CSEET · Business Laws and Management · Functions of Management
A company fixes a standard of producing 1,000 units daily. At the end of the week, the actual output is found to be 940 units daily, and the manager decides to concentrate only on the few causes of large deviations affecting key result areas, ignoring minor ones. This approach is best described as:
The approach is management by exception. Under it, managers focus attention only on significant deviations from standards, such as those in key result areas, and ignore minor variations, which saves time and makes control more efficient and focused.
- AManagement by exceptionCorrect
- BZero-based budgeting
- CManagement by objectives
- DCritical path method
Explanation
Management by exception means managers attend only to significant deviations from standards and leave minor ones alone, saving time and effort. Management by objectives concerns setting goals jointly, not focusing on deviations. Zero-based budgeting is a budgeting method, and CPM is a project scheduling technique.
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