MBO sets direction to performance, profit
SUCCESS is a relative term, which differs with various perceptions. How then do we determine the success of an organisation? One would usually assess the market conditions and assess the position an organisation occupies to determine its success or otherwise. Profit level is another parameter indicative of an organisation's status. These however are an outsider's perceptions.
The views of one from within the organisation would differ from that of an outsider. His evaluation would depend significantly on the objectives that the company had set at the inception stages. Fulfillment of those parameters signifies its success.
This variation in perceptions can be attributed to the knowledge about set aims since their fulfillment virtually alters one's stricture of success. Thus, setting of objectives plays a vital role in an organisation's success.
In this context, the approach of Management by Objectives (MBO) has gained momentum. Today, every organisation eyes goals that help develop strategies to attain them. It works on the determined path and finally, strives to ascertain that these aims are achieved. This has become the general process of progressing to the next level.
How does the MBO process benefit a company?
Firstly, the MBO process enables the organisation to think regarding setting goals with definite objectives. Half the river is crossed, once you have a clear understanding of your aims. It makes you confident about the path you are likely to tread. A sense of direction is established.
The performance of your organisation gains momentum, as you strive to establish ways to realise the objectives set. Individual and collective performances are drawn up against these objectives and comparisons made. Deviations from the planned path, if any, can be identified and rectified immediately.
The process enables Role Identification. Each employee is reminded of the role he has to play. The result is a charged atmosphere, which exudes positive energy and total commitment.
It impacts a sense of self-evaluation among employees. Each individual, however minor his role might be is a contributor to the efficient functioning of an organisation. When all employees undergo a self-assessment, at regular intervals, it promotes their betterment and reflects in the overall performance of the organisation.
The process encourages involvement of subordinate employees, in company major decisions and thus its achievement. Consequently there is co-ordination and co-operation among employees. Resistance and abrasion is overcome.
The biggest advantage to a company implementing the MBO process is the motivation and the drive to move ahead. Achievement of set objectives act as an impetus, when a company looks towards moving ahead and setting further acts objectives.
MBO is in short a sure-shot way to strengthen and increase your organisation's competence, rendering it competitive. Eventually it is able to create its own niche, name and space.
PREETI RAGHUNATH
faqs@cnkonline.com
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