The concept of management by objectives Management by Objectives...

Management by Objectives Management Concept

One more old model - proposed by Peter Drucker (Peter Drucker) in 1954, the concept of "management by objectives" (Management by Objectives). Its essence lies in the fact that management as an integral management system is guided by the achievement of the totality of goals and tasks facing the organization. The goals and objectives of management are not only brought, but also are coordinated with managers of all levels who direct their efforts, resources and energy to achieve them. The basic principles of MBO are:

o in cascading organizational goals and tasks;

o highlighting a specific task for each artist;

o staff participation in decision-making;

o defining time periods for tasks;

o Performance evaluation and feedback.

The concept MBO also proposed the method SMART, for which all tasks should be specific, measurable (Measurable), achievable (Acheivable), realistic (Realistic) and time-limited.

According to Drucker, managers should avoid the "activity traps" when they are so involved in daily activities that they forget their main goals and objectives. One of the ideas МВО is that not only top managers, but managers of lower positions in the hierarchy should be involved in the strategic planning process, as well as the implementation of initiatives, aimed at improving the efficiency of the organization.

However, in comparison with the Norton and Kaplan NSP concept, the MVO model does not assume the same voluminous analysis of the company's activity and the identification of cause-effect relationships between individual indicators. In addition, the model is based on the extremely clear identification and formalization of tasks and is not adapted to the dynamics inherent in modern business. Actually, in the 1990's. Peter Drucker himself spoke about the concept of MBO as follows: "This is just another tool, and not a super effective tool for inefficient management. Task management works if tasks are known, and in 90% of cases they are not known. " Thus, this model can be considered as a precursor of modern concepts of the BSC.

Analysis of the comparative effectiveness of existing balanced scorecards

The choice of the MTS model for implementation, of course, should be based on the needs and capabilities of each company, taking into account the already existing infrastructure, business environment and corporate culture.

However, the following parameters can be used as criteria for estimating the expected efficiency of a particular model:

o control object (what exactly does the model allow to control);

o management capacity (how the model allows management to monitor the company's activities and achieve the strategic goals);

o the complexity (what efforts will be required to implement the model, how complex the model is for all participants, how great the changes are in the usual way of doing things);

o staff involvement (how deeply the model is plunged into the company's activities, how many people will be involved in the work on the "new rules");

o predictive power (does the model give managers the ability to evaluate the company's prospects and with what accuracy and certainty);

o stability (how stable is the model to manipulation, error).

A comparative analysis of existing balanced scorecards based on selected criteria is given in Table. 12.2-12.8.

Table 12.2. Norton-Kaplan Balanced Scorecard

The Norton-Kaplan Balanced Scorecard System

Table 12.3. Cost-Based Management VBM

Management based on VBM cost

Table 12.4. Rampersad's Universal Performance Indicator

The universal system of performance indicators of the Rampersad

Table 12.5. Models with a high degree of complexity (Meisel's balanced scorecard, MacNair's efficiency pyramid, EP2M Adams and Roberts model)

Models with a high degree of complexity (Meisel's balanced scorecard, MacNair's efficiency pyramid, the ER2M Adams and Roberts model)

Table 12.6. Model Stakeholder


Table 12.7. Model Tableau de Bord ( Control Panel )

Model Tableau de Bord (

Table 12.8. Management by Objectives Management Concept (MBO)

Management by Objectives Management Concept

Any system of indicators, based on the idea of ​​a balance, allows top managers of companies to determine what results are achieved, what factors play a decisive role, and also respond in a timely manner to signals of significant deviations in the results achieved from the planned ones.

From this point of view, for the average United States company, the most acceptable model is the model proposed in the early 1990s. American professors D. Norton and R. Kaplan. It enables the greatest coverage of various aspects of business, has a fairly high resistance to manipulation and error. In a sense, this approach is the golden mean between technologies and the resources, infrastructure and corporate culture that United States companies have today.

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