Given below are two statements: one is labelled as Assertion (A) and the other is labelled as Reason (R).
Assertion (A): Under management by exception, if a 2 per cent rise in labour cost is allowed, a 1 per cent rise should be reported to management.
Reason (R): Management by exception is based on the belief that an attempt to control everything results in controlling nothing.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) is false but (R) is true.
Assertion (A): Under management by exception, if a 2 per cent rise in labour cost is allowed, a 1 per cent rise should be reported to management. — False. Only deviations that go beyond the permissible limit are reported. If a 2 per cent rise is allowed, a 1 per cent rise is within the limit. Only a rise beyond 2 per cent should reach management.
Reason (R): Management by exception is based on the belief that an attempt to control everything results in controlling nothing. — True. Management by exception rests on this belief. So managers attend only to significant deviations and leave the rest.
NCERT (2026-27 Edition): “2. Management by Exception: Management by exception, which is often referred to as control by exception, is an important principle of management control based on the belief that an attempt to control everything results in controlling nothing. Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management. Thus, if the plans lay down 2 per cent increase in labour cost as an acceptable range of deviation in a manufacturing organisation, only increase in labour cost beyond 2 per cent should be brought to the notice of the management. However, in case of major deviation from the standard (say, 5 per cent), the matter has to receive immediate action of management on a priority basis. …” |