What is the Difference Between MBO and MBE?
🆚 Go to Comparative Table 🆚The main difference between Management by Objectives (MBO) and Management by Exception (MBE) lies in their approach and focus. Here are the key differences between the two management styles:
Management by Objectives (MBO):
- Proactive management approach that focuses on setting and achieving specific, measurable goals for the organization.
- Involves setting specific, measurable, achievable, relevant, and time-bound objectives for individuals and teams within an organization.
- Aims to align the goals of the organization with those of its employees, increasing motivation and productivity.
- Requires active participation from employees in decision-making processes.
- Reduces dependency on one group or department, as operations are handled organization-wide.
Management by Exception (MBE):
- Reactive management approach that focuses on identifying and addressing exceptions or deviations from established standards or goals.
- Involves monitoring performance and taking action only when deviations from expected performance are identified.
- Aims to address issues or exceptions that deviate from expected performance.
- Minimal employee participation in decision-making processes.
- High dependency on one department, especially for financial analysis and accounting, as they are responsible for budgeting, monitoring, and communicating significant deviations.
In summary, MBO is a proactive approach that emphasizes goal-setting and collaboration, while MBE is a reactive approach that focuses on identifying and addressing problems or inefficiencies.
Comparative Table: MBO vs MBE
The main difference between Management by Objectives (MBO) and Management by Exception (MBE) lies in the level of employee participation and the approach to management. Here is a table comparing the two models:
| Basis for Comparison | MBO | MBE |
|---|---|---|
| Full Form | Management by Objectives | Management by Exception |
| Employee Participation | High | Low |
| Decision Making | Employees actively participate | Employees have minimal participation |
| Responsibility Ambiguity | No ambiguity, responsibilities are clearly assigned | Responsibility ambiguity exists |
| Approach | Proactive, focused on setting and achieving goals | Reactive, focused on identifying and addressing significant deviations from expected performance |
| Monitoring | Managers actively monitor progress toward objectives | Managers monitor deviations from expected performance |
| Intervention | Managers intervene to support and guide employees toward achieving objectives | Managers intervene to address significant deviations from expected performance |
In MBO, employees are highly involved in the management process, participating in decision-making and taking responsibility for their assigned goals. On the other hand, MBE is a more reactive approach, where managers focus on addressing significant deviations from expected performance and take action to correct them.