Do you MBA or MBO?

In my management training programme, I trained the management students about MBA and MBO. The former stands for Management By Activity and the latter Management By Objectives.

Typically, Japanese companies practise more of MBA but the American counterparts MBO. At the workplace, if the boss is very particular about his staff being at the desk physically 8.8 hours a day and always keeping an eye on their movement, but not so concerned about whether objectives are being met in an efficient manner, then this boss is practising MBA. On the other hand, if the boss tells you, "John, get this report done by 4pm and have it circulated to all the members of the Management Committee before 5pm today, and then you can call it a day!". This boss most likely is a result-oriented person. He is practising MBO.

In MBA situations, many staff would adjust and adapt to the management style of the boss, and hence would usually play along with the boss by taking things easy, doing their own things and when the boss is around, would pretend to keep themselves very busy with non-essential activities that do not yield positive results. This inevitably encourages inefficiency at work.

In MBO scenarios, the staff would be managed and measured by the results of their work, whether or not they complete their work within the stipulated requirements and deadline. So, the staff would be very much encouraged to perform quality work at the shortest possible time. Any excess time available as a result of their work efficiency would be at their own disposal. This would obviously motivate the staff to be more efficient at work. The boss is concerned about the end result and whether the objectives have been achieved. MBO promotes self-motivation and self-discipline of the staff.