The material is based primarily on Deming's theory of management. The Taylor method and the Deming method. This is the method is predominant in American companies, and was started by a mechanical engineer named Charles Taylor. His ideas have since been extended to form the core of the management philosophy of most American corporations. In an MBO company, the purpose of that company is to make a profit.
Management sets goals in order to attain a profit goal.
Employees are rewarded if they meet goals set by management and are punished if they fail to meet the goals. Another way this method can work is to have employees compete with each other. Management would lock their doors and spend figuring out the rankings. Later the lower ranking engineers would be the first to get laid off in cutbacks. This competition model can be applied to one division versus another.