Performance of a given department or division is measured quantitatively by a few metrics/objectives. Managers are encouraged to manage to a target and success and failure is determined by whether they hit that objective 1. The overall theory is that by improving the key metrics, the progress and success is assured.
Created by Drucker2.
References
1.
DeMarco, T. Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency. (Currency, 2002).
2.
Hayes, A. Management by Objectives (MBO). Investopedia at https://www.investopedia.com/terms/m/management-by-objectives.asp.