Final answer:
Management by Objectives (MBO) is a performance improvement model where management and employees work together to set, measure, and review clear and attainable objectives. Advantages include increased motivation and improved alignment of goals, while disadvantages involve potential time-consuming processes and a possible focus on short-term objectives.
Step-by-step explanation:
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 process involves setting specific measurable goals that are realistic and attainable within a defined timeframe, and aligning them with the company's overall objectives. MBO includes periodic reviews of the employees' progress towards achieving these goals.
Advantages of MBO
- Increases employee motivation and commitment as they have clear, defined roles.
- Improves communication and aligns individual and organizational goals.
- Facilitates personal leadership development through participative management.
Disadvantages of MBO
- Can be time-consuming due to the need for frequent reviews and appraisals.
- May lead to short-term thinking as employees focus on reaching set objectives over long-term vision.
- If not implemented well, can result in goal displacement where the means becomes more important than the end.