Q.Explain, step by step, the process of Management by Objectives.

MBO is best understood as a repeating cycle that starts at the top of the organisation and cascades all the way down to the individual employee, then loops back again.

1. Setting overall organisational objectives — top management first decides the broad objectives for the organisation as a whole for the coming period.

2. Cascading into individual/departmental objectives — these are broken down into specific objectives at each department and individual level, agreed through joint discussion between each superior and subordinate.

3. Matching objectives with resources — the manpower, budget, and other resources needed to achieve each set of objectives are identified and allocated, so targets are realistic.

4. Action planning — each individual/department prepares a specific plan of the activities and timetable needed to reach their agreed objectives.

5. Implementation — the plans are actually carried out.

6. Periodic review of performance — progress is checked at fixed intervals during the period, and problems are addressed while there is still time to act.

7. Appraising overall performance — at the end of the period, actual achievement is compared against the originally agreed objectives; this appraisal feeds directly into setting the objectives for the NEXT cycle, making MBO a continuous, repeating process.

Describing MBO as a one-time, linear process ending at final appraisal, rather than as a cycle whose end-of-period appraisal directly feeds into setting the NEXT period's objectives.