Management Concepts & Organisational Behaviour - MANAGEMENT BY OBJECTIVES

Prerequisites of MBO

   Posted On :  17.05.2018 10:06 pm

MBO is not merely a goal-setting tool. It is a philosophy and has to be understood thoroughly by the managers concerned with achievement of objectives.

Prerequisites of MBO
 
 
1. MBO is not merely a goal-setting tool. It is a philosophy and has to be understood thoroughly by the managers concerned with achievement of objectives.

2. Top management must be willing to implement the system wholeheartedly. Its support and encouragement are crucial for the success of MBO. The necessary democratic climate has to be created in the organisation for setting the goals in a realistic way.

3. Goals have to be spelt out in specific and clear terms. To the extent possible, they must be made realistic because goals motivate employees towards better performance.

4. The key result areas (KRAs) of the business have to be identified and appropriate goals have to be specified for these areas. All the important areas of the business must be covered with meaningful goals.

5. It has to be realized that goal-setting in the MBO process is not an end by itself. It is only a means to achieve organizational effectiveness. Otherwise, goal-setting becomes the primary task rather than their achievement.

6. Appropriate organisation structure has to be designed with well-understood relationships among people such that every goal becomes some individual’s responsibility.

7. Besides clarifying the organizational roles by adopting a suitable organisation structure, attention has to be paid on the resources required by the people to achieve the goals. Otherwise, goals by themselves, however effective they are, do no assure performance. Performance depends on the timely availability of resources. Non-availability or inadequate access to the resources frustrates the individuals concerned with the achievement of goals.

 

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