Inspite of many advantages, MBO may not be considered as a panacea for all the evils of the organisation.
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
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
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
Tags : Management Concepts & Organisational Behaviour - MANAGEMENT BY OBJECTIVES
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