Pros and Cons of MBO
Management by objectives i.e. MBO is a goal-oriented management approach that effectively aligns organizational goals and individual goals and provides a clear direction and purpose for achieving. Here, we will explore the key pros and cons of MBO in business.
Pros of MBO
MBO offers several benefits to businesses – from them, here are the seven benefits of MBO to mention:
Detailed Planning
MBO encourages detailed planning within organizations. It prompts managers and employees to set clear, specific, and measurable objectives.
This precision in goal-setting facilitates a better understanding of what needs to be achieved and how it can be accomplished. It’s like plotting a well-detailed map for your journey towards success.
Flexibility
Unlike rigid, one-size-fits-all approaches, MBO is remarkably flexible. It recognizes that every employee possesses unique strengths and capabilities. Instead of imposing uniform standards, it allows for tailored plans that suit individual skills and attributes. Think of it as personalized coaching for each team member.
Time Efficiency
Time is of the essence in any organization. MBO streamlines the performance review process. By setting clear goals and documenting progress throughout the year, it reduces the time and effort required for traditional, often lengthy, evaluations. It’s like getting to the heart of the matter without unnecessary delays.
Read More: Organizational Goals
Increased Commitment
Knowing that their contributions are aligned with organizational goals, employees become more committed. MBO creates a sense of ownership over objectives.
When individuals have a stake in setting and achieving their goals, they are more motivated to put in the effort. It’s similar to having a personal investment in the company’s success.
Managing Rogue Behavior
Every team may have a maverick or two who prefers doing things differently. While innovation is welcome, it shouldn’t disrupt the whole team. MBO encourages even the most independent thinkers to channel their creativity towards company objectives.
Read More: Hierarchy of Planning
Enhanced Communication
Effective communication is the lifeblood of any organization. MBO thrives on it. By involving managers and employees in ongoing discussions about objectives and progress, it fosters open dialogue. This ensures that everyone is on the same page and promotes teamwork.
Individualized Goal-Setting
MBO recognizes that one size doesn’t fit all. It promotes setting objectives that are specific to each employee’s role and capabilities. This approach maximizes each team member’s contribution and encourages them to shine in their unique way.
Read More: 4 Approaches to Planning
Cons of MBO
While MBO offers various benefits to organizations, it also has some drawbacks that organizations should pay careful consideration to. Some cons of management by objectives include the following:
Incomplete Assessment
MBO may lead to an incomplete evaluation of employee performance. Just as judging a cake by its appearance may not reflect its taste, MBO tends to focus on specific, quantifiable goals, potentially overlooking essential aspects of an employee’s work.
Complex Setup
Implementing MBO requires a significant amount of time and effort. It’s akin to assembling complex components before seeing the full picture. This setup phase can be resource-intensive and may not always be feasible.
Read More: 5 Methods of Planning
Quality Sacrifice
MBO’s emphasis on achieving specific goals can sometimes result in a sacrifice of overall work quality. It’s like rushing to reach a destination and missing the scenic route – the focus becomes meeting objectives rather than delivering high-quality work.
Long-term Patience
MBO is not a quick-fix solution. Similar to planting a tree that takes years to grow and provide shade, MBO requires a long-term commitment to see substantial improvements in performance.
Excessive Rules
In some cases, MBO can lead to an excessive number of standards and goals. This overload of objectives can overwhelm employees, making it challenging to prioritize and achieve them effectively. It’s like trying to juggle too many balls at once; eventually, some may be dropped.
Subjective Views
Despite the use of quantifiable goals, interpreting performance data can still vary among individuals. Just as watching a movie with friends can lead to differing opinions and interpretations, the subjective nature of assessing performance under MBO can sometimes result in disagreements and misunderstandings.
Read Next: 6 Ps of Planning
By profession, Sujan Chaudhary is a BBA (Bachelor in Business Administration) graduate, and by passion a blogger. He loves to share his business knowledge with the rest of the world. While not writing, he will be found reading and exploring the world.