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Management by Objectives for small businesses

Date: 08/17/2006 | Category: Business | Author: arvind

Peter Drucker, the legendary management consultant propagated the principle of management by objectives during early 50’s. Stated simply, management by objectives or MBO, means the organization should be objective oriented and not activity oriented. In other words, MBO ensures that all the people in the organization are aware of organizational objectives and have aligned their personal objectives with the larger organizational goals. 

Can this high sounding management principle be applied to small business? Answer is a mixture of yes and no. First thing to be remembered is that all the people in the firm must be ‘literate’ enough to understand this principle. Secondly, they should be empowered sufficiently to act on tasks in order to achieve the organizational objectives. 

MBO shouldn’t be blindly implemented applied without creating sufficient knowledge of the principle and assessing the risks involved in the process. It can start at the top with small business owner getting himself involved in this process and then let it trickle it down the line in the hierarchy.

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