Top 10 Weaknesses and Shortcomings of Management By Objectives (MBO)

Weaknesses and Shortcomings of M.B.O

There are several weaknesses of the system, such as:

1. The effectiveness of M.B.O system depends on top management support, for objectives and targets are usually set by middle management and lower management in the light of the primary goals fixed by the top management. If the top management prefers a strong authoritarian approach with centralised control and decision-making, it will require considerable re-education and change in the attitude of the top management.

2. Verifiable goal-setting or framing a specific list of individual objectives and responsibilities is a difficult and time-consuming task, especially when a subordinate job is complex. Job description needs frequent review and decision within the organisation during the implementation of the M.B.O programme, which itself may cause changes in duties and responsibilities at every level of management.

3. Confusion often arises in the minds of managers regarding challenging and realistic objectives, giving rise to problems of measuring objectives difficult, as also in setting attainable goals, and in describing the objectives in clear and precise terms. Further, considerable difficulties may be encountered in coordinating objectives of the organisation with those of the individual and the department.

4. The philosophy of M.B.O. is not so simple as it seems to be. The implementing of M.B.O programme requires the full knowledge of what it is, how it works, why it is being done, what part it will play in appraising managerial performance, and how participants can benefit.

5. In M.B.O. goals are generally fixed for a short term, usually for a year. This creates the danger of emphasising too many short-term objectives, perhaps at the cost of long-term goals. The managers need to see that long-term objectives are not neglected.

6. There is often the danger that one individual’s goals may not be consistent with those of another. For example, the production manager’s goal for low cost might find no support from the marketing manager’s goals of product availability or quality; or the financial manager’s goal of low inventory. In such a situation, different individuals pursue paths that are best in their own interest but which are detrimental to the company as a whole.

7. The manager’s/subordinates’ appraisal and goal-setting procedure require a high degree of skill in interpersonal relations and extensive training in counselling and interviewing

8. The M.B.O programme takes a lot of time in form-completing on the part of managers. An individual becomes so enmeshed in performing assigned functions that he often loses sight of the goal, the reason for performance. It has been called ‘the activity trap by Odiorne. It requires a great deal of investment of the top management’s time and effort before it arrives at realistic targets and reviews the performance.

9. M.B.O. is far from a panacea. Those executives who have been involved in it very often find it difficult to apply M.B.O. concepts to their own work habits. They find it hard to think about the results of workers rather than the work itself. They stress goals that can be easily measured, sometimes forgetting that workers often behave almost like children at play and when the game is no longer challenging, interest is soon lost.

10. In some areas, such as cutting costs or increasing sales, measuring performance is a straightforward and more or fewer objectives matter. But in many other areas, such as subordinate development, appraising performance can be an acute problem.