Final answer:
Management by Objectives (MBO) is a strategic management model that aligns employees' goals with the organizational objectives to improve performance. It relies on SMART objectives, regular monitoring, and a participative approach contrasting with Theory X of management which involves close supervision. MBO relates more closely to Theory Y which considers employees as self-motivated and responsive to responsibilities.
Step-by-step explanation:
The concept of Management by Objectives (MBO) is a strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees. The focus of MBO is to enhance communication and understanding of goals between management and employees, enabling them to work with unity of purpose. In this approach, goals and objectives set are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
Under MBO, objectives are outlined in a clear, precise manner, and progress toward those objectives is regularly monitored and assessed. This framework ensures accountability, as employees are aware from the outset what is expected of them, and managers are able to track progress and provide feedback effectively. The MBO process encourages all employees to align their personal goals with the company's strategic goals, thereby fostering higher employee engagement and motivation.
In contrast to Douglas McGregor's Theory X approach, which views employees as inherently lazy and requiring strict supervision, MBO is more in line with Theory Y. Theory Y posits that employees are self-motivated and thrive on responsibility, aligning well with MBO's employee-inclusive goal-setting approach.