Management by Objectives Limitations
Management by Objectives Limitations are refers to how MBO can use to implement business goals and objectives
- Failure to Teach the Philosophy: As simple as MBO may seem, managers who are to put it into practice must understand and appreciate a good deal about it. They must explain to subordinates what it is, how it works, why it is being done, what role it will play in appraising performance, and above all, how all will get benefits from it.
- Problems of Goal Setting: MBO, like any other kind of planning, cannot work if those who are expected to set goals are not given needed guidelines. Truly verifiable goals are difficult to set. MBO sets verifiable goals so that person responsible for attaining them is quite clear in his approach.
- Time and Cost: It is a process which requires large amount of the most scarce resource in the organisation and time of the senior managers. Sometimes managers get frustrated and feel overburdened.
- Inflexibility: In a dynamic environment, a particular objective may not be valid for even, in the context of revised objectives, changed premises, it is useless to follow the old objectives. Thus inflexibility created by applying MBO may cause harms.
- Frustration: Sometimes MBO creates frustration among managers, because it tends to arouse high expectation for rapid change, particularly among the young and junior managers.
- Resentful Attitude of Subordinates: The subordinates can also be resentful towards the system of MBO. Sometimes, while setting the goals, they may be under pressure to get along with the management and the objectives which are set may be unrealistically high or far too rigid. The subordinates, generally, feel suspicious of the management and believe that MBO is another play of the management to make them work harder and become more dedicated and involved.
- Poor Integration: Generally, the integration of the MBO with the other systems such as forecasting and budgeting is very poor. This lack of integration makes the overall functioning of the system very poor.
- Difficulty in Achievement of Group Goals: When goals of one department depend upon the goals of another department, cohesion is difficult to maintain. In such cases, the achievement of goals will also become very difficult.