Management by objectives is characterized by combination of planning and control. This paper points out the importance of planning and control inside of organization and the way they are used in management by objectives. It elaborates theoretically parts of planning and control, and management by objectives itself. Planning is one of the most important function in the organization. It defines objectives and the way that objectives will come true. Besides of planning, it is important to start with control right away, one more of the most important function inside of organization. With control, it ensures that objectives are coming true and it allows to see where did mistakes happen, so that it would not happen again in the future. Objectives connect planning and control. Objectives define where organization wants to be in the future. Without them, organization can not functionate, so they are key part of the organization. When those two function intertwined in a method, and we add up importance of objectives, then we get management by objectives. It is a managerial method in which managers and employees agree upon a objectives and actions for their realization. It is characterized by the fact that every employee is included in decision making and the fact that employee self control themselves. It was introduced in the middle of 20th century and it had large success thru few upcoming years, but at the end of 20th century it experiences downfall of popularity because of its many defects. Although, it is still being used in some organization, the question is can it adapt to 21st century and all the changes that are happening in this century.