Management by Objectives. SMART
(Drucker)

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Summary

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."


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How to Implement Management By Objectives?
How should one implement management by objectives? (...)
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Objectivity in the Measuring / Evaluating Objectives
Drucker introduced a very pertinent concept in management which - if effectively implemented - brings about noticeable i (...)
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Management By Objectives Examples
Can anyone give some examples of organizations using MBO successfuly today? (...)
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Management by Objectives vs. Control Self Assessment
In the principle of Management By Objective, MBO, just like Facilitated Team Workshop in Control Self Assessment, CSA, p (...)
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🔥 NEW How to Set and Reach your Personal Goals / Objectives
At the end of each year, many of us are intrigued by the idea of new year's resolutions. While it is always better to ha (...)
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Mitigating the Disadvantages of Management By Objectives
How can we deal with the disadvantages of MBO? (...)
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What Exactly are 'Objectives' in Management by Objectives?
In Management by Objectives, "objectives" represent annual marks that your program needs to achieve in order to accompli (...)
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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 goe (...)
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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 in (...)
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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/experien (...)
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5 reactions
Great Book on Management by Objectives
A great book I wrote to learn about Management by Objectives is "Performance Reviews, The Bad, The Ugly... The Alternati (...)
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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 (...)
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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 subordi (...)
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SMART is Always Smart...
This is called you define your objectives... Though the implementation is tough.. The results are far from your imaginat (...)
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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 measurab (...)
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Mission Statements and Management by Objectives
Many organisations have a mission statement that tries to encapsulate the overall strategic management of their company. (...)
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1 reactions
Circumstances for Management By Objectives?
MBO is applicable in the right situation / circumstances only: in small and middle business scale. My experience is not (...)
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2 reactions
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Reference of SMART Goals
Does anyone know the reference for SMART goals? I checked in Peter Drucker’s book: “The practice of management” and di (...)
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The Essence of Management by Objectives (MBO)
MBO somewhat resembles farming, each animal or plant is allowed to individually produce a product. The farmer is there t (...)
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Disadvantages of Management by Objectives?
I'm trying to build a complete list of all disadvantages of Management by Objectives: 1. May lead to suboptimalization: (...)
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SMART Management Works!
A very nice article. Organizations transcend from good to great because people use SMART goals as foundation for every d (...)
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2 reactions

Management By Objectives in Public Management
How to introduce Management By Objectives (MBO) in public organizations? Who can share some experiences? Thanks... (...)
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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 r (...)
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1 reactions

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 th (...)
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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 m (...)
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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 n (...)
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Achievable vs. Realistic
I don`t see much difference between the terms "Achievable" and "Realistic", I`d rather say "Results-oriented" or "Result (...)
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Turning the Objectives into Actions
Drucker rightly identified the need for strategy and objectives, but did not pursue how to turn the objectives into acti (...)
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Advanced insights about Management by Objectives, SMART. Here you will find professional advices by experts.


Advantages of Management by Objectives for the Organization

Benefits of MBO at Firm Level
MBO has many benefits for the various parties concerned. Some benefits of MBO for the organization are: 1. The effecti (...)

Advantages of Management by Objectives for the Employee

Benefits of MBO for Employees
MBO has many benefits for the various parties concerned. Some benefits of MBO for the employee are: 1. He knows what h (...)

Advantages of Management by Objectives for the Manager

Benefits of MBO for Managers
MBO has many benefits for the various parties concerned. Some benefits of MBO for the manager are: 1. Motivates the su (...)

Guidelines for Managing by Objectives

Implementing Management by Objectives, Best Practices
W. A. Danny developed 10 rules for MBO systems to be effective: 1. The boss must be devoted to and involved in the MBO (...)

How Management By Objectives Establishes Buy-In, Commitment and Engagement

Employee Participation
The most critical obstacles in managing is none other than the buy-in or commitment of the team. Or what the newly fad t (...)

Other Versions of SMART Method: SMARTIE

MBO
We often use 2 extra terms in SMART and then call it SMARTIE: - Inspiring - Enthousiasm. It puts the word SMART into (...)

Best Practices to Better Target Setting

Management by Objectives, SMART, Business Performance Management, Balanced Scorecard, KPIs, CSFs
In most organizations it is very common to specify organizational targets with the aim of increasing performance. This s (...)

Management by Dynamic Objectives (MBDO)

Implementing a Flexible MBO System
Normally MBO works with a particular time frame in mind. Over that period, various kinds of objectives are set and striv (...)

Managing Intelligent People

People Management
Remember it's best to tell clever people WHAT you want, not HOW to do it... You will find these people more responsive (...)

Fairness of Managers and Leaders: are Fair Leaders More Effective?

Management, Leadership, HR, Performance Appraisals
In many studies the relationship between fairness and effective leadership is studied. Managers and leaders are often re (...)
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Various sources of information regarding Management by Objectives, SMART. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Introduction to Management by Objectives (Drucker)

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Peter Drucker's Five Questions

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When Peter Drucker was introduced to a new business, he always began the conversation with five questions: What is y (...)

Biography and Background of Peter Drucker

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