Management By Objectives (MBO) (What Is, Reasons, Elements, Advantages)

The Management By Objectives (DBO) refers to the technique to pass the important objectives of the company, which involved all those who make up the company’s strategic and operational level for specific targets various misting.

It can also be said that the management by objectives consists of classifying the strategic objectives of the company, from the hierarchical level, which indicates to each of the levels the specific objectives and thus can meet the general objectives.

Once the objectives have been distributed, each of the members of the company executes an action plan in conjunction with the general objectives. These members, in the company of their superiors, will define their responsibilities and carry out the necessary measures to manage their unit, this being their contribution to the company and it will be evaluated later.

Principles of Management by Objectives

Management by objectives comprises a series of principles such as the following:

  • Those who are at a higher level with their collaborators, are in the duty to define by agreement, what will be the specific objectives to be achieved, if possible with a date set.
  • Employees who are also involved and committed must be motivated to do their jobs efficiently.
  • It is necessary to constantly monitor the progress and goals achieved, to verify if the stated objectives are met.
  • As the goals are met, they will be well rewarded.
  • An efficient result will be recognized if you have met the objective set.

Phases of Management by Objectives

Management by objectives is mostly applied in a limited way, this is because it is the means that help managers to develop professionally. Despite this, objective management has broader approaches, therefore, it needs to be applied throughout the company comprehensively.

Regardless of how management by objectives is applied in the company, there are general modalities such as the following:


Both the manager and subordinates must determine results on specific dates.


When workers are motivated, they tend to be more committed to goals.


The results are measured through the established objectives.

Reasons to implement Management by Objectives

There are several reasons for implementing objective management:

  • Apply various types of objectives with or without a variety of payment and globally, departmentally, or individually.
  • It handles the procedure in a short time and easily.
  • Indicates various levels of compliance.
  • Modify the goal setting and review process digitally and in a simplified way.
  • It can manage different companies or departments.
  • You can transform or eliminate procedural errors.

Functionalities that comprise Management by Objectives

Among its functions, the following can be mentioned:

  • The most important function of objective management is that it can achieve optimal planning and efficient management system performance.
  • This system has a mastery of what to do, knows what the necessary resources are, and avoids the risks, all this allows the work to be carried out efficiently.
  • By knowing the goal to be achieved, it is easier to apply authority, since the intervention of superiors is not necessary, thus allowing better relationships and more efficient participation.
  • The management by objectives can direct efficiently, it stimulates the managerial advance so that its participation in the objectives and the activities to be achieved is possible.

Elements of Management by Objectives

This system is fundamental for the development of the company, therefore, it is used to make the objective reality and allows an efficient direction that leads towards the objectives that help to achieve the established goals. For this, the following elements must be taken into account:

  • Objectives: These must be clear, precise, and must be communicated correctly.
  • Participation: During the process of assigning objectives to the workers, the company expects its best participation from them so that the goals are achieved.
  • Evaluation: This is obtained from the performance and the results related to the monitoring of the objectives.

Advantages of Management by Objectives

The advantages of objective management can be classified in three ways:

Advantages for the company

  • The participants are clear about the objectives that each one must fulfill.
  • The level of motivation increases and the work environment is harmonized.
  • There is much more integration between the participants of the company.
  • Motivate teamwork.

Advantages for management

  • Includes all company workers to participate responsibly in the development and achievement of objectives.
  • All work teams strive to achieve their performance at the same level.
  • Communication is fluid and productive between the manager and his workers since the opinions related to the goals to be achieved are taken into account.
  • The evaluation of the workers is objective due to the sequence of the objectives and not to the work done.

Advantages for employees

  • By being informed of the results they want to achieve, workers take responsibility for what they must do.
  • In order to achieve the established objectives, they have the freedom to choose how to work and they give importance to how they want to achieve the objectives.
  • Their work is objectively evaluated, as it is determined through the achievements obtained.
  • With a constant performance evaluation, you can know how professional development is progressing.

This management system previously focuses on achieving the objectives set, therefore, it is very important that all company personnel are always kept informed of what the objectives are and in this way efficiently carry out the activities to achieve said objectives and in turn achieve the success of the company’s projects.

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Ahmed Ismail

I'm a Civil Engineer. I like reading everything related to Business so I decided to launch the "Fast Grow Company" website to help Entrepreneurs in their business journey. Keep updated and follow us.

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