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CSEET · Business Laws and Management · Introduction to Management

Management by Objectives (MBO), popularised by Peter Drucker, is best described as a process in which:

MBO is a process where superiors and subordinates jointly set objectives, define each person's key result areas, and then review performance against those agreed objectives. Its distinguishing feature is participation in goal setting, not targets imposed from the top.

  1. ASuperiors and subordinates jointly set objectives, and performance is reviewed against themCorrect
  2. BThe top management alone fixes targets and communicates them downward
  3. CEmployees are paid only according to seniority
  4. DObjectives are kept informal and never measured

Explanation

MBO rests on participative goal setting: managers and subordinates agree on objectives, define responsibilities in terms of expected results, and use these for periodic review. Option B describes top-down target setting, which is the opposite of MBO's participative nature.

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