Management by Objectives and

Planning in Management

Discover how Management by Objectives can enhance your organization's

performance and learn the key elements of effective planning in management.
Made By : Ashish
Aditya Singh
Divyansh Khattar
Sarthak Bahl
 Management by Objectives
Management by Objectives (MBO) is a management approach that involves setting specific, measurable,
achievable, relevant, and time-bound (SMART) objectives within an organization.

Origin and Definition MBO Principles

Management by Objectives (MBO) is a results- MBO focuses on goal specificity, participative
oriented management approach introduced by decision-making, and continuous performance
Peter Drucker in the 1950s. It emphasizes the evaluation to align individual and team objectives
importance of setting clear, measurable, and with the organization's overall mission.
achievable goals within an organization.
Key Components of Management by
Objectives

Goals setting Team collaboration Define Metrics

Establish clearly defined and Managers and employees Establish measurable criteria to
measurable objectives at the collaborate to define goals evaluate progress and success of
organizational, departmental, together, boosting ownership and objectives.
team, and individual levels. commitment
Establishing Checkpoints Monitoring and Feedback Adaptability
Adapting goals to fit the changing
It involves regular reviews Managers provide timely business landscape, being flexible
between superiors and feedback to employees, in response to dynamic
subordinates to assess progress by acknowledging achievements and environments. This involves being
setting clear standards, seeking addressing any deviations from proactive in recognizing shifts,
regular progress reports, the planned course of action. This making strategic adjustments, and
addressing challenges, and facilitates continuous ensuring goals remain relevant
adjusting targets as needed for improvement and course and effective in the face of
effective control. correction. evolving challenges.
Benefits of MBO
1 Improved Planning: 2 Increased Productivity: 3 Better Organization:
MBO involves collaborative goal- With a focus on important tasks such Individual goal-setting in MBO
setting, enhancing goal clarity and as cost reduction and seizing prompts reevaluation of job
resulting in realistic plans with active opportunities, MBO contributes to descriptions and organizational
participation from both superiors and higher productivity by concentrating structures. This process enhances
subordinates.. management efforts on strategic clarity, accountability, and
matters. responsiveness within the
organization, fostering an
environment conducive to effective
goal achievement
4 Enhanced Performance Appraisal: 5 Executive Development:
MBO emphasizes a long-term and
Defining expected results establishes clear comprehensive viewpoint, encouraging
criteria for performance appraisal, intensifying executives to acquire knowledge and skills on
accountability. MBO provides an objective the job as a by-product of meeting performance
measuring instrument for evaluating actual requirements. It serves as a tool for self-
performance. development through learning and
experimenting in the goal-setting process.
Implementing Management by Objectives

Top-level Training of Managers: Clarity of Purpose:

Commitment:
Clearly define the purpose of
Sustained top management Successful MBO MBO, whether for long-range
commitment is crucial to implementation requires planning, performance
prevent the loss of enthusiasm managers to be well-trained in appraisal, or productivity
among employees. Managers its procedures and benefits. improvement. Tailor the
should integrate MBO into Lack of proper training can program details accordingly
organizational procedures to lead to program failure. to align with its intended
ensure its continuous vitality. purpose.
Encouragement of Delegation of Overall Integration:
Participation: Adequate Authority:
MBO should not be isolated;
Managers must actively Subordinates accepting it must be integrated across
encourage subordinates' challenging assignments need organizational programs,
participation in goal setting sufficient authority to including human resource
for increased commitment. accomplish goals. MBO's planning, development,
This involves relinquishing success depends on managers' product planning, production
some control and empowering willingness to delegate control, and financial
subordinates in defining and authority, ensuring planning. This ensures a
achieving their objectives. subordinates' acceptance of holistic and effective
responsibilities.. implementation.
Challenges of Implementing MBO
While MBO offers numerous benefits, it is not without its challenges. Overcoming these hurdles is crucial to
maximize the potential of this approach.

