15. Mbo program.

MBO (management by objectives system) is a goal-setting technique. MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world largest companies.

In Peter Drucker’s book he emphasised that an organization and its staff must have clear goals. Each individual must understand the goals of the organisation and must make a contribution to them. It is also vital that the individual knows what his/her manager expects of him/her. He/she must know what sort of results he/she is expected to achieve.

The programme consists of several stages. First, the subordinate’s job is defined. The subordinate and his/her manager define the job separately. They also rank the tasks in order of importance. Both parties then meet and discuss the statements they have made in writing. They discuss their differences of opinion. In the end they both have a clearer idea of what the job involves.

At stage two, the subordinate and his/her manager examine each task. They try to decide how well or badly it’s being performed. Again, they do this evaluation separately. They meet and discuss their assessments. All being well, the manager will have the chance to praise the subordinate for some of his/her work. Both may point out areas where there are problems.

Developing objectives comes next. The subordinate and his/her manager try to develop goals which are challenging but realistic. The objectives probably spell out results that must be achieved. These will be dates by which the subordinate must achieve his/her goals.

The subordinate and the manager discuss the objectives and make plans for achieving them. The manager may have to help in some way, perhaps by providing more training for the subordinate or buying more modern machines.

Finally, the subordinate sets about achieving the goals. From time to time, the subordinate and the manager meet to discuss progress. It’s vital that the manager receives feedback from the subordinate on performance and achievements.

In conclusion I want to say that because people generally feel commited to achieving goals they set themselves, this approach ensures goal acceptance and helpes to increase profits while also improving employees morale.

16. The benefits of mbo for subordinates, managers and companies.

MBO is a management by objectives system which was first described by the American Peter Drukcer in 1954 in his book The practice of management. Since then, MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world largest companies.

In his book he emphasised that an organization and its staff must have clear goals. Each individual must understand the goals of the organisation and must make a contribution to them. It is also vital that the individual knows what his/her manager expects of him/her. He/she must know what sort of results he/she is expected to achieve.

There are many benefits of MBO. They can be separated into 3 groups: benefits for company, managers and subordinates.

For the company:

• MBO programme continually emphasizes what should be done in an organization to achieve organizational goals.

• Better coordination and communication within the enterprise as managers closer interact with employees. Hence

• Individuals think about the results for the company, that lead to

increase in efficiency, sales and profit

Next group of benefits is benefits for the managers:

• Clear system of assessment allows managers rely on performance results instead of the personal feelings.

• Staff feels more responsible, it means less motivation work for managers.

• Feel that they are respected by employees and they are needed

• Staff is ready to communicate as they know they will be heard by managers.

• So, existing feedback allows managers to be aware of the problems

• All these factors lead to easier organising of the work process.

For the subordinates:

• They are judged on results

• Have an opportunity to discuss the job and objectives.

• And they clearly see their role in the organisation and the tasks they must carry out

• So, they feel more responsible and motivated

• These factors contribute to creation of a comfortable and warm atmosphere in company.