Balance stress on objectives. MBO forces managers to set objectives with balanced stress on key result areas. Thus, crisis conditions are avoided to take place in the organization.
Better managing. MBO forces managers to think about planning for results, rather than merely planning activities or work. Managers are required to ensure that the targets are realistic and needed resources are made available to subordinates to achieve the targets. Clearly set objectives for the subordinates serve as evaluation standards as well as motivators for them. Thus. MBO results in improvement in managing.
Better organizing. The positions in the enterprise can be built around the key result areas. Managers are required to clarify organizational roles and structures. Hence better organizing.
Greater employee involvement & commitment. If MBO program is installed in an organization, people are not just doing work, following instructions and waiting for guidance and decisions form above and things are not dictated by the superiors. They are now individuals with clearly defined goals which have been formalized through their own participation in the process.
Orderly growth of organization. MOB provides for the maintenance and orderly growth of organization by means of predetermined set of objectives for everyone involved. It also provides for measurement of what is actually achieved. The progress and even the tenure of management by objectives emphasizes the ability, skill and achievement of managers rather than their personality. Thus, the orderly growth and development of the organization is ensured.
Development of effective controls. MBO not only sharpens the planning, but also develops effective controls. It specifically provides for periodic reviews and annual performance appraisals serving as the needed feedback for further streamlining the objectives or targets. It makes possible for a manager to control his own performance, high deg4ree of self control resulting in stronger motivation.
Generating of an ideal atmosphere. Doughlas mcGregor says, the motivation, the potential for development, the capacity for assuming responsibility, the readiness to Direct behavior toward organization goals are all present in people. Management does not put them there. The essential task of management is to arrange organizational conditions and methods of operation .
Management by objectives provides a scientific basis for evaluating a subordinate’s performance because goals (standards) are jointly set by the superior and the subordinates.