Mention the Disadvantages of Management by Exception

There are many Disadvantages of Management by Exception. The main Disadvantages of Management by Exception are mention below-

# This concept is based on the existence of a budget against which actual results are compared. If the budget was not well formulated, there may be a large number of variances, many of which are irrelevant, and which will waste the time of anyone investigating them.

# The concept requires the use of financial analysts who prepare variance summaries and present this information to management. Thus, an extra layer of corporate overhead is required to make the concept function properly.

# This concept is based on the command-and-control system, where conditions are monitored and decisions made by a central group of senior managers. You could instead have a decentralized organizational structure, where local managers could monitor conditions on a daily basis, and so would not need an exception reporting system.

# The concept assumes that only managers can correct variances. If a business were instead structured so that front line employees could deal with most variances as soon as they arise, there would be little need for management by exception.

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Mention the Advantages of Management by Exception

There are many Advantages of Management by Exception. The main Advantages of Management by Exception are mention below-

# It reduces the amount of financial and operational results that management must review, which is a more efficient use of their time.

# The report writer linked to the accounting system can be set to automatically print reports at stated intervals that contain the predetermined exception levels, which is a minimally-invasive reporting approach.

# This method allows employees to follow their own approaches to achieving the results mandated in the company's budget. Management will only step in if exception conditions exist.

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Define Management by exception

Management by exception is the practice of examining the financial and operational results of a business, and only bringing issues to the attention of management if results represent substantial differences from the budgeted or expected amount.

For example, a company controller may be required to notify management of those expenses that are the greater of TK. 10,000 or 20% higher than expected.

The purpose of the management by exception concept is to only bother management with the most important variances from the planned direction or results of the business. Managers will presumably spend more time attending to and correcting these larger variances.

The concept can be fine-tuned, so that smaller variances are brought to the attention of lower-level managers, while a massive variance is reported straight to senior management.

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Management Short Notes on 'job description'

A job description identifies essential and non-essential tasks that are assigned to a specific position. It also identifies reporting relationships and may also describe required qualifications, minimum requirements, working conditions, and desirable qualifications.
Supervisors are responsible for developing and maintaining accurate and current job descriptions for their staff. The duties should be appropriate for the classification and consistent with the class specification. It is not uncommon for duty statements to vary within the same classification due to the various departmental settings and organizational structures.

A job description is a powerful tool that is used:

1.    To communicate the job expectations to the employee

2.    To focus recruitment efforts

3.    To manage employee performance

4.    To set employee and organization goals
5.    For workload management

6.    For succession planning

7.    To create training and development plans

8.    For the job evaluation and classification process

9.    To establish fair, competitive pay rates for staff members

10.    To develop career paths and opportunities for job growth

11.    To help maintain compliance with federal regulations

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Management Short Notes on 'Management by exception'

Management by exception is a style of business management that focuses on identifying and handling cases that deviate from the norm, recommended as best practice by PRINCE2.

Management by exception has both a general business application and a business intelligence application. General business exceptions are cases that deviate from the normal behavior 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.

Management by exception (MBE), when applied to business is a style of management that gives employees the responsibility to take decisions and to fulfill their work or projects by themselves. It consists of focus and analysis of statistically relevant anomalies in the data. If an unusual situation or deviation in the recorded data appears, which could cause difficulties for the business and can’t be managed by the employee at his level, the employee should pass the decision on to the next higher level. For example, if all products are selling at their expected volumes for the quarter, except one particular product which is underperforming or overperforming at a statistically relevant margin, only the data for that product will be presented to the managers for further investigation and discovery of the root cause. 

Management by exception can bring forward business errors and oversights, ineffective strategies that need to be improved, changes in competition and business opportunities. Management by exception is intended to reduce the managerial load and enable managers to spend their time more effectively in areas where it will have the most impact.

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Management Short Notes on 'Strategic planning'

The process by which leaders of an organization determine what it intends to be in the future and how it will get there. To put it another way, they develop a vision for the organization's future and determine the necessary priorities, procedures, and operations (strategies) to achieve that vision.

Included are measurable goals which are realistic and attainable, but also challenging; emphasis is on long-term goals and strategies, rather than short-term (such as annual) objectives. Strategic planning assumes that certain aspects of the future can be created or influenced by the organization.
Strategic planning is ongoing; it is "the process of self-examination, the confrontation of difficult choices, and the establishment of priorities"

Strategic planning involves "charting a course that you believe is wise, then adjusting that course as you gain more information and experience"

Lastly, Strategic planning is a tool for organizing the present on the basis of the projections of the desired future. That is, a strategic plan is a road map to lead an organization from where it is now to where it would like to be in five or ten years.

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