Question: Â Â Which of the following is the first step in MBO?
A Â Â Â Â Â Organization’s overall objectives and strategies are formulated
B Â Â Â Â Unit managers collaboratively set specific objectives for their units with their managers
C Â Â Â Action plans are specified and agreed upon by managers and employees
DÂ Â Major objectives are allocated among divisional and departmental units
Answer:Â Â Organization’s overall objectives and strategies are formulated
| MBO Steps | Description | |
| 1 | Establish Organizational Objectives | ·       The organization’s overall objectives and strategies are formulated. |
| 2 | Cascade Objectives | ·       Major objectives are allocated among divisional and departmental units. |
| 3 | Set Department objectives | ·       Unit managers collaboratively set specific objectives for their units with their managers. |
| 4 | Define employee objectives | ·       Managers work with employees to set individual objectives that align with unit and organizational goals. |
| 5 | Monitor and measure progress | ·       Managers and employees track progress toward objectives through regular reviews. |
| 6 | Evaluate and provide feedback | ·       Performance is assessed and feedback is provided to improve future objectives. |
| 7 | Rewards and recognition | ·       Employees may be rewarded or recognized based on their achievement of objectives. |
| 8 | Adjust and reset objectives | ·       Objectives are adjusted or reset for the next performance cycle. |