Editing Management by objectives (section)

== Application in practice ==
There are endless ways to exercise management by objectives. One must find specific goals to aim for in an organization or business. Many noteworthy companies have used MBO. The management at the computer company [[Hewlett-Packard]] (HP) has said that it considers the policy a huge component of its success. Many other corporations praise the effectiveness of MBO, including [[Xerox]], [[DuPont]], [[Intel]],<ref>{{cite web|url=https://gtmhub.com/blog/2016/09/14/masterclass-in-mission-statement-from-gordon-moore-co-founder-intel-corporation/|title=Masterclass on Mission Statement from Gordon Moore, co-founder, Intel Corporation > Gtmhub team blog|date=14 September 2016}}</ref> and countless others.<ref>{{Cite web|url=https://smallbusiness.chron.com/examples-managerial-objectives-23790.html|title=Examples of Managerial Objectives|website=Small Business - Chron.com}}</ref> Companies that adopt MBO often report greater sales rates and productiveness within the organization. Objectives can be set in all domains of activities, such as production, marketing, services, sales, R&D, human resources, finance, and information systems. Some objectives are collective, and some can be goals for each worker. Both make the task at hand seem attainable and enable the workers to visualize what needs to be done and how.

In the MBO paradigm, managers determine the enterprise's mission and [[Strategic planning|strategic goals]]. The goals set by top-level managers are based on an analysis of what can and should be accomplished by the organization within a specific period of time. The functions of these managers can be centralized by appointing a project manager who can monitor and control the activities of the various departments.<ref>{{Cite web |last=Raj |first=Ritu |date=October 24, 2012 |title=The Concept Of Management By Objectives |url=http://rituinc.com/the-concept-of-management-by-objectives/ |url-status=dead |archive-url=https://web.archive.org/web/20180801201032/http://rituinc.com/the-concept-of-management-by-objectives/ |archive-date=August 1, 2018 |website=Ritu, Inc.}}</ref> If this cannot be done or is not desirable, each manager's contributions to the organizational goal should be clearly spelled out.<ref>{{Cite web|url=https://www.researchgate.net/publication/282450672|title=Multi-objective Optimization Tool for Integrated Groundwater Management (PDF Download Available)}}</ref>

In many large Japanese corporations, beginning in the late 1990s, MBO was used as the basis of "the performance-based merit system” (seika-shugi) which used clear numerical targets to measure performance in contrast to the previous system of non-specific contracts in Japanese companies.<ref>{{Cite journal |last=Gagne |first=Nana Okura |date=2017-10-06|title="Correcting Capitalism": Changing Metrics and Meanings of Work among Japanese Employees |journal=Journal of Contemporary Asia |volume=48 |issue=1 |pages=67–87 |doi=10.1080/00472336.2017.1381984|s2cid=158161722 |doi-access=free }}</ref>

Objectives need quantifying and [[surveillance|monitoring]]. Reliable [[management information systems]] are needed to establish relevant objectives and monitor their "reach ratio" in an objective way.<ref>{{cite journal|url=http://ycxb.tobacco.org.cn/EN/abstract/abstract863.shtml|title=基于动态平均数的烟草企业目标管理|journal=中国烟草学报|volume=21|issue=3|doi=10.16472/j.chinatobacco.2014.457|access-date=2016-04-13|archive-url=https://web.archive.org/web/20180213200117/http://ycxb.tobacco.org.cn/EN/abstract/abstract863.shtml|archive-date=2018-02-13|url-status=dead}}</ref> Pay [[incentive]]s (bonuses) are often linked to results in reaching the objectives.

The mnemonic [[SMART criteria|S.M.A.R.T.]] is associated with the process of setting objectives in this paradigm. 'SMART' objectives are:
* ''Specific'': Target a specific area for improvement
* ''Measurable'': Quantify or suggest an indicator of progress
* ''Assignable'': Specify who will do it
* ''Realistic'': State what results can realistically be achieved, given available resources
* ''Time-bound'': Specify when the result(s) can be achieved<ref>S.M.A.R.T. Goals" November 1981 issue of American Management Association Review by Ph.D. George T. Doran</ref>
The aphorism "''what gets measured gets done''" is aligned with the MBO philosophy.