What is Management by Exception?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 16 October 2019
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Management by exception is an approach that sometimes makes use of methods and procedures outside the normal policies and procedures in order to achieve a certain purpose. This approach can be used as part of the response to an issue that arises during a specific project or during the course of some type of ongoing function within the company structure. This appearance of some type of deviation from the anticipated or budgeted results calls for adapting and in some cases abandoning normal management processes in favor of an approach that is likely to produce a positive response to those abnormal results.

In many cases, management by exception or (MBE) requires that the manager delegate specific functions to others who are part of the team or group impacted by the abnormal results. Within the scope of that employee’s duties, he or she will likely use processes designed to specifically address that deviation, while the remainder of the team continues to use standard operating procedures and practices to manage other company functions.


The degree of involvement that the manager retains in this process will vary, depending on the corporate culture and the nature of the exception. In some cases, the management by exception will focus on developing an alternative procedure to address the issue, then hand off the responsibility for implementing that procedure to a member of his or her team. This approach does have some merit, in that the exception is addressed without creating undue demands on the manager’s time. This helps to ensure that other functions under the care of the manager do not suffer due to a lack of attention, allowing the company to continue functioning at a higher rate of efficiency.

With a management by exception approach, the manager continues to be held accountable to superiors in the company’s chain of command, but avoids the danger of micromanaging the activities of each team member. Assuming that the team members are selected with care and are empowered by the right type of training, the manager spends less time looking over the shoulder of each employee and more time functioning as a facilitator and a resource to each of the members of his or her team. The end result of management by exception can be the incremental development of current employees for management positions that may be available in years to come, as well as the opportunity for employees to develop and demonstrate talents and abilities that may have been less apparent in a more restrictive atmosphere.


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Post 3

Can anyone point me towards some good resources that talk about this topic in further detail? Thanks!

Post 2

I manage a team of 25 and we usually organize ourselves according to a management by objective approach. We approach our business on a per project basis rather than having clearly defined roles that carry through on all projects. I have found that this produces better results and also keeps employees happy because they use diverse skill sets and find variety in the workplace.

This approach requires a certain amount of management by exception. I oversee all projects, but individual teams and member have their own responsibilities, all of which require them to make decisions on their own. If everyone is aligned towards the same objective you can trust people to work independently.

Post 1

I think that in a very general way this is always the best way to manage. I can think of very few situations that benefit from being micromanaged. Usually the people being managed feel undermined and dispensable. When you give people responsibility, autonomy, and accountability it spurns on productivity.

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