MANAGEMENT BY

OBJECTIVES

PETER DRUCKER
WHAT IS MBO?
IT IS A STARTEGEIC MANAGEMENT MODEL
THAT AIMS TO IMPROVE THE PERFORMANCE
OF AN ORGANIZATION BY CLEARLY DEFINING
THE OBJECTIVES THAT ARE AGREED BY
BOTH MANAGEMENT AND THE EMPLOYEES
OF THE ORGANIZATION.

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 STEPS
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 DEFINITION OF FIRMS GOAL

 ESTABLISHMENT OF OBJECTIVES
 LINK OBJECTIVES WITH THAT OF
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 MESUREMENT OF PERFORMANCE
 FEEDBACK TO THE PERFORMANCE
 INCENTATIVES TO THE PERFORMANCE

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 MANAGEMENT BY OBJECTIVE
ADVANTAGES
• FOCUSES ON OBJECTIVE
• MEASURMENT OF THE PERFORMANCE WITH
STANDARDS FIXED
• PERIODIC EVALUATION OF PERFORMANCE
• HIGHLIGHTS THE NEEDS FOR IMPROVEMENT
• INCREASE MOTIVATION
• FEEDBACK HELPS IN BETTER COMMUNICATION
• MAXIMISES UTILISATION OF HUMAN RESOURCES
DISADVANTAGES
• FOCUSED ONLY ON OUTCOMES
• NEGLECT OTHER IMPORTANT MATTERS
• PRESSURISES EMPLOYEES
• LACK OF COORDINATION BETWEEN EMPLOYEES AND
TOP MANAGEMENT
• DOES NOT FOCUS ON LONG TERM OBJECTIVES
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 USED IN VARIOUS TYPE OF
USES
BUSINESS
TO IDENTIFY TRAINING NEEDS
INCREASE FAIRNESS IN
REWARDING PROCESS
INCREASE EMPLOYEE MOTIVATION
FIND AREAS OF IMPROVEMENT
USE FULL POTENTIONAL
CAPABILITY
INCREASE THE PROFITS

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THANK YOU!
McKinsey’s 7s Framework

• Developed in 1980 by Robert H. waterman Jr. & Tom Peters.

• Tool to assess & monitor changes in the internal situation of an organisation.
• Used to assist with:
• Organisational change.
• Mergers and acquisitions.
• Implementing strategy.
• Understanding the weaknesses of an organisations.