Does management by objectives stifle organizational innovation in the public sector?

Abstract. Does management by objectives stifle organizational innovation in the public sector? The authors explore this possibility by describing five common characteristics of mbo and then contrasting them with four characteristics of innovative organizations. The comparison suggests that mbo -pressures lead to organizational stress that is often resolved by the creation of two working environments; one for the pursuit of innovative objectives, and one for the pursuit of regular objectives. This could lead to dysfunctionalism in the form of abandoned objectives-objectives that might have been achieved if mbo were not used. The authors conclude with four implications for public-sector managers: (1) the practice of including innovation objectives along with traditional objectives in the same set of objectives is questionable; (2) broader objectives, perhaps pointing in the general direction of the innovations sought, might be more productive in some cases than specific objectives; (3) possible incompatibility between mbo and innovation might be lessened if innovative ventures are pursued in ad hoc organizational structures; and (4) management by objectives and innovation are not necessarily compatible.