What does management by objectives (MBO) involve?

Management by Objectives (MBO) is fundamentally a collaborative approach that emphasizes the joint effort of managers and employees in establishing specific and measurable objectives. This process aligns the individual goals of employees with the overall objectives of the organization, fostering a sense of ownership and commitment among team members.

In MBO, the interaction between managers and employees is critical. They work together to create clear, achievable goals, which encourages communication and feedback throughout the process. By agreeing on objectives, both parties can ensure a shared understanding of expectations, leading to improved motivation and enhanced performance. This approach also facilitates performance assessments, as progress can be measured against the agreed-upon objectives.

The other options do not effectively capture the essence of MBO. While performance reviews are a component of the overall process, MBO is not limited to that; it emphasizes goal-setting and alignment instead. Hierarchical decision-making processes are more top-down and do not encourage the same level of collaboration that MBO promotes. Furthermore, prioritizing immediate results over long-term goals runs counter to the strategic focus of MBO, which seeks to balance short-term achievements with sustainable growth and development.