Understanding "Management by Objectives"

Management by Objectives (MBO) is an approach used in the control and direction of many projects. The philosophy of MBO can be described as follows:

  • Is proactive rather than reactive management

  • Is results oriented, emphasizing accomplishment

  • Focuses on change to improve individual and organizational effectiveness

In a project environment, employees are evaluated according to accomplishment rather than according to how they spend their time. Since the project manager has temporarily assigned personnel, many of whom may have never worked for him, it is vital that employees have clearly defined objectives and sub-objectives. In order to accomplish this, they should have a part in setting their own objective and sub-objective. Thus, based upon effective project/functional communications and working relations, Management by Objectives acts as a framework to promote the effective utilization of time and other project resources.

Management by Objectives is a systems approach for aligning project goals with organizational goals, project goals with the goals of other subunits of the organization, and project goals with individual goals.

Management by Objectives can thus be regarded as a tool for planning and obtaining project results for an organization. It is a strategy devised to meet individual needs and the project needs at the same time. Moreover, it serves as a method of clarifying what each individual and organizational "unit" contribution to the project should be.

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