Management Concepts & Organisational Behaviour - MANAGEMENT BY OBJECTIVES
MANAGEMENT BY OBJECTIVES
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Management guru Peter Drucker is credited with being the first to introduce Management by Objectives (MBO) as an approach for increasing organizational effectiveness.
MANAGEMENT BY OBJECTIVES
Different goals are sought to be achieved by the introduction of MBO in organizations. MBO, as a management tool, thus, is so versatile that it is used;
1. to integrate the organizational goals with the individual goals;
2. as a motivational technique wherein individuals are driven towards the achievement of goals;
3. to appraise the performance of managers; and
4. to control the activities as they are performed.
Drucker suggests that objectives are to be specified in the key result areas of business (KRAs). A key result area may be understood as one the performance of which, directly and vitally affect the success and survival of the business. Accordingly, for a manufacturing firm production, productivity, profitability, market share, social responsibilities, employer and employee relations, manager and worker development, development of physical resources, constitute the important key result areas. It may be understood that the KRAs vary from business to business. Since MBO involves a systematic effort towards the achievement of objectives, utmost care has to be exercised in setting the objectives for all the key result areas.
Drucker suggests that objectives are to be specified in the key result areas of business (KRAs). A key result area may be understood as one the performance of which, directly and vitally affect the success and survival of the business. Accordingly, for a manufacturing firm production, productivity, profitability, market share, social responsibilities, employer and employee relations, manager and worker development, development of physical resources, constitute the important key result areas. It may be understood that the KRAs vary from business to business. Since MBO involves a systematic effort towards the achievement of objectives, utmost care has to be exercised in setting the objectives for all the key result areas.
Tags : Management Concepts & Organisational Behaviour - MANAGEMENT BY OBJECTIVES
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