Prerequisites for installing MBO programme

Some of the prerequisites for installing of MBO programme are:

1. Purpose of MBO shoould be clearly defined.
2. Top management support for using objectives to plan and control is essential.
3. Systematic traing is required in the organisation for disseminating the concepts and philosophy underlying MBO.
4. Success with MBO requires a commitment on the past of each individual involved in this type of system.
5. Feedback is an essential ingredient in sustained learning and improvement in situations.
6. It must be carried all way down to the first line of the organization.

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Problems and Limitations of MBO

Some of the common problems of MBO are as follow:

1) Time and Cost:
                     It is a process which requires large amount of the most scarce resource in the organisation and time of the senior managers. Sometimes managers get frustrated and feel overburdened.
2) Failure to teach MBO Philosophy:
                     Management often fail to understand and appreciate this new approach. MBO demand rigorous analysis as an integral element of the management process but the organisation may not be used to rigour.
3) Problems in Objective setting:
                     Setting of verifiable objectives is difficult atleast in some areas. Objectives are more in the form of statement rather than in quantitative form.
4) Emphasis on short-term objectives:
                     Sometimes, in order to be more precise there is a tendency to emphasise on short-term objectives usually for a year or even less. There is a danger in emphasizing short-term objectives at the cost of long terms objectives.
5) Inflexibility:
                     In a dynamic environment, a particular objective may not be valid for even, in the context of revised objectives, changed premises, it is useless to follow the old objectives. Thus inflexibility created by applying MBO may cause harms.
6) Frustration:
                    Sometimes MBO creates frustration among managers, because it tends to arouse high expecation forrapid change, particularly among the young and junior managers.
               

                  Inspite of these obstacles MBO continues to be a way of managing the organisation problems of MBO can be over come by implementing it properly.

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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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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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