1 Resistance to 2 Lack of 3 Imposition of Goals:

Change: Preparation:
MBO necessitates Poor planning prior to Superiors often impose
significant shifts in MBO implementation is a goals without input from
traditional thinking and common weakness. subordinates, hindering
practices, such as Adequate training and two-way communication.
hierarchical structures and involvement of all Unrealistic goals and
unilateral goal setting. management levels are disregard for external
Overcoming resistance crucial for successful factors beyond subordinate
requires continuous execution. control can undermine
education and patience effectiveness.
among managers.
4 Non-quantifiable 5 Unnecessary 6 Lengthy Process:
Targets: Paperwork:
Setting measurable goals
MBO's emphasis on MBO results in excessive through consensus and
quantitative, measurable paperwork, including conducting periodic
objectives faces challenges newsletters, manuals, and reviews in MBO requires
in areas where output performance reports. This substantial time. The time-
quality matters more than paperwork, including intensive nature of the
volume. Examples include detailed performance process may test the
legal, design, and research reports, can lead to time patience of those
departments, making and effort wastage. responsible for
traditional measurement implementation.
ineffective.
Planning in Management
• Effective planning is a cornerstone of successful
management, providing a roadmap to achieve desired
outcomes and navigate uncertainties. Planning involves
the systematic process of setting goals, developing
strategies, and outlining actions to achieve organizational
success.
• It is crucial for guiding decision-making, optimizing
resources, and aligning efforts towards common goals.
Benefits of Effective Planning

Improved Decision Resource Optimization: Risk Mitigation:

Making: Effective planning involves
Planning ensures that resources,
anticipating potential risks and
Well-thought-out plans provide a including human capital, finances, developing strategies to mitigate
roadmap for decision-makers. and materials, are utilized them. By identifying and
They help in foreseeing potential optimally. It involves allocating addressing risks in advance,
organizations can minimize the
outcomes, evaluating risks, and resources based on priority, impact of unforeseen events.
considering various alternatives avoiding overallocation or
before making decisions. underutilization, and preventing
unnecessary waste.
Improved Adaptability to Enhanced Goal Alignment:
Change: Communication and
Effective planning aligns
Collaboration:
Planning involves scenario individual and team goals with the
analysis and flexibility to adapt to The planning process encourages broader organizational mission
changing circumstances. communication and collaboration and objectives. It ensures that
Organizations with effective among team members. It ensures everyone understands how their
planning processes are better that everyone is on the same page efforts contribute to the overall
equipped to respond to unexpected regarding goals, responsibilities, success of the organization.
changes in the internal and and timelines
external environment.
Steps in the Planning Process
• Environmental Analysis:
• Assess Internal and External Factors: Examine the organization's strengths, weaknesses,
opportunities, and threats. Consider the impact of economic, technological, social, political, and
legal factors.
• Goal Setting:
• Define Specific and Measurable Objectives: Clearly articulate goals with specific criteria for
success. Ensure they are relevant to the organization's mission and time-bound to create a sense of
urgency.
• Developing Alternatives:
• Identify Strategies and Approaches: Encourage creative thinking to generate a range of potential
strategies. Seek input from diverse perspectives and assess risks and benefits associated with each
alternative.
 • Evaluating Alternatives:
• Assess Feasibility and Effectiveness: Conduct cost-benefit analysis, evaluate risks, and ensure
alignment with defined objectives. Assess the financial implications and potential risks of each
alternative.
• Implementation of Plans:
• Execute the Chosen Plan: Clearly outline action steps, allocate necessary resources, and develop a
realistic timeline. Initiate the plan with a focus on effective resource utilization.
• Monitoring and Adjusting Plans:
• Review Progress and Make Adjustments: Establish key performance indicators (KPIs) to measure
progress. Conduct regular reviews, remain flexible, and be open to adjustments based on changing
circumstances.

In summary, the planning process comprises a thorough analysis of internal and external factors, establishing clear
goals, exploring diverse alternatives, evaluating feasibility, implementing the chosen plan, and continuous
monitoring with adaptability. This systematic approach enables organizations to navigate uncertainties and strive
for desired outcomes.
THANK YOU!
Made by:
Ashish
Sarthak Bahl
Divyansh Khattar
Aditya Singh