Management by Objectives Theory--- Still Effective for Current Business Management?

Abstract

Management by objectives (MBO) is a methodology for strategic management which works to improve an organizations effectiveness by clearly defining goals that both administration and employees agree on. It focuses on transforming the organizations strategic objectives into individual objectives. In MBO management mode, top-level executives set their goals according to corporate strategic objectives, and people at the next level set their goals in terms of the goals of top management and so down the chain of command. The core is that the managers work through the issue of determining, consulting, and mutual agreement on objectives with their personnel while also evaluating their achievement. However, some argue that MBO is no longer suitable for current business management. This essay will evaluate MBO and argue that MBO may be a helpful theory for management, but it is no longer applicable to current business management. This essay will first explore the arguments in favor of the MBO theory before arguing that MBOs structure is no longer suitable or efficient for modern administration and management, and its assessment and bonus system, which is considered to motivate employees, is hard to play.