Management by Exception (Nov’11)

Q. What is Management by Exception (Nov’11)?

Management by Exception: Management by Exception is a style of business management that focuses on identifying and handling cases that deviate from the norm. Practice whereby only the information that indicates a significant deviation of actual results from the budgeted or planned results is brought to the management's notice. Its objective is to facilitate management's focus on really important tactical and strategic tasks. In MBE (Management by Exception), the decision that cannot be made at one level of management is passed on to the next higher level.

Management by exception has both a general business application and a business intelligence application. General business exceptions are cases that deviate from the normal behaviour in a business process and need to be cared for in a unique manner, typically by human intervention. Their cause might include: process deviation, infrastructure or connectivity issues, external deviation, poor quality business rules, malformed data, etc. Management by exception here is the practice of investigating, resolving and handling such occurrences by using skilled staff and software tools. Good management can contribute to efficiency of business processes. Often in these cases the process will be called exception management, as exceptional cases are not the sole focus of the managerial policy, and exception management (as opposed to management by exception) denotes a more moderate application of the process.