6 main Steps in Management by Objectives by George Odiorne

George Odiorne, gives the following steps of MBO:

1) Business management takes place within an economic system that provides the environmental situation, for the individual firm. The environment which has changed drastically over the past 30 years imposes new requirements on companies and on individual managers.

2) MBO is a way of management aimed at meeting these new requirements. It presumes that the first step in management is to identify; by one means or other, the goals of the organisation. All other management methods and sub-systems follow this preliminary step.


3) Once organisational goals have been identified; orderly procedures for distributing responsibilities among individual managers are set up in such a way that their combined efforts are directed towards achieving these goals.

4) MBO assumes that managerial behaviour is more important than managers personality, and that this behaviour should be defined in terms of results measured against established goals, rather than in terms of common goals for all managers or common methods of managing.

5) It also presumes that while participation is highly desirable in goal-setting and decision making, its principal merit lies in its social and political values rather than in its effects on production, though even here it may have a favourable impact and in any case seldom hurts.

6) It regards successful manager as a manager of situations, most of which are best defined by identifying the purpose of the organisation and the managerial behaviour best calculated to achieve that purpose. This means management behaviour is discriminatory, being related to specific goals and shaped by the larger economic system within which it operates”.