The role of theory in academic work and in the business arena is vital. This assertion will be examined by looking at Management by Objectives and its application in both research and the workplace. 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 9)." George Odiorne is one of the theorists most closely associated, along with Peter Drucker, with the popularization of MBO (Bearn 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.
Conceptually, according to Marlow and Schilhavy (30), MBO is the ultimate in participative management, since a subordinate can help establish personal objectives for their job, help determine the measurements used in evaluating performance, and receive constant feedback on progress. On the surface MBO restates the obvious. The major selling point of any MBO program is improved performance. Organizations become interested in MBO because potentially large increases in organizational performance may be realized for little additional cost.
Academically, research that tests the actual use of MBO in organizations is quit valuable. In the workplace, however, it can be more difficult to determine of MBO in its theoretical form is at work. Romani (7) stated that as is the case with most seemingly straightforward concepts, there have been cleavages between the ways that Drucker conceived MBO, the ways in which others have promulgated it, and the ways it is practiced. Romani (8) argue...