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Management By Objectives term was first popularized by Peter Drucker in 1954 in his book 'The Practice of Management'. DOMAINS AND LEVELS Objectives can be set in all domains of activities (production, services, sales, R&D, human resources, finance, information system...). Some objectives are collective, for a whole department or the whole company, others can be individualized. RATIONALE It is all too easy for managers to fail to outline, and agree with their employees, what it is that everyone is trying to achieve. MBO substitutes for good intentions a process that requires rather precise written description of objectives for the period ahead and Timelines for their monitoring and achievement. The process requires that the manager and the employee agree to what the employee will attempt to achieve in the period ahead, and (importantly) that the employee accepts and agree to the objectives (otherwise commitment will be lacking). For example, whatever else a manager and employee may discuss and agree in their regular discussions, let us suppose that they feel that it will be sensible to introduce a Key Performance Indicator to show the development of sales revenue in a part of the firm. Then the manager and the employee need to discuss what is being planned, what the time-schedule is and what the indicator might or might not be. Thereafter the two of them should liaise to ensure that the objective is being attended to and will be delivered on time. Organizations have scarce resources and so it is incumbent on the managers to consider the level of resourcing and to consider whether the objectives that are jointly agreed within the firm are the right ones and represent the best allocation of effort. PRACTICE MBO is often achieved using set targets. MBO introduced the SMART criteria: Objectives for MBO must be SMART (Specific, Measurable, Achievable, Realistic, and Time-Specific).S.M.A.R.T. defined at LearnMarketing.net Several managers have employed this management technique and have applied it to their company. These managers include Mukesh Ambani, Don Sheelen and Steve Jobs. Objectives need qunatifying and monitoring. Reliable Management Information Systems are needed to establish relevant objectives and monitor their "reach ratio" in an objective way. Pay Incentive s (bonuses) are often linked to results in reaching the objectives LIMITATIONS However, it has been reported in recent years that this style of management receives criticism in that it triggers employees' unethical behaviour of distorting the system or financial figures to achieve the targets set by their short-term, narrow bottom-line, and completely self-centered thinking.1 REFERENCES
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