Which statement best describes Management by Objectives?

Which statement best describes Management by Objectives?

• A. A system where managers and employees set specific, measurable goals together.
• B. A method of budgeting focusing on expenses.
• C. A theory about intrinsic motivation.
• D. A process for evaluating event schedules.

Answer: (A)

Management by Objectives centers on a collaborative process in which managers and employees jointly set clear, specific, and measurable goals. By defining those goals together, everyone understands what success looks like and how progress will be tracked. The strength of this approach is the alignment it creates between individual work and the organization’s broader aims, plus ongoing feedback, action planning, and a formal review that ties performance to outcomes. When goals are measurable and time-framed, progress is visible, accountability is clearer, and motivation can grow as people see how their contributions contribute to results.

This approach is not primarily about budgeting or controlling expenses, so it isn’t described as a method for budgeting focusing on costs. It also isn’t a theory about intrinsic motivation, since its core emphasis is on goal setting, monitoring, and evaluation through a shared process. Nor is it a process for evaluating event schedules; instead, it’s about defining and pursuing outcomes that matter to the organization as a whole.