Why_Does_Mbo_Become_Innefective

Why does MBO become Ineffective' Management by Objectives that also called as MBO is a kind of management system that focuses on the defining measurable and attainable goals that set by the managers and employees by considering the general objectives of the company or organization and resources available. It was first stated by Peter Drucker in 1954 in his book ‘The Practice of Management’. This theory includes setting goals, defining how will organizations execute the plan, monitoring the works, and evaluate the results. Management by Objectives is used as the measurement of the results and also as a guide to operate the unit and asses the contributions of each of its members. The main principle of MBO is to make sure that everybody within the organization has a clear understanding about the goals and considers about the role that each member hold. All layers of an organization are involved in these activities, and employees are not the exception. If the employees join the decision making process till the evaluation of their works, they will more likely to be responsible to enforce their duties. Despite the fact that it is an appealing theory of management, MBO has plenty of limitations and disadvantages. The process can be bureaucratic and time-consuming. Managers and employees spending hours in the meeting and the results or the defining goals might be unrealistic, which can lead to the ineffectiveness and inefficiency because the organization has to make sure that all staff are in the same page and share the same idea. Moreover, setting plans and goals does not guarantee that it will be achieved. Sometimes, there is no balance between the managers and employees. They agreed to adapt the MBO system but then the manager somehow unwilling to delegate fully to their subordinates. It can be one of the problems of executing the movements. When the market interest changes dynamically, new competitors come, or new technologies discovered it will cause another problem to this system. The defining targets might be out of date and irrelevant. In some cases managers should immediately fix the plan and try to apply different approaches to the situation. But it all depends on the individual. Some managers would rather maintain the structured goals that he/she had agreed with his/her subordinates which, again, might go to the ineffectiveness. There are many other ineffective sides of MBO. It can over-emphasize the setting of goals over the working of a plan as a driver of outcomes. Managers can be too rigid in comparing the results and the defining goals while under-emphasizing the importance of the environment in which the goals are set--at the same time. The evaluation of each member often unbalance as well. Companies can be too perfectionist in appraising employees. Self-centered employees might produce bad results that out of plan and frequently false representing achievement of goals that structured in a short-term. MBO does not work well to employees who have little discretion over how their jobs are performed. In addition, MBO can cause problems in business with a weak corporate culture. In the 1980s and 1990s, many large financial businesses such like Prudential found severe problems with sales staff. In the process of their plan’s enforcement, the staff had been miss-selling private pension plans to people who would have been better off staying in the state pension scheme. The employees’ short-term pursuit of their objectives led the companies into years of bad publicity and very expensive refunds to the customers. MBO can give the green light to short-term decision makers unless a positive long-term vision is clearly in place. So the task to make MBO more effective is to make it more flexible and fluid. But since the characteristic of MBO is clarity, the cost that the system should pay if it fixed to be more flexible is that—it might losses clarity. It may lead to bad performance of the employees. Moreover, different and plenty of objectives will confuse them. Overall, as the top persons in management, managers hold the role to control the system and monitor it. However MBO is not the only way to define and accomplish the goals. Managers can combine it with another management system with still considering which one has more advantages to be applied to the company that suitable with the culture.