Sunlight pvt. ltd. are involved in the production of light bulbs of 10W, 50W and 100W. They usually produce 1000 bulbs every day and the internal quality assurance team finds that five to ten bulbs are always defective, yet they ignore this fact and allow the production team to proceed without any further action. Which concept did they follow in the case?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Management by Exception
Option (1) Management by Objectives — Incorrect. Under this system a manager and his subordinates agree on goals together, and performance is judged against those goals. It says nothing about letting small defects pass.
Option (2) Management by Exception — Correct. This principle holds that trying to control everything ends in controlling nothing. So only significant deviations, the ones that go beyond a permissible limit, are brought to the notice of management. Five to ten defective bulbs in a thousand is a small variation within that limit. So the team lets production go on. If the defects rose beyond the limit, the matter would be reported for action.
Option (3) Budgetary Control — Incorrect. This means setting targets in budgets and comparing actual results with them. The case has no budget.
Option (4) Critical Point Control — Incorrect. This means watching only the key areas that are critical to success, instead of every activity. It decides which areas to watch. Management by exception decides which deviations to report, and the case is about letting a small deviation pass.
NCERT (2026-27 Edