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CSEET · Business Laws and Management · Functions of Management

In Sundaram Textiles Ltd, the standard was to produce 1,000 shirts a day. Over a month, actual output ranged between 980 and 1,020 shirts. The manager only investigates deviations that are well outside this narrow range, such as output below 900. Which principle of effective control is being applied?

The manager is applying management by exception. Only significant deviations from the standard, such as output below 900 shirts, receive attention, while minor fluctuations within an acceptable range are ignored. This saves managerial time and focuses effort on serious problems.

  1. AManagement by exceptionCorrect
  2. BSuitability principle
  3. CEconomy principle
  4. DFlexibility principle

Explanation

Management by exception means attention is given only to significant deviations, not minor ones within tolerance. The manager ignores small variations of about 2% and focuses on major ones. Economy relates to cost of control versus benefit, which is not the main point here.

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