BUSI 310 Management by Objectives Liberty University(USE AS GUIDE ONLY)

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Running head: MANAGEMENT BY OBJECTIVES
Management by Objectives
BUSI 310
Liberty University
Abstract
Management by objectives (MBO), designed in the mid-20th century, is an effective and
commonly used strategy managers can use to achieve objectives more efficiently than they could
MANAGEMENT BY OBJECTIVES
without MBO, but it comes with responsibilities they must follow. MBO calls for strong leaders
who are willing to discuss progress with their subordinates. Although MBO is usually associated
with autocratic leadership because of the nature of MBO, democratic leaders can also apply
MBO. Managers can use it in societal responsibility and in corporate social responsibility to
meet the needs of the stakeholders and society at large. MBO can also spark motivation, and
incentives are necessary for MBO to be effective. It encourages use of SMART and SMARTER
goals, as they help organizations meet their objectives effectively. Although MBO can be used
for specific goals, it is a general management paradigm, commonly associated with strategic
managers and can facilitate the difficulties present in strategic management. Finally, it helps
with total quality management (TQM) and new public management (NPM).
Keywords: goals, incentives, management by objectives (MBO), SMART, SMARTER
MANAGEMENT BY OBJECTIVES
Management by Objectives
Organizations seek to maximize efficiencies and minimize waste. Although management
has existed since businesses have existed, the last two centuries saw major changes in
management. Businesses continue to streamline their management processes so that they can
complete tasks on time and earn money. Management by objectives (MBO) is an important and
efficient system companies and organizations can use to achieve their goals and fulfill their
purposes.
As a paradigm, MBO has existed in its current form since the last half century, as radical
changes in American, British, and French management principles occurred then. Peter Drucker
coined the term management by result in 1954 (Sorbis&Okouma, 2017) to refer to participative
management, where managers and employees work cooperatively. Businesses institutionalized
MBO in the 1980s to further streamline processes because of a recession that occurred in the
1970s, and businesses combined the uses of MBO and new public management (NPM; Larsson
&Hanberger, 2016).Shortly thereafter, MBO was applied to the public sector and the
governments of some countries, such as Sweden, decentralized. The Swedish government
adopted MBO in 1991 (Sorbis&Okouma, 2017). More recently, managers in public servicehave
adopted these combinations, along with including total quality management (TQM) in their tasks.
Moreover, as TQM has become popular worldwide (Psomas, Vouzas, Bouranta, &Tasiou, 2017),
one can conclude that MBO has become increasingly popular because of its utility.
MBO ensures efficiency in organizations because it allows managers to set objectives and
meet with subordinates to discuss progress. MBO is more effective and efficient than mere
management because it shows that the organization has goals and that managers are more willing
to meet with subordinates about the progress of the tasks they are working on. As managers set

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Specifications

Course: BUSI 310 Management by Objectives Liberty University(USE AS GUIDE ONLY)
Subject: BUSI 310 Management by Objectives Liberty University(USE AS GUIDE ONLY)
Subject code: BUSI 310 Management by Objectives Liberty University(USE AS GUIDE ONLY)
Year of study: 17-18
Document
Section: Homework & Assignments
Made on: 27-01-2020
Type: .pdf
Pages: 14
Language: English
Tags
BUSI 310 Management by Objectives Liberty University(USE AS GUIDE ONLY)