Investopedia

Continue to Site »

Management By Objectives - MBO

Filed Under » ,
Dictionary Says

Definition of 'Management By Objectives - MBO'

A management model that aims to improve performance of an organization by clearly defining objectives that are agreed to by both management and employees. According to the theory, having a say in goal setting and action plans should ensure better participation and commitment among employees, as well as alignment of objectives across the organization. The term was first outlined by management guru Peter Drucker in 1954 in his book "The Practice of Management."
Investopedia Says

Investopedia explains 'Management By Objectives - MBO'

A key tenet of management by objectives is the establishment of a management information system to measure actual performance and achievements against the defined objectives. The major benefits of MBO are that it improves employee motivation and commitment, and ensures better communication between management and employees. However, an oft-cited weakness is that MBO unduly emphasizes the setting of goals to attain objectives, rather than working on a systematic plan to do so.



Articles Of Interest

  1.

    Crisis Management Strategies For Business Owners

    When a PR problem arises, your company will be judged on how you handle it. Are you ready?

  2. Management Strategies From A Top CEO

    Find out what this winning manager did to grow one of the biggest companies in the world.

  3. If These Famous World Leaders Were In Finance

    Would Eisenhower, Roosevelt and Kissinger have made good corporate executives? What about Alexander the Great?

  4. 4 Steps To Creating A Stellar Business Plan

    If you're going into business, you must have a plan. Find out how to put this important document together.

  5. The Path To Becoming A CEO

    Think you have what it takes to be chief executive? Find out what those at the top have in common.

  6. Wall Street’s Glass Ceiling

    It’s tough to boast that there are more female CEOs than ever before when they make up only 4.2% of the total.

  7. Is Lululemon's Chief Product Officer to Blame For Sheer Debacle?

    Lululemon announced April 3 that Chief Product Officer Sheree Waterson was leaving the company as of April 15. Assigning blame might appease the board, but it shouldn't do anything for investors.

  8. Schulze Plus Joly Equals Success?

    Best Buy founder Richard Schulze announced March 25 that he was dropping his bid for the company and rejoining the board as Chairman Emeritus. Two other former board members are rejoining as ...

  9. Is it Time To See Through Lululemon?

    Lululemon has pulled 17% of its women's bottoms due to a quality problem. It turns out that its latest batch of black luon yoga pants, which combine Lycra spandex with nylon, were virtually see ...

  10. These Companies Could Buy Back Up To 40% Of Their Own Stock

    It's usually a great sign when companies buyback their own stock, and these companies are ripe for just that.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center