Definition of Management

Peter Drucker who first used this concept defined it as “management by objectives tells a manager what he ought to do. The proper organization of his job enables him to do it. It is the spirit of the organization that determines whether he will do it”.

JW Humble an authority on this system says that, “management by objectives stands for a style of management which seeks to integrate logical business planning with a creative use of human beings. It is a demanding and rewarding style of managing a business’.

Georg Ordiorne another authority on MBO defines this, “in brief the system of management by objectives can be described as process whereby the superior and subordinate managers of organisation jointly identify its common goals, define each individual’s major areas of responsibility in terms of the result expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members”.


Using this system a manager is allowed freedom to achieve the objectives of the organisation. Each department is allowed to set its objectives to achieve the total objectives of the organisation. Greater freedom and interdependence among various departments is allowed.

Drucker explains this function as, “business performance therefore requires that each job be directed towards the objective of the whole business. And in particular each manager’s job must be focused on the success of die whole.

The performance that is expected of the manager must know and understand what the business goals demand of him in terms of performance, and his superior must know what contribution to demand and expect of him and must judge him accordingly. If these requirements are not met, managers are misdirected. Their efforts are wasted. Instead of team work there is friction, frustration and conflict”.