Management by exception


Management by exception

Management by Exception is a "policy by which management devotes its time to investigating only those situations in which actual results differ significantly from planned results. The idea is that management should spend its valuable time concentrating on the more important items (such as shaping the company's future strategic course). Attention is given only to material deviations requiring investigation." [1]

It is not entirely synonymous with the concept of exception management in that it describes a policy where absolute focus is on exception management, in contrast to moderate application of exception management.

In Project Management, an implication of Management by Exception is that the project board should meet when key decisions about the project should be taken, and not on regular intervals. The Project Manager should produce an Exception Report to summon the board for such meetings[2].

This type of management can be powerful when it is necessary to process lots of data in order to make managerial decisions. The problem with this policy is that it can result in myopic behavior. This behavior implies that lower management shifts its goal from running a successful business in a real world environment, to feeding centralized auditors and managers with financial data which will be interpreted as within. In this situation, a company manager might sell off assets like equipment (vital to long run productivity) in order to manipulate accounting ratios used in determining exception. Thus, lower management can in some cases dodge being marked as an exception, to the long term detriment of the plant they are managing.

References

See also

Exception management



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  • management by exception — UK US noun [U] (ABBREVIATION MBE) ► HR, WORKPLACE, MANAGEMENT a style of management that involves giving the people who work for you the authority to control their work or particular jobs, projects, etc., unless there is an exception (= an… …   Financial and business terms

  • Management by exception — Der Begriff Management by Exception (Führen nach dem Ausnahmeprinzip) bezeichnet einen Managementstil, bei dem die übergeordneten Führungsorgane die Erledigung von Routinefällen den zuständigen Mitarbeitern zur eigenverantwortlichen Entscheidung… …   Deutsch Wikipedia

  • Management by Exception — Der Begriff Management by Exception (Führen nach dem Ausnahmeprinzip) bezeichnet einen Managementstil, bei dem die übergeordneten Führungsorgane die Erledigung von Routinefällen den zuständigen Mitarbeitern zur eigenverantwortlichen Entscheidung… …   Deutsch Wikipedia

  • management-by-exception —  Theory that managers should focus their attention on areas that differ from normal.  ► “The model developed provides a management by exception approach to highlight problem items and identify the degree to which total inventory is operational… …   American business jargon

  • management by exception — The management of an organization through investigation of deviations from expected results. For example, management may concentrate on Variances from *budgeted amounts, and on operational anomalies generated by *exception reports …   Auditor's dictionary

  • management by exception — 1) A principle of management in which a management decision that cannot be made at one level is passed up to the next level for a decision; i.e. exceptional decisions are passed up the management tree. 2) The principle used in budgetary control… …   Accounting dictionary

  • management by exception — 1) A principle of management in which a management decision that cannot be made at one level is passed up to the next level for a decision; i. e. exceptional decisions are passed up the management tree. 2) The principle used in budgetary control… …   Big dictionary of business and management

  • Management by Exception — Führung im Ausnahmefall; Führungskonzept mit weit gehender Denzentralisation. Alle im normalen Betriebsablauf anfallenden Entscheidungen werden von dafür zuständigen Stellen getroffen. Ein Eingriff des Vorgesetzten erfolgt nur, wenn fixierte… …   Lexikon der Economics

  • management by exception — /ˌmænɪdʒmənt baɪ ɪk sepʃən/ noun a management system whereby deviations from plans are located and corrected …   Marketing dictionary in english

  • Управление по исключительным отклонениям (MANAGEMENT BY EXCEPTION)  — Принцип управления, согласно которому основное внимание необходимо концентрировать на тех аспектах реальных бизнес процессов, показатели которых существенно отклоняются от ожидаемых …   Словарь терминов по управленческому учету