MANAGEMENT BY EXCEPTION (M.B.E.)

It is a system of identification and  communication that signals the manager when his attention is needed: conversely, it remains silent when his attention is not required.

The primary purpose of such a system is to simplify the management  process itself.

It permits the manager to find the problems that need his action and to avoid  dealing with these the are better handled by his subordinates.

Elements of MBE: The MBE system’s structure is constituted by the following elements

1.	Measurement	by assigning values to performance
2.	Projection	Towards business objective & expectations.
3.	Selection	Follow progress towards its objectives
4.	Observation	to know current state of performance.
5.	Comparison	actual with expected and identify the            exceptions.
6.	Decision making	Prescribes the action that must be fallen in order
		(i) Bring performance back into control
		(ii) Adjust expectations to reflect changing conditions
		(iii) Exploit opportunity

It is also deeply rooted in the principles of the decision of labour, delegation or responsibility and authority and span of control.

Merits: The practice of MBE in management yields benefit in the following way

1. It save personal time
2. Concentrative executive effort
3. Reduces distortions
4. Facilitates broader management coverage
5. Lessens frequency of decision making.
6. Makes fuller use of knowledge of trends history and available business data.
7. Fully utilizes highly paid people on high-return work.
8. Identify crises and critical problems.
9. Provides qualitative and quantitative yardsticks for judging situations and people.
10. Enables inexperienced managers to handle new assignments with a minimum of related experience and training.
11. Alerts management to opportunity as well as difficulties.
12. Encourages more comprehensive knowledge of all phases of business operations.
13. Stimulates communication between different segments of an organization.

Demerits : Peter Druker’s critically viewed MBE as follows.

1. It breeds organization man thinking
2. It is often dependent upon unbelievable data.
3. It rewires a comprehensive observing and reporting system.
4. It tends to proliferate paper work
5. It often assumes an un relational stability in business affairs.
6. It gives false sense of security to management.
7. Standard of comparison tend to become obsolete.
8. Some critical business factors are difficult to measure
9. It can’t be a substitute for thinking.

Principles of MBE: The make the MBE system effective the following principles may be followed.

1. Practice of Self-control
2. Discard pre-conceived notions.
3. Be guided by policy
4. Learn to live with accountants.
5. Delegate for result.
6. Sharpen your observational power
7. Use MBE to describe subordinates in different phases.
8. Invite enough participation
9. Expect some people to call you lazy
10. Differentiate between “Big” and  “Little” jobs
11. Don’t be an “Over-the-Shoulder” supervisor
12. Avoid the “organization – man” attitude
13. Expect to work harder but to enjoy it more.