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.

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What are the goals of a business finance?

The initial goal of business finance is to manage a firm's monetary books while maximizing the value of the business and monitoring financial risks.
A business' finance team have many responsibilities and goals and although the main goal is to maximize the value of the company, many things have to be taken into account and put into place, these include:
Monitor Financial Activity:
All businesses set out to make money, and by monitoring financial activity, you will be able to keep track of the losses and profits made. In order to stick to the ultimate business goal of maximizing the company's value, you will need to accurately record every cent that the company is spending, and every cent that is coming into the company. Comparing those two factors should help you discover as to whether the business is increasing in value - one of the main goals of business finance.
Assessing:
A goal of business finance is to always be making progress in order to take the business to new heights. In order to ensure this happens and can be done, it's advisable that financial books are regularly assessed, as are the profit and loss mark ups. This allows the business to see what is working and what needs to be changed. For example, if an area of the company is losing too much money, this area will have to be discussed as it is hindering the main goal of business finance.
Financial Planning:
A goal of business finance is to always have a prolific company with a good, healthy income and minimal, if not non-existent losses. In order to obtain a prolific business, a financial plan should always be made and constantly added to. Although something like a budget plan can never be stuck to 100%, sticking to it as much as possible will result in avoiding unnecessary losses which is paramount to a business being successful and valuable.

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Types of Debentures

Types of debentures:

1. Simple naked or unsecured debentures: - 

                              These debentures are not given any security on assets. They have no priority as compared to other creditors.
2.  Secured or mortgage debentures: -  

                              The se debentures are given a security on assets of the debentures company. In case of default in the payment of interest or principle amount, debenture holders can sell the assets in order to satisfy their claims.
3.  Bearer debentures: - 

                               These debentures are easily transferable. They are just like negotiable instruments. The debenture is handed over to the purchaser without any registration deed.
4.  Registered debentures: - 

                               As compared to bearer debenture which is transferred by mere delivery, registered debenture require a procedure to be followed for the transfer.
5.  Redeemable debenture: - 

                               These debentures are to be redeemed on the expiry of ascertain period. The interest on the debenture is paid periodically but the principle amount is returned after a fixed period.
6. Irredeemable debentures:-  

                               Such debentures are not redeemable during the life time of the company. There are payable either on the winding up of the company or at the time of any default on the part of the company.
7.  Convertible debenture: - 

                               Sometimes convertible debenture is issued by a company and the debenture holders are given an option to exchange the debenture into enquiry shared after the lapse of a specified periods.

8. Non-convertible debentures:- 

                                Non-convertible debentures do not confer any option on the holder to convert the debentures into equity shares and are redeemed at the expiry of specific period. these non-convertible debentures carry higher interest rate than other types of debentures because of the non-attractive feature of non-convertibility into other form of stocks.

9. Subordinate debentures: 

                                It is an unsecured debt, which is junior to all other debts. this types of debt will have a higher interest rate than senior debt and will frequently have rights of conversion into ordinary shares. subordinated debt is often called mezzanine finance because it ranks between equity and debt.

10. Guaranteed debentures: 

                                 Some business are able to raise long-term money because their debts are guaranteed, usually by their parent companies. in some instance, the governement guarantee the bonds issued by their undertakings and corporations like electricity supply board, irrigation corporaton, etc.

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Features of MBO

Based on the definitions of MBO its features can listed out as follows:

1. MBO is an approach and philosophy to management and not merely a technique. It is likely to affect every management practice in the organisation. It employs several techniques but it is not merely the sum total of all these techniques. Thus it is a particular way of thinking about management.
2. MBO provides the stimulus for the introductions of new techniques of management and enhances the relevance and utility of the existing ones.
3. MBO is the joint application of a number of principles and techniques, and works as integrating device.
4. The basic emphasis of MBO is an objectives, it tries to match objectives and resources.
5. This process clarifies the role very sharply in terms of what one is expected to achieve.
6. Periodic review of performance is an important feature of MBO.
7. Objectives in MBO provide guidelines for appropriate systems and procedures for instance resource allocation, delegation of authority etc., are determined on the basis of objectives.

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Concept of MBO

                   MBO is both a philosophy and approach of management. It is a process where by superiors and subordinates jointly identify the common objectives, set the resuts that should be achieved by the subordinate assess the contribution of each individual, and integrate individuals with the organisation so as to make best use of organisational resources.
                   `Koontz` defined MBO as---- 
                                    "MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner consciously directed towards the effective and efficient achievement of organisational objectives". It emphasizes the importance and operation of MBO.
                   `S.K.Chakra borthy` opined--
                                   " MBO is a result - centered, non specialist operational managerial process for the effective utilization of material, physical and human resources of the organisation by integrating the individual with the organisation and oraganisation with the environment. 

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What is MBO?

Management By Objectives(MBO) has gained immense popularity during the past decades. "Peter.F.Drucker" has pioneered the concept of MBO. According to him, objectives are the ends and means of an enterprise, all the activities must be framed and directed to perform objectives and no deviations from the achievement of objectives is permitted. There should be a great concern and commitment towards objectives throughout the organisations at any level, then only organisations can survive. It means organisations are to be managed in such a way to achive the objectives. Hence this concept has gained immense popularity all over the world. In India also, in many organisations, MBO has become the way of management process.

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Management as a Profession

                   A profession is an "occupation backed by organized knowledge and training and to which entry is regulated by a representative body"
                   Thus, all professions are occupation in the sense that they provide means of livelihood.
                   However, all occupations are not professions because some of them lack certain features of a profession

Features of profession:

1. Organized body of knowledge, principles and techniques.
2. Formal training and education
3. Restriction on entrance
4. Existence of a representative body
5. Prevalence of a code of conduct
6. Sprit of service to the society

Application of the features to the Management:

1) Organized body of knowledge:

                  Management has its own body of systematized knowledge which contains the principles and techniques. These principles established cause and effect relationships and are capable of universal application.

A.P.M. Fleming has rightly remarked that management has a technique quite a part from the technology of the particular works concerned.
2) Formal training and Education:
                 Management is not merely theory. Here the person is prepared o take practical decision in business. To import management education and training, there are large number of formal institutes in various countries, including India. Several tools of management such as business, Psychology, Business law, Statistics, Data-processing, operations research and cost accounting etc. have been developed. The business house today prefer to employ those managerial personal who have obtained a professional degree in management from some recognised institutes.
3) Restriction on Entrance:
               Entrance into a profession is restricted by standards established by it. But management does not restrict the entry of people into managerial jobs with only a special academic degree. 
4) Existence of an organization: 
               Various management organizations have come into existence in India to guide the managers in: 

• To regulate the behaviors of members
• To create a code of conduct for guiding the activities of the profession.
• To promote and build up the image of management as a profession

              In India, All India Management Association and Indian Association for Management Development were established to train the managers.

              Function of Association is to manage and co-ordinate the research work in the various areas of management. It is, however, true that norms of managerial behaviour have not yet been established and we do not have uniform methods of entry.

5) Prevalence of a code of conduct:

             Every profession formulates its own ethical codes for the conduct of its members. But there is no uniform code of conduct for the practicing managers. In spite of it, managers are socially responsible. They have to protect the interest of the owners, workers, suppliers, consumers and the government.

6) Spirit of service to the society:

              Though professionals charge fee for the service rendered, they give priority to service over the desire for monetary reward.

              For Ex: a doctor earns his livelihood from his profession of medicine but service to society is upper most in his mind. As managers enjoy the respect of society, they should also fulfill their social obligation.

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