MANAGEMENT BY EXCEPTION (MBE)
Meaning of MBE
Management by exception is an important principle of managerial control suggested by the classical writers on management. It is based on the belief that an attempt to control everything results in controlling nothing. Management by exception is a style of business management that focuses on identifying and handling cases that deviate from the norm.
For example, the production manager establishes quality control standards wherein five defects per 100 units produced are permissible. So long as the number of defects does not exceed 5, the supervisors/foremen (subordinates) will handle the problem. Whenever there are more than 5 defects, the matter will be reported to the production manager.
Management by exception (MBE) has both a general business application and a business intelligence application. General business exceptions are cases that deviate the normal behavior in a business process and need to be cared for in a unique manner, typically by human intervention. Their cause might include: process deviation, infrastructure or connectivity issues, external deviation, poor quality business rules, malformed data, etc.