Browse Definitions:
Definition

management by objective (MBO)

Contributor(s): Matthew Haughn

Management by objective (MBO) is a model in which employees and their managers collaboratively develop, define and explicitly agree to objectives. The purpose of MBO is to increase employee productivity and efficiency and, as a result, corporate performance.

Business management expert Pete Drucker developed the concepts of management by objective in his 1954 book, The Practice of Management. Drucker also provided a best practice framework for establishing objectives. According to his SMART goals evaluation scheme, objectives should be specific, measurable, achievable, realistic and time-bound.

Pete Drucker outlined the following five steps for implementing MBO:

1. Establish or clarify organizational objectives in line with the company's mission and vision.

2. Ensure that employees fully understand the objectives of the company as a whole.

3. Involve employees in determining their personal objectives to help achieve corporate goals.

4. Monitor and measure employee performance relative to the goals.

5. Evaluate progress, reward success and provide feedback.

Andy Grove, the former CEO of Intel, borrowed from management by objectives concepts to develop his OKRs (objectives and key results) model, often considered an agile version of MBO.

See John Doerr's presentation on the importance of setting goals:

This was last updated in September 2016

Continue Reading About management by objective (MBO)

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • smart contract

    A smart contract, also known as a cryptocontract, is a computer program that directly controls the transfer of digital currencies...

  • risk map (risk heat map)

    A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces. A...

  • internal audit (IA)

    An internal audit (IA) is an organizational initiative to monitor and analyze its own business operations in order to determine ...

SearchSecurity

SearchHealthIT

SearchDisasterRecovery

  • incident management plan (IMP)

    An incident management plan (IMP), sometimes called an incident response plan or emergency management plan, is a document that ...

  • crisis communication

    Crisis communication is a method of corresponding with people and organizations during a disruptive event to provide them with ...

  • Zerto

    Zerto is a storage software vendor that specializes in enterprise-class business continuity and disaster recovery in virtual and ...

SearchStorage

  • SSD write cycle

    An SSD write cycle is the process of programming data to a NAND flash memory chip in a solid-state storage device.

  • data storage

    Data storage is the collective methods and technologies that capture and retain digital information on electromagnetic, optical ...

  • hard disk

    A hard disk is part of a unit -- often called a disk drive, hard drive or hard disk drive -- that stores and provides relatively ...

SearchSolidStateStorage

  • hybrid hard disk drive (HDD)

    A hybrid hard disk drive is an electromechanical spinning hard disk that contains some amount of NAND Flash memory.

Close