This is a procedure of defining and setting objectives within an organization. This is in order to ensure that both employers and employees agree on objectives and goals for the company. Within this process, employees set goals for themselves mainly based on the overall objectives and goals.

Management by objective uses a set of quantifiable or objective standards against which to measure the performance of a company and its employees. By comparing actual productivity to a given set of standards, managers can identify problem areas and improve efficiency. Both management and workers know and agree to these standards and their objectives.

Disadvantages of using MBO

As Management By Objective is entirely focused on goals and targets, it often ignores other parts of a company, such as the  following

• corporate culture
•  worker conduct
•  a healthy work ethos
• environmental issues
• areas for involvement and contribution to the community and social good.