Management by Objective, or MBO, is a strategic approach to accomplishing the organization’s objectives. By laying out the company’s objectives and strategy in detail, MBO aims to increase performance. Both management and the staff members who actually work on them agree on the objectives and the strategies.
Peter Drucker, a management guru, originally defined the term in his 1954 book The Practice of Management. The idea is that giving employees a vote in goal-setting and action plans promotes employee engagement and commitment and helps the firm as a whole align its goals. It was primarily created to compare actual performance to the goals that were clearly stated prior to any actions being taken.
