • It helps the organisation build a relationship between the employees and managers as they will be communicating with each other.
  • Management builds goals for the business to make it successful.

Drawbacks of management by objectives:


  • The goals can put pressure on the employees to complete the goals at a certain time.
  • The management by objective focus of the goals to make the business successful, they forget about the health of the employees, culture of the business etc.
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