Management by Objectives: What it is and How it’s done?


Management by objectives (MBO) is a management method that assigns specific, measurable goals to employees and then uses objective measurements to track progress. 

Through MBO, organizations can more effectively manage their resources and pinpoint areas where employees need further development. This article provides an overview of the concept and outlines the steps involved in applying MBO in an organization.

What Is Management By Objectives (MBO)

Management by objectives (MBO) is a management philosophy that encourages executives to set goals and objectives for their organizations and then measure the progress of those goals every quarter.

This helps executives to make informed decisions about how best to allocate resources and achieve company objectives.

Generally, MBO involves three steps: goal setting, achievement measurement, and redesigning or adjusting goals as needed.

Goals should be specific, measurable, attainable, relevant, time-bound, and achievable within the current context and culture of the organization. 

Objectives should be reviewed on a regular basis to determine whether they still match these criteria. If not, they may need to be revised or eliminated altogether. 

Benefits Management By Objectives (MBO)

Benefits management by objectives (MBO) is a process that helps organizations to identify and track the benefits of their actions and decisions. This helps them to ensure that their goals are being met and that they are getting the most out of their resources.

The main benefits of MBO include:

  • Improved decision-making: By tracking the benefits of every action, managers can make more informed decisions about what actions to take next. This allows them to avoid making mistakes and taking unnecessary risks, which can lead to higher productivity and better outcomes.
  • More efficient use of resources: With a clear understanding of what’s being achieved, managers can more efficiently use their resources in order to achieve their long-term objectives.This means that they don’t have to waste time on activities that don’t have a positive impact on the organization’s success.
  • Increased transparency and accountability: Because everything related to MBO is recorded and tracked, everyone involved in it is constantly aware of how their actions are affecting the organization as a whole. This makes it much easier for them to hold each other accountable — and make sure that everyone is working towards the same goals.

How To Implement Management By Objectives

1. Establish Goals

Setting goals is an important step in any personal or professional development, but it’s even more important when you’re working on objectives.

Objectives are a plan of action that you set for yourself with specific goals in mind. They provide a guide and a goalpost to help you stay on track while you’re working towards your long-term dreams and ambitions.

The best way to establish objectives is by thinking about what you want to achieve in the short, medium and long term. You can then use this information to create specific goals that will help you reach your objectives. 

2. Define Roles And Responsibilities

Managing by objectives (MBO) is a management system that allows organizations to achieve their objectives through the strategic allocation of resources to specific tasks.

The roles and responsibilities in an MBO system are as follows: 

  • The executive sponsor is responsible for setting the direction and objective of the organization and defining the roles and responsibilities of all stakeholders.
  • The resource manager is responsible for allocating resources to meet the objectives set by the executive sponsor.
  • The line manager is responsible for ensuring that each resource is allocated to the task necessary to achieve the objectives defined by the executive sponsor.

3. Monitor And Measure Progress

Objectives are a key part of any successful project or task. They help you stay focused on the task at hand and ensure that you’re making progress towards your goals.

There are several different types of objectives that can be used in progress management, but the two most commonly used are task objectives and goal objectives. 

Task objectives are specific tasks that need to be completed in order to make progress towards a goal. They should be specific, measurable, attainable, relevant, and time-constrained.

Goal objectives, on the other hand, should identify the overall goal that you’re trying to achieve and should also be vague enough so that it’s flexible and able to change as new information is discovered. 

Both task and goal objectives can be tracked using various tools like calendars or tracking sheets.

This will help you keep a close eye on your progress and track whether or not you’re achieving your goals. You can also adjust your objectives as needed in order to keep yourself on track for success.

Advantages Of Management By Objectives

There are a number of advantages to using management by objectives (MBO). These include:

  • It’s an effective way to set goals and measure progress.
  • It helps to clarify responsibilities and ensure that everyone is working towards the same goal.
  • It can help to motivate employees.
  • It provides clarity about what is expected of them, and makes it easier to identify any problems early on.
  • It helps to monitor performance and make changes where necessary.

Challenges Of Management By Objectives

Management by objectives (MBO) is a popular management philosophy that focuses on achieving specific objectives rather than managing people or resources.

It has been used in a number of different industries, including business, healthcare, education, and the military.

One of the main benefits of MBO is that it’s objective-based, which makes it easier to track progress and make decisions.

This type of management also allows for greater flexibility and adaptability because goals can be changed as needed without having to change the entire approach to management. 

However, there are a few challenges that must be addressed when using MBO: 

  • It can be difficult to determine which objectives are most important.
  • It can be difficult to measure whether or not objectives have been achieved.
  • It can be difficult to decide when changes in objectives are necessary.


As you can see, management by objectives is a very simple yet effective management style. All it takes to implement this excellent strategy is a clear understanding of your goals and business environment as well as the right talent in place.

Now that managing objectives has been explained, what do you say? Are you ready to adopt this fresh method?



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