The first step in the MBO process is when the managers and the employees establish a set of mutually agreed upon goals for a specific period of time.

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This is correct. The first step in the MBO (Management by Objectives) process is goal setting, where the managers and employees work together to establish goals that are specific, measurable, achievable, relevant, and time-bound (SMART).

The First Step in the MBO Process Is When the Managers