A sales manager has implemented a program for his salespeople that involves a meeting with each salesperson, during which the sales manager gives the salesperson the yearly quota for the salesperson's territory. The sales manager has missed the key concept in management by objectives, which is a. mutual goal setting between the sales manager and the salesperson. b. reducing the paperwork involved in the MBO process. c. documentation of the sales quota in the salesperson's personnel file. d. a mutual understanding of the punishment to be given if the salesperson does not meet the goal set by the sales manager. e. ensuring that the economy can support the sales quota assigned.

Management by objectives (MBO) is a management approach that is based on setting attainable goals for every member of the organization. These goals must be set together and agreed by the employee and his/her supervisor.

One of the main advantages of this approach is that it creates a more productive environment where all of the members of the organization know their goals and work towards achieving them. This approach allows no excuses, since the responsibility of setting the goals is shared between the manager and the employee.