Principle of ManagementModule Code: MGT-101Semester: 5th Group: E-2 Batch: 18th Submission Date: 25th September 2014

2. Welcome

3. Principle of Management
Module Code: MGT-101
Semester: 5th
Group: E-2
Batch: 18th
Submission Date: 25th September 2014
Submitted to
Mahfuzul Islam Mahfuj
Lecturer
Faculty of Apparel Manufacturing Management & Technology,
Shanto-Mariam University of Creative Technology, Dhaka.
Submitted by
Sl.No. Name ID
1 Md. Hasanuzzaman (Group Leader) 121011403
2 Md. Rakibul Hasan Shorif 121011421
3 Md. Mizanur Rahman 121011423
4 Al-Mamun Mia 121011424

4. Presentation Title
Management By Objective
(MBO Process)

5. Agenda
Introduction
Definition
Objectives
MBO principles
Smart goal
The MBO process
tools
Advantage
Disadvantage
Problem & Limitation
Obsolete
Conclusion

6. Introduction
 Popular Technique of Appraisal of managerial
performance.
 Introduced by Peter Druker’s book, “THE PRACTICE
OF MANAGEMENT”, Published in 1954.
 Usually been design and used with the business &
Industries.
 It is the most widely accepted philosophy of
management today. It is a demanding and rewarding
style of management.
 A process whereby superiors & subordinates
jointly identify the common objectives to make
best of organizational resources.

7. DEFINATION
BY PETER DRUKER

8. DEFINITION OF MBO
 Management Model based on Objectives that are agreed
on between Management and Employees
 The aim is to reach overall Strategic Goals for the
Organization but also Individual Goals for the Employees
 This Model integrates Employees in the planning process
what leads to Participation, Motivation and Commitment

9. DEFINITION OF MBO
 Employees measure their dailyWork on their individual
goals and act in best interest of the company
 Sum of all individual goals forms the overall goal of the
company

10. Objectives
To Measure and judge performance.
To relate individual performance to
organizational goals
To clarify both the job to be done and the
expectations of accomplishment.
To foster the increasing competence & growth
of the subordinates.
To enhance communication between superior
& subordinates.
To serve as a basis for judgment about salary &
Promotion.
To stimulate the subordinate‘s motivation.
To serve as a device for organizational control
& Integration.

11. Balance Between
Management
Employee
Empowerment
The balance between management and
employee empowerment has to be struck, not
by thinkers, but by practicing managers.
Turning their aims into successful actions,
forces managers to master four basic
operations:
 setting objectives,
 organizing the group,
 motivating and communicating,
 measuring performance, and
developing people, including yourself.

12. MBO Principles
Setting Goals Together
Periodically Evaluation
Support from Superior
Focus on Goals, not on Methodologies
MBO
PRINCIPLES

13. How to
Establish
g o a l S ?

14. How to be a smart?
Specific
Measurable
Achievable
Relevant
Time-based

15. SMART G O A L STEP-1
Get SPECIFIC and clear
about what you want to
achieve!
I want to be
rich

16. SMART G O A L STEP-2
Make your goal
MEASURABLE-quantify
what you want !
I want to have
One Billion
Dollars

17. SMART G O A L STEP-3
Make your goal
ACHIEVABLE within
your resources!
I work hard
as hell

18. Make your goal
RELEVANT–Is it
worthwhile?
SMART G O A L STEP-4
I want to
keep her
happy

19. SMART G O A L STEP-5
Your goal needs to be
TIMED-Set a start and a
finish date!
One year till
the first
million

20. SMART G O A L Finally
Work
Specific
Measurable
Achievable Have
S
U
C
E
S
S
Relevant
Time-based

21. Central
Goal Setting
The MBO’s
Process
Individual
Goal Setting
Progress
Monitored
Performance
appraisal
The MBO’s Process
Next MBO
Operating
period
Achievers
Rewarded

22. CENTRAL GOAL SETTING
Routine
Objectives
Problem-Solving
Objectives
Improvement
Objectives
Innovation
Objectives

23. INDIVIDUAL GOAL SETTING
Development of
Individual Goals
Revision of Job
Description
Resource
Allocation

24. PROGRESS MONITORED
- Objectives and key results
- Long and short term priorities
- Scope of assistance expected
- Standards of performance

25. PROPERFORMANCE APPRAISAL
Self Evaluation
360-Degree
Evaluation
Checklist
Evaluation
Critical Incidents
Method

26. Non-Financial
Motivators
Financial
Motivators
 Salaries
 Commission
 Share Ownership
 Performance Pay
 Job Enlargement
 Job Rotation
 Job Enrichment
 Empowerment
ACHIEVERS REWARDED

27. TOOLS

28. KEY PERFORMANCE INDICATORS
Organizational Goals =
Organizational KPI
(e.g. number of complaints in the end of the week)
Individual Goal =
Individual KPI
(e.g. weekly % difference in complaints handled that result in
satisfied customers vs. unsatisfied customers)

29. 8 Key Result Areas
Where Managers Must Pursue Clear Objectives
Marketing
Innovation
Human organization
Financial resources
Physical resources
productivity
Social responsibility
Profit requirement

30. ADVANTAGES OF MBO
• Improves employee motivation
• Improves communication in the
organization
• Flags up and highlights training needs
required to achieve objectives
• Improves overall performance and
efficiency

31. DISADVANTAGES OF MBO
 Requires the cooperation of all employees
to succeed
 Can be bureaucratic and time consuming
(meetings, feedback)
 Can encourage short-term rather a more
focused long-term growth
 Setting targets for certain specialized
employees may be difficult

32. PROBLEMS AND LIMITATIONS OF MBO
Difficulty of setting goals
Failure to teach MBO philosophy
Problems in objective setting
Emphasis on short-term objectives
Inflexibility
Frustration

33. Is MBO
OBSOLETE?

34.  High Volatility in Markets
and Trends
YES! BUT WHY?
 Conservative Individual
Goals
 Having productivity
measured is hard
 Non Collaborative Goals =
Inefficiency

35. Conclusion
• MBO is used for different purposes. Some organizations
use MBO to clarify the employee’s job , others use it to
motivate employees while still other organizations apply
MBO as a performance control mechanism to check
performance. In this way MBO process is directly related
to all the major functions of management.
Thus, MBO is a result-oriented and rational philosophy.
It permits management by results in place of
management by crisis. Many organizations both in the
private sector and the public sector have benefited a lot
through the application of MBO.