Management by objectives (MBO) has certain limitations and weakness. While some of these limitations are inherent in MBO, some limitations arise at the time of introduction and implementation of the process of MBO. Some of these limitations and problems associated with MBO are as follows:–
1. Lack of Support from Top Management: As the authority is vested in the top management in traditional organizations and it flow from top to bottom but in the process of MBO, the subordinates are also given an equal opportunity of participation, which is sometimes not liked by the top management. MBO cannot be successful without full support from management at the top most level.
2. Resistance by 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.
3. Problems in enumerating goals and objectives: The MBO can be successful if the goals can be established in proven terms. But if these are hard to enumerate and evaluate, it may not be achievable to fathom the performance of the employees. Moreover, MBO does not have any subjectivity in performance appraisal. It rewards only productivity without giving any consideration to the creativity of the employees.
4. MBO is time consuming and costly process: MBO could be a time consuming and costly process. A lot of paper work is required and a lot of meetings and reports need to be prepared, which add to the responsibilities and burden of the managers. Because of these reasons managers generally resist of the MBO.
5. Emphasis is on short term goals: Goals under MBO are set only for a short period ranging from six months to one year. The reason could be that goals are quantitative in nature and thus it could be difficult to go in for long range planning in MBO. Since the performance of the subordinate is to be reviewed after every six months or one year, they tend to concentrate on their immediate objectives without caring for the long range objectives of the organization. This emphasis on short term goals goes against the organizational efficiency and effectiveness and is not beneficial for the organization.
6. Lack of training and adequate skills: Most of managers lack adequate skills knowledge and training required in interpersonal interaction which is required in the MBO. Many managers tend to sit down with the subordinate, dictate the goals and targets with no input permitted from the subordinates and then demand that goals be achieved in a specified time. Whether the goals are realistic or not does not enter the picture. In this type of environment, there is a lack of two way communication and objectives are imposed on the subordinates. This could have an adverse impact on the morale, initiative and performance of the employees.
7. Poor Integration: Generally, there is poor integration of MBO with the other system such as forecasting and budgeting. This lack of integration makes the overall functioning of the system very poor.
8. Difficulty in Follow up: Under the system of MBO, the superior must get in touch with the subordinate at the appropriate time and at that time, the subordinate will inform the boss exactly what has been accomplished and how. If the superior delays the meeting, it will create hurdles in the successful implementation of MBO as the subordinate will also start taking the program casually.
9. Difficulty in Achievement of group Goals: When the achievement of the 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.
10. Inflexibility: MBO could result in a rigid organization structure. As the goals are set after every six months or one year, the manager may not like to review the goals in between, even if the need arises, due to fear of resistance from the subordinates. The managers must learn to handle this situation, because sometimes revision of short term goals is necessary for the achievement of long range objectives.
11. Limited Application: MBO is useful largely for the managerial and professional employees. It is not appropriate for all levels and for everyone because of the heavy demands made by it. It can be made applicable only when both the subordinates and manages feel comfortable with it and are willing to participate in it.
12. Gestation Period: It takes a lot of time, sometimes 3-5 years to implement the MBO program properly and fully and some research studies have shown that these programs can lose their impact and potency as a motivating force over a long period of time.