Why Management by Objectives System in Companies is Beneficial

A Management by Objectives system focuses on feedback. It is move concerned with the results and outputs then the process itself. If the MBO system is properly implemented the it can be efficient, effective, and even powerful in the public agency. A well working Management by Objectives system has several advantages.

The main advantage if the MBO system is due to the fact that attention is shifted from process to results. This leads to information flows, planning and evaluations that are all focused on results. The managers decide what activities are the most important in the organization and put those on top of the list of things that have to be accomplished throughout the year. With frequent meetings between managers and employees, milestones, and deadlines everything gets accomplished on a much more organized way.

Management by Objectives improves communication in the organization. In other organizations, top administrators and their middle rank employees would rarely meet to discuss goals. In the MBO system, the downward flow of information is improved. With a clear list of the goals made by top managers, even down the ladder will know what has to be done.

It also improves the upward flow of information in the organization. In large organizations, it is said that bad news never flows up, or reaches top administrators. In the MBO system each milestone acts as a trip wire. If a milestone or goal is not met in time or not effectively and efficiently, warnings go to the top administrators. During the frequent meetings, these results are discussed. If something is not met to an administrators expectation, it will be made known during the meeting.

Another advantage is that the Management by Objectives system brings line managers into agency planning. Everyone in the agency knows what they are capable of doing and in what time period they are capable of doing it. Only they can actually make deadlines for themselves. In the MBO system, this is what they do. They get together and all decide what would be the best goals and deadlines that they can meet. Everyone feels much more comfortable in having confidence that goals will be met.

Management by Objectives makes personnel evaluations fairer. Because MBO systems establish goals for each individual group or division, it is easier to determine which unit failed and which unit succeeded. When a departmental goal is not completed within the given time period, it is simple to find out who is not doing their job properly.

Although MBO systems are not perfect, they do have many benefits. By shifting their focus to outputs and working in close affiliation between managers and employees, the system had succeeded in many ways.