The MBO Theory: The Practice Of Management

Management by objectives, initially popularized by Peter Drucker in 1954 in his book The Practice of Management, is a managerial process or system whereby specific objectives are identified and accomplished by superiors and subordinates in a set period; output and task attainment are supervised and assessed on a regular basis. This concept has been considered as one of the most influential managerial theories and touches virtually every part of the business. The profound impact of MBO theory on the management field has fortified further research into whether its effectiveness has been overstated. It is claimed that Drucker’s MBO system has significant advantages in improving office management, however, it has lost validity and utility in the …show more content…
The essay critically evaluates the MBO theory and examines its practicality from the aspects of goal-setting, performance, goal measuring and communication. Although the planning process encourages task achievement, it fails to promote the recognition of operational goals. Similarly, MBO may be flawed in mobilizing the enthusiasm of employees though productivity can be boosted. Moreover, in spite of the advantages in motivating workers through the appraisal system, it can be argued that the measuring of goals lack overall evaluation. Finally, the MBO model suits well with the leadership style. However, the effectiveness of encouraging further communication is under attack. Innovations should be advocated to revolutionize the original MBO theory in order to revitalize this concept. Additionally, top management should decide objectives which are mapped closely to a broader and clearly defined business strategy. Value will be created only at the points where objectives and business strategy