Question

Name the principle that a manager should consider while dealing with deviations effectively. State any one situation in which an organisation's control system loses its effectiveness.

Answer 1

The principle of management that a manager should consider while dealing with deviations effectively is management by exception. According to this technique ‘an effort to control everything may end up in controlling nothing’. Thus, only significant deviations which are beyond the permissible limit should be acknowledged.
For example, Management may decide that an increase in production cost by Rs 2 per unit can be checked at the supervisory level and any further increase is to be tackled by management.

An organisation's control system loses its effectiveness when standards cannot be defined in quantitative terms. For example, it is difficult to set standards for accessing 'Employee Morale' in employees as every individual is motivated by different motives and drives.