Business Guide

business   »  business definitions   »  management by exception

What Management by Exception Really Means

        posted by , January 02, 2013

Management by Exception (MBE) is a technique whereby management only investigate high impact deviations from planned results. This frees management to focus on strategic activities.

Management by Exception is used by organizations in several different ways as the following examples illustrate:

1. Call Center Management

A manager at a call center may spend 100% of his or her time dealing with customers who have serious customer service complaints.

This can be considered management by exception because the manager doesn't supervise employees and only gets involved when there is a significant problem.

This technique reduces management expenses. However, it's a reactive style of management that tends to reduce customer satisfaction.

2. Project Management

A project manager doesn't schedule regular meetings. Instead, meetings are only scheduled when their is a important issue to discuss.

This approach frees project resources to focus on their deliverables.

3. Sales Management

The management team of a sales driven organization focus on marketing and product development. They manage the sales team with a series of sales KPIs. Management only becomes involved in the sales process when a sales team, product or campaign is underperforming.

Management by Exception allows management to focus on key revenue opportunities.

Management by Exception Versus Exception Management

Management by Exception implies that management only focuses on critical exceptions.

Exception Management is the management of all exceptions. This can include process deviation, infrastructure failures, system problems, legal issues and other business exceptions.

Exception Management doesn't necessarily require management attention.

When Management by Exception Makes Sense

Management by Exception is commonly criticized for being reactive.

It's best applied to business scenarios in which proactive management is prohibitively expensive or difficult.

For example, management of a call center may find that expensive preventative measures such as additional training only have a marginal effect on customer satisfaction.

Management by Exception also makes sense when your processes are highly optimized and measured. If you're doing something right, you can focus management efforts elsewhere.

3 Shares Google Twitter Facebook

Your business has only two departments: marketing and innovation.

How to sell a cooker like a mad man.

Superiority of Defense is a principle of strategy that states that defensive strategies tend to be stronger than offensive strategies.

Why maximum quality isn't the goal.

Recently on Simplicable

What Competitive Advantage Really Means

posted by Anna Mar
A business with competitive advantage is like a star professional athlete: they're in a league of their own. They're not necessarily good at everything but they do a few things very well.

70 HR Metrics With Examples

posted by Anna Mar
Who's watching the watchers?

14 Best Practices for Customer Service and Support Processes

posted by Anna Mar
Superior customer service is easiest and cheapest way to build competitive advantage.

6 Consulting Circus Tricks

posted by John Spacey
IT consulting is a tough industry that knows how to get paid.


about     contact     sitemap     privacy     terms of service     copyright