THE BASIC THESIS OF MBO IS THAT ONE CAN CONCURRENTLY GAIN THE ADVANTAGES OF BOTH CENTRALIZATION AND DECENTRALIZATION. UNDER MBO, MAJOR GOALS OF AN ORGANIZATION ARE ESTABLISHED CENTRALLY AND THE ACTUAL ACHIEVEMENT OF GOALS IS LEFT TO DECENTRALIZED MANAGERS. A 'COACHING' MENTALITY IS INCORPORATED IN TO MBO, WHERE GOALS AND PERFORMANCE MEASURES ARE NOT AUTOCRATICALLY APPLIED BUT RATHER ESTABLISHED JOINTLY BY ALL RESPONSIBLE PARTICIPANTS. THE EFFECTIVENESS OF MANAGEMENT IS THEN EVALUATED BY COMPARING RESULTS TO ESTABLISHED GOALS. THE PROCESS OF MBO ENCOMPASSES SEVERAL COMPONENTS: (1) DIAGNOSING THE NEEDS AND CAPABILITIES OF AN ORGANIZATION; (2) EDUCATING ALL PARTICIPANTS ABOUT THE NATURE AND VALUE OF MBO; (3) SETTING OBJECTIVES IN A PARTICIPATORY FORMAT; (4) REVIEWING OBJECTIVES (FEEDBACK); (5) REVIEWING ACCOMPLISHMENTS BEFORE INITIATING THE NEXT CYCLE OF OBJECTIVES SETTING; AND (6) IMPROVING PLANNING CONTROL AND EVALUATION MECHANISMS. WITH REGARD TO THE COURT SYSTEM, MBO REPRESENTS A FLEXIBLE APPROACH TO JUDICIAL MALADIES. INSTEAD OF REQUIRING THAT CENTRALIZATION BE A PREREQUISITE FOR REFORM, MBO PROVIDES THEORETICAL FRAMEWORK FOR MIXING COMPONENTS OF CENTRALIZATION AND DECENTRALIZATION IN ORDER TO ESTABLISH A COURT SYSTEM THAT IS BOTH CENTRALIZED AND RESPONSIVE. A CRITICAL ASPECT IN THE APPLICATION OF MBO TO THE COURT SYSTEM IS THE NEED TO ALLOW LOCAL JUDICIAL OFFICIALS MORE AUTONOMY THAN BUREAUCRATS IN OTHER ORGANIZATIONS. MANAGEMENT TECHNIQUES TO INSURE THAT LOCAL COURTS PARTICIPATE IN POLICYMAKING INVOLVE STATE FUNDING, FLEXIBLE PROCEDURAL GUIDELINES, REGIONALLY SUPERVISED PERSONNEL SYSTEMS, AND THE REGIONAL SELECTION OF COURT MANAGERS. REQUIREMENTS IN THE APPLICATION OF MBO TO THE COURT SYSTEM AND POTENTIAL OBSTACLES IN MBO IMPLEMENTATION PERTAIN TO GOAL QUANTIFICATION, COMPLIANCE, AND NECESSARY MANAGERIAL SKILLS ON THE PART OF JUDGES. IT IS CONCLUDED THAT MBO IS A MANAGEMENT TECHNIQUE UNIQUELY SUITED TO THE JUDICIAL ENVIRONMENT. (DEP)