Management by Objectives (MBO) is a "synergetic approach to organizational management" which "emphasizes the importance of a supervisor and employee working together in order to craft individual goals (Stanley 2004, 9)." George Odiorne is one of the theorists most closely associated, along with Peter Drucker, with the popularization of MBO (Bearn 1996, 74). Beginning in the early 1960s, MBO became one of the hottest topics in management development, spurred by the efforts of Odiorne and Drucker, both of whom believed that the application of MBO principles to public and private sector organizations would bring about accountability, improve productivity and profitability, and facilitate strategic planning leading to a proper allocation of resources of all kinds.
In the literature on management science, Paul Romani (1997, 6) states that there are "few concepts as frequently mentioned and, simultaneously, as widely misunderstood as MBO." Indeed, even the apparent "inventory" of the term is misidentified more often than not. Most people give credit to either Peter Drucker or George Odiorne. However, the term was actually coined for the first time by Alfred P. Sloan in the early 1950s. Drucker's primary contribution was to place the term in a central position and to flesh it out by emphasizing the results of managerial actions as opposed to the supervision of activities. Odiorne added to this significantly in later publications.
This essay will draw upon the literature to consider the history, contents, the strengths and weaknesses, and the successes and failures of MBO.
"MBO was one of the popular buzzwords that sprang up in the early 1970s to provide a solution to the adverse relationship that existed between management and employees in many U.S. firms. Based on practical solutions and real-world common sense, MBO is simply a technique for facilitating communication between management and employees on company obj...