Disadvantages of Management by Exception

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Disadvantages of Management by Exception
Iqbell, Member
1. There is no generic way available by which one can differentiate important deviations from the unimportant ones.
2. Only an organization that has a perfect system of control will be able to employ the technique of MBE
3. It may lead to dispersal of authority that has its own limitations.

Forget About MBE
Eric Schmitz, Premium Member
MBE (as MBO) seems to be a theoretical approach, far away of reality.
1. Exceptions cannot be defined clearly. We are still very much searching for an accurate business performance measurement system. Only when this is more or less OK, you can talk about exceptions.
2. People need always care and attention. People deserve respect and that means you have to spend time on them. Of course they need to be approached depending on their skills, experience... And can expect an individual approach.
3. A manager has to be driven by his hunger for understanding the processes. A process can be stable, highly variable... Or something in between. For all these cases, the manager should study why.
4. Life is unpredictable. Exceptions are not predictable. Sometimes exceptions are a sign for a weakness of the system; sometimes they are just a swing of the reality. No management can be based upon it.
No time should be spend on this.

Caution with Management by Exception
Management by exception though a good management tool has to be applied with caution because all the issues both big or small are important in the management of an organisation.
Small problems can cause irrepairable damage as was the case of the 1986 space shuttle accident which was caused by a minor problem. Therefore, although managers will delegate to their subordinates, they should not lose sight of all the problems in the organisation.

Don't Fully Ignore Less Serious Issues
Leonard Caillouet
Like most management systems, MBE is only one tool that effective managers use. A strict application of MBE is no more effective than the mindless application of any other policy or technique. Good managers use their judgement to focus attention on deviations that require intervention but do not ignore those that are less serious.

Things to Watch Out for in Management by Exception
Peter Tamulis, Member
Care must be taken to avoid the possibility of only dealing with issues that are exceptions. It has the possibility of reducing communication to support the ongoing good work of individuals.
Also, it sometimes is viewed as looking at negative exceptions. It is equally important for a manager to be aware and be curious about exceptions that show stronger outcomes than projected.

MBE is Like Running Through a Forest with your Eyes Closed...
Kurt Ludikovsky, Member
Who would think that it’s a good idea to run through a forest with his eyes closed and make a correction when he bumps against a tree? What is the chance to ever arrive at the destination?
There is also the question “what is an exception and what not?” What is the norm? When is it an exception and when just a deviation?
Having said this, maybe this is an recommendation for first level supervisors with big amounts of less educated staff. Instead of permanently walking around like a slave driver, just let them work and react on exceptions. So the first step into process orientation. (might sound biased, but it’s just a thought).

It is a Suboptimal Approach
Jagdish B Acharya, Premium Member
Management by exception (MBE) looks at one particular exception at a time. In such process, the decisions taken may not be optimal solutions.
Often one decision may create problems for others and create other "exceptions". This may lead to many suboptimal solutions and ultimately wastage of resources.
In such circumstances, a comprehensive detailed root cause analysis, why-why analysis or cause-effect analysis may provide more comprehensive and long lasting solutions than MBE.

Unwanted Effects of Management by Exception
Gafar Bamikole, Member
We must not fail to raise the concerns of the dysfunctional effects of reposing trust on subordinates without ensuring they are ingrained with corporate philosophy and can show responsibility.
Otherwise, it could lead to abuse of discretion, excessive risk and ultimately it could threaten corporate existence as witnessed in ubs kweku and societe generale trader jerome kerviel.

Management by Exception no Medicine for All
Carlo Aldeghi
Management by exception is an instrument. And like all instruments it must be used skillfully and adapted to the scope. It isn’t a medicine for all but it helps in certain situations.
The risk of using “management by exception” is to lose the global view of business risk, that a manager needs to know. For example, the analysis of "weak signals" clashes with the management by exception.

Disadvantages of Management by Exception
Jagdish B Acharya, Premium Member
@Carlo Aldeghi: I agree global view and weak signals are indeed two important negative aspects of MBE.


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