Classic Management


Management by Objectives (MBO)




Peter Drucker management quotes

Setting Objectives




You must ensure that you set the right objectives if you want to achieve the right results.

In Management by Objective (MBO) systems, objectives are written down for each level of the organization, and individuals are given specific aims and targets.

  Management by Objectives (MBO): 5-Step Process, 3 Basic Parts


Peter Drucker management quotes

MBO works if you know the objectives,
90% of the time you don't.




Managers need to identify and set objectives both for themselves, their units, and their organizations.

Ensure that you set the right objectives if you want to achieve the right results.

The objectives should be achievable and challenging. Never set your staff unachievable targets it will be demoralizing for them.





Peter Drucker management quotes

Plans are only good intentions unless they immediately degenerate into hard work.




Peter Drucker management quotes

Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.





8 Key Result Areas

Where Managers Must Pursue Clear Objectives

  1. Marketing

  2. Innovation

  3. Human organization

  4. Financial resources

  5. Physical resources

  6. Productivity

  7. Social responsibility

  8. Profit requirements

Management by Objectives (MBO)

3 Basic Parts    Individual Responsibility    Examples

Start with Yourself  >> Increase Performance

Balance Between Management and Employee Empowerment

Traditional Managerial Tasks

Setting Objectives

Motivating and Communicating

Corporate Vision, Mission, and Goals

Creating a Company Vision    Stretch Goals

Managing for Results

8 Perceptions    Results-Based Leadership    Strategic Alignment

Coaching: GROW Model



1. Management: Tasks, Responsibilities, Practices, Petrer Drucker

2. The Effective Executive, Peter Drucker

3. Managing for Results, Peter Drucker

4. Essential Manager's Manual, Robert Heller and Tim Hindle

"The principle behind this is to ensure that people know what the organization is trying to achieve, what their part of the organization must do to meet those aims, and how, as individuals, they are expected to help. This presupposes that organization's programs and methods have been fully considered. If they have not, start by constructing team objectives and ask team members to share in the process," writes Robert Heller.4

"The one thing an MBO system should provide is focus", says Andy Grove who ardently practiced MBO at Intel. So, have your objectives precise and keep their number small. Most people disobey this rule, try to focus  on everything, and end up with no focus at all.

For MBO to be effective, individual managers and team leaders must understand the specific objectives of their job and how those objectives fit in with the overall company objectives set by the board of directors. "A manager's job should be based on a task to be performed in order to attain the company's objectives... the manager should be directed and controlled by the objectives of performance rather than by his boss," writes Peter Drucker.1

The managers of the various units or sub-units, or sections of an organization should know not only the objectives of their unit but should also actively participate in setting these objectives and make responsibility for them.

The review mechanism enables corporate leaders to measure the performance of their managers, especially in the key result areas: marketing; innovation; human organization; financial resources; physical resources; productivity; social responsibility; and profit requirements.

 However, in recent years opinion has moved away from the idea of placing managers into a formal, rigid system of objectives. Today, when maximum flexibility is essential, achieving the objective rightly is more important... More