- Goal-oriented: MBO is goal-oriented rather than work-oriented as it focuses on what must be accomplished rather than on how it is to be accomplished.
- Participation of all: It involves the participation of subordinate managers in the goal-setting process. It requires all key personnel to contribute the maximum to achieve the overall objectives.
- Focuses on KRAs: MBO focuses on measurable and verifiable goals in the key result areas. It helps to balance the goals of all the key personnel.
- Dynamic: MBO is a dynamic system which integrates company’s needs to achieve the objective.
- Managerial philosophy: Management by Objectives is a managerial philosophy and not just a simple technique or method. Because a philosophy directs and influences every element of management, whereas a technique is only useful in certain areas. MBO is an approach involving different techniques to more finest management.
- Serve as a criterion: To evaluate the complete performance of the organization, corporate, functional and personal goals under Management by Objectives serve as a criterion. Managers will be able to assess the efficiency of subordinates through the comparison of goals and actual results, and in some ways, the top level can assess the efficiency of other managers too.
- Continuous process: MBO is a continuous process of goal setting, periodic appraisals and modification of goals and performance.
Management by Objectives (MBO) | Meaning, Objectives, Features, Advantages and Limitations