CMA Foundation · Fundamentals of Business Economics and Management · Planning, Organizing, Staffing and Leading
Sundaram Textiles introduces MBO. The production manager and his superior jointly agree that rejects will be cut to 2% of output within the year. Which feature of MBO does this best illustrate?
This illustrates participative goal setting with measurable targets. The manager and superior agree jointly on a specific, quantified and time-bound objective, a 2% reject rate within a year. That joint, measurable setting is the core of MBO, unlike a unilateral command or a vague goal.
- AUnilateral top-down command
- BParticipative goal setting with measurable targetsCorrect
- CReliance on informal communication only
- DElimination of performance review
Explanation
The target is agreed jointly (participation) and stated numerically (2% rejects, one year), which makes it measurable and time-bound. A top-down command would lack joint agreement. MBO does not remove review; it relies on periodic review.
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