Meaning and Definition of MBO

MANAGEMENT BY OBJECTIVES (MBO)

Meaning and Definition

Management By Objectives (MBO) is a management system in which each member of the organisation effectively participates and involves himself. This system gives full scope to the individual strength and responsibility. MBO harmonises the goal of an individual with the organisation’s goal. It creates self-control and motivates the manager into action before somebody tells his to do something.

MBO is popularised in the USA by George Odiorne. According to him, “MBO is a system wherein the superior and the sub-ordinate managers of an organisation jointly identify its common goals, define each individual’s major area of responsibility in terms of the result expected of him and use these measures guides for operating the unit and assessing the contribution of each of its members”.

Prof. Reddin defines MBO as, “the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning”.