There are several limitations to the impact of management by objectives, including:.

That context includes everything from the availability and quality of resources, to leadership and stakeholders. As an example, in a 1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low levels of commitment only saw a 6% increase in productivity.

When this approach is not properly configured, agreed upon, and managed by organizations, self-centered employees may be prone to distorting results, falsely representing the achievement of goals they set for themselves in a short-term, narrow manner. In this case, management by objectives would be counterproductive.

The use of APO must be carefully aligned with the culture of the organization. While APO is not as widely used as it once was, it still has its place in modern administration. The key difference is that instead of objectives in a waterfall process, objectives are discussed and agreed upon. Employees are often involved in this process, which can be advantageous.

Around APO it is said, - "What gets measured gets done", "Why measure performance? Different purposes require different measurements" - is perhaps the most famous aphorism of performance measurement.

Management by objectives has its detractors; among them W. Edwards Deming, who argued that a lack of understanding of systems commonly results in poor implementation of objectives.[3]​ Furthermore, Deming stated that setting production objectives will encourage resources to meet those objectives through any means necessary, which usually results in poor quality.[4]​.

Point 7 of Deming's Key Principles encouraged managers to abandon goals in favor of leadership because he felt that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of a goal. Deming also noted that Drucker warned managers that a systemic view was required[5] and believed that Drucker's warning went almost unnoticed by APO practitioners.

Objectives need to be quantifiable and trackable. Reliable management information systems are needed to set relevant objectives and monitor their "scope ratio" in an objective manner. Salary incentives (bonuses) are often linked to results in achieving objectives.

There are several limitations to the impact of management by objectives, including:.

That context includes everything from the availability and quality of resources, to leadership and stakeholders. As an example, in a 1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low levels of commitment only saw a 6% increase in productivity.

When this approach is not properly configured, agreed upon, and managed by organizations, self-centered employees may be prone to distorting results, falsely representing the achievement of goals they set for themselves in a short-term, narrow manner. In this case, management by objectives would be counterproductive.

The use of APO must be carefully aligned with the culture of the organization. While APO is not as widely used as it once was, it still has its place in modern administration. The key difference is that instead of objectives in a waterfall process, objectives are discussed and agreed upon. Employees are often involved in this process, which can be advantageous.

Around APO it is said, - "What gets measured gets done", "Why measure performance? Different purposes require different measurements" - is perhaps the most famous aphorism of performance measurement.

Management by objectives has its detractors; among them W. Edwards Deming, who argued that a lack of understanding of systems commonly results in poor implementation of objectives.[3]​ Furthermore, Deming stated that setting production objectives will encourage resources to meet those objectives through any means necessary, which usually results in poor quality.[4]​.

Point 7 of Deming's Key Principles encouraged managers to abandon goals in favor of leadership because he felt that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of a goal. Deming also noted that Drucker warned managers that a systemic view was required[5] and believed that Drucker's warning went almost unnoticed by APO practitioners.