What is the importance of MBO?

Answer 1

Importance of MBO:

i. Develops result-oriented philosophy: MBO is a result-oriented philosophy. It does not favor management by crisis.

ii. Formulation of dearer goals: MBO produces goals that identify desired/expected results. Goals are made verifiable and measurable which encourage high level of performance

iii. Facilitates objective appraisal: Management by self-control replaces management by domination in the MBO process. Appraisal becomes more objective and impartial.

iii. Raises employee morale: Participation, clearer goals and improved communication will go a long way in improving morale of employees. Such participation provides the opportunity to influence decisions and clarify job relationships with superiors, subordinates and peers.

iv. Facilitates effective planning: Developing action plans, providing resources for goal attainment and discussing and removing obstacles demand careful planning.

v. Acts as motivational force: MBO gives an individual or group, opportunity to use imagination and creativity to accomplish the mission

vi. Key Result Areas: The emphasis in MBO is on performance improvement in the areas which are of critical importance to the organization as a whole.

vii. Systems Approach: MBO is a systems approach of managing an organization. It attempts to integrate the individual with the organization and the organization with its environment. It seeks to ensure the accomplishment of both personal and enterprise goals by creating goal congruence.

viii. Optimization of Resources: MBO sets an evaluative mechanism through which the con­tribution of each individual can be measured.

ix. Simplicity and Dynamism: MBO is a non-specialist technique and it can be used by all types of managers.

x. Multiple accountability: Every member of the organization is accountable for accomplishing the goals set for him.