Management by Objectives (MBO) is a popular management philosophy that focuses on setting and controlling goals to improve an organization's performance. It encourages managers to carry out detailed planning and involves both subordinates and managers in the goal setting process. While MBO can be effective when implemented correctly, it also has some drawbacks. Let's take a look at the advantages and disadvantages of MBO together.
One of the main advantages of MBO is that it increases efficiency and transparency within an organization. By setting performance goals and measurable priorities, managers can ensure that their team is working towards common objectives. This also helps to improve communication within the team, as managers and their team members participate in the planning process together. However, there are some drawbacks to MBO as well.
It takes a long time, sometimes 3 to 5 years, to properly implement the MBO program, and some research studies have shown that these programs can lose their impact over a long period of time. Additionally, it increases the reach and number of meetings, which in turn increases the amount of paperwork; this can unnecessarily burden managers. Subordinates may also be wary of management and believe that MBO is another management move to make them work harder. Managers must also be aware that when setting goals, they may be under pressure to get along with management and the objectives that are set may be unrealistic or too rigid.
Therefore, it must be fully accepted as a management style and must be fully synthesized with the organizational climate. Additionally, most managers lack the proper skills, knowledge, and training required in interpersonal interaction, which is required in the MBO. Ultimately, the decision to implement goal-based management depends on the leaders of the individual organization. When successfully implemented, this strategic management model should improve an organization's performance through greater efficiency and transparency. However, managers must learn to handle any potential drawbacks of MBO such as increased paperwork or unrealistic goals.