Question

how would you define the managerial approach known as management by objectives or MBO? What is its appeal to businesses?

Answer 1

Management by objectives means where departments and their teams performances are driven and managed by setting the goals and performances measures.

Managers firstly participate in setting the goals for their own departments and then tries hard to achieve them .All goals are described in financial terms and quantified so that these can be measured and evaluated.All goals are time bound also.

Responsibility accounting system is designed by the marginal accountants to evaluate performance in achieving the goals and incentives are paid to subunits managers when goal are met.