Benifits or merits of MBO

1) Better Managing: 
                                MBO helps in better managing the organisational resources and activities. Resources and activities are put in such a way that they result into better performance in the five ways,
    a) The relationship between clarity of objectives and improvement of performance is the cornerstone of MBO philosophy.
   b) Clarity of roles, including the areas of authority and responsibility, leads to improved performance.
   c)  Periodic review provides opportunities for taking stock of the situation and planning future course of action.
   d) Participation by managers in the management process is expected to ensure achievement of objectives.
   e) MBO provides a base for the philosophy that there is always scope for improved.

All these factors for performance improvement are generated if MBO is followed properly.
2) Clarity in organisational Action:
                             MBO tends to provide the key result areas where organisational efforts are needed. For instance A key factor in objective setting is the external environmental factors is taken care of at the level of objective setting itself. Thus it provides basis for long range planning in the organisation.
3) Personnel Satisfaction:
                             MBO provides greatest opportunity for personnel satisfaction. This is possible because of two closely related phenomena.
4) Basis for Organisational Change:
                             MBO stimulates organizational change and provides a frame work and guidelines for planned change, enabling the top management to initiate, plan, direct and control the direction and speed of change.

Posted in: management By Objectives(MBO),Principles of Management