Management by Objectives. SMART
(Drucker)

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Defining objectives for employees and directing their performance against these objectives. Explanation of Management by Objectives of Peter Drucker. ('54). SMART.

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Peter Drucker - Management By ObjectivesWhat is Management by Objectives? Description

MBO relies on the defining of objectives for each employee and then to compare and to direct their performance against the objectives which have been set. It aims to increase the performance of the organization by matching organizational goals with the objectives of subordinates throughout the organization. Ideally, employees receive strong input to identify their objectives, time lines for completion, etc.
MBO includes continuous tracking of the processes and providing feedback to reach the objectives.


Peter Drucker

Management by Objectives was first outlined by Peter Drucker in 1954 in his book 'The practice of Management'. According to Drucker managers should avoid 'the activity trap', getting so involved in their day to day activities that they forget their main purpose or objective. One of the concepts of MBO was that instead of just a few top-managers, all managers of a firm should participate in the strategic planning process, in order to improve the implementability of the plan. Another concept of Management by Objectives was, that managers should implement a range of performance systems, which are designed to help the organization to function well. Clearly, Management by Objectives can thus be seen as a predecessor of Value Based Management.


Principles of Management by Objectives

  • Cascading of organizational goals and objectives,

  • Specific objectives for each member,

  • Participative decision making,

  • Explicit time period, and

  • Performance evaluation and provide feedback.

Management by Objectives also introduced the SMART method for checking the validity of the objectives, which should be 'SMART':

  • Specific

  • Measurable

  • Achievable

  • Realistic, and

  • Time-related.

In the 90s, Peter Drucker put the significance of this organization management method into perspective, when he said: "It's just another tool. It is not the great cure for management inefficiency... Management by Objectives works if you know the objectives, 90% of the time you don't."




Management by Objectives, SMART Forum (25 topics) Help
  Is Management By Objectives Transferable to the Care Sector?
I'm currently working in care as a team leader and I'm looking for a good way to manage staff. Any suggestions/experiences on whether or not MBO is transferable to this environment?...
     
  Mitigating the Disadvantages of Management By Objectives
How can we deal with the disadvantages of MBO?...
     
  Objectivity in the Measuring / Evaluating Objectives
Drucker introduced a very pertinent concept in management which - if effectively implemented - brings about noticeable improvements in organization.
However, the challenge being faced is the objective measuring of set goals/targets. Some jobs...
     
  Management By Objectives in Public Management
How to introduce Management By Objectives (MBO) in public organizations? Who can share some experiences? Thanks......
     
  What Consequences if Top Executive don't do what they Promised
Can somebody give exemples or hints of what kind of consequences the CEO of a company could take if his executive team repetively doesn't deliver what they promised?...
     
  Management by Planning Should Replace Management by Objectives
2 of the most respected men in management theory, Drucker and Deming, disagreed over MBO. Deming proposed that MBO did not take into account the scientific difference in variation of results caused by assignable...
     
  Mutual Commitment is the Basis of Management by Objectives
The idea of Peter Drucker on management by objectives is based on the integration of different hierarchical levels of the company. The common point is the commitment, responsibility and maturity. It is to achieve the objectives through a common ch...
     
  Procedure on Developing Objectives and Monitoring
I am in urgent need of subject procedure and willing to pay. I.e. what's the procedure on writing SMART objectives and monitoring through scorecards....
     
  Management by Initiatives!
To my personal considerations, MBO has had its day. It's time to add a new dimension to this 'age old' management style which reminds me of macho-management of the 60's and 70's (sic).
What should replace MBO is what I call MBI (Management by I...
     
  Mission Statements and Management by Objectives
Many organisations have a mission statement that tries to encapsulate the overall strategic management of their company.
Such statements are designed to implicitly state the organisations objectives in the broader sense. Yet this often fa...
     
  Does Management by Objectives Work in a Church?
I find a lot of problems in church as a pure non profit organization. There is no a clear vision. There are not measurable objectives.
How can I implement MBO in church?...
     
  Circumstances for Management By Objectives?
MBO is applicable in the right situation / circumstances only: in small and middle business scale. My experience is not really good when I was CEO for a big company with over 3,000 workers with heterogene skill levels....
     
  Turning the Objectives into Actions
Drucker rightly identified the need for strategy and objectives, but did not pursue how to turn the objectives into actions. We have....
     
  How to Implement Management By Objectives?
How should one implement management by objectives?...
     
  Management By Objectives Examples
Can anyone give some examples of organizations using MBO successfuly today?...
     
  Management by Objectives and Clear Objectives
MBO gives clear direction to an employee what he is paid to do.... Under SMART whatever you do beyond set objectives goes in vain... Clearly defined objectives will be a greater use to him to avoid this. The million dollar question here is, how many ...
     
  SMART is Always Smart...
This is called you define your objectives... Though the implementation is tough.. The results are far from your imagination... Thats how they say... "good things don't come easily" - good to read it here....
     
  Setting SMART Objectives
What would be the best SMART objectives to set for the first-line manager, who just started on the job in the retail industry in the current economic crisis...
     
  Management by Objectives Needs Tracking and Feedback
I would like to dedicate my opinion on MBO. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. MBO includes ongoing tracking and feedback in the process to reach objectives, employ...
     
  Achievable vs. Realistic
I don`t see much difference between the terms "Achievable" and "Realistic", I`d rather say "Results-oriented" or "Results-directed"....
     



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Expert Tips - Management by Objectives, SMART Premium
  Advantages of Management by Objectives for the Organization - Benefits of MBO at Firm Level
 
  Advantages of Management by Objectives for the Employee - Benefits of MBO for Employees
 
  Advantages of Management by Objectives for the Manager - Benefits of MBO for Managers
 
  Guidelines for Managing by Objectives - Implementing Management by Objectives, Best Practices
 
  How Management By Objectives Establishes Buy-In, Commitment and Engagement - Employee Participation
 
  Other Versions of SMART Method: SMARTIE - MBO
 
  Management by Dynamic Objectives (MBDO) - Implementing a Flexible MBO System
 
  Managing Intelligent People - People Management
 
  Fairness of Managers and Leaders: are Fair Leaders More Effective? - Management, Leadership, HR, Performance Appraisals
 

Resources - Management by Objectives, SMART Premium
Management by Objectives vs Management by Walking Around vs Management by Exception - MBO MBWA MBE
SMART Goal Setting Template - Goal Setting
Human Motivation - Employee Motivation
Employee Performance Management and Performance Appraisals (In depth) - Performance Appraisals, Performance Management, Employee Performance
Management by Objectives Diagram - Management by Objectives
Biography and Background of Peter Drucker - Overview of Peter Drucker's Life and Writings
 

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Compare with Management by Objectives: CSFs and KPIs  |  Scientific Management  |  Value Based Management  |  Results-Based Leadership  |  RACI  |  Change Management  |  Seven Habits  |  Seven Surprises  |  Path-Goal Theory  |  Leadership Continuum  |  Result Oriented Management  |  Hoshin Kanri - Policy Deployment


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