Management Concepts & Organisational Behaviour - MANAGEMENT BY OBJECTIVES

Reasons why MBO Fail

   Posted On :  17.05.2018 10:15 pm

Inspite of many advantages, MBO may not be considered as a panacea for all the evils of the organisation.

Reasons why MBO Fail
 
 
Inspite of many advantages, MBO may not be considered as a panacea for all the evils of the organisation. The success of the program depends on several factors. If the program fails, it is largely due to the following reasons:
 
1. Lack of top management involvement and support. For an MBO program to succeed, it must have the complete support of top management.

2. Lack of understanding of the philosophy behind MBO. MBO program in some organizations meet the resistance of employees because it is imposed on them as ‘control device’ to curb their freedom.

3. Difficultly in setting realistic and meaningful objectives. Some jobs and areas of performance cannot be quantified and hence are not amenable for objective evaluation.

4. Increased time pressure. To use MBO program, managers must learn to establish priorities and use the time effectively.

5. Lack of relevant skills. Managers may not have the requisite skills for identifying objectives, communication and interpersonal interaction such as counseling and receiving feedback.

6. Lack of individual motivation. The rewards and incentives for superior performance have to be specified clearly. Ambiguity or uncertainty regarding the outcome of the efforts is one of the reasons for the non-performance.

7. Poor integration with other systems. Objective setting and review phases must be performed in conjunction with other activities such as budgeting, forecasting and the like. Often managers are neither taught how to set the objectives nor familiarized with the various plans and policies of the organisation. In such cases, each department ends up going its own way, and the results are counterproductive to the overall organisaiton.

 

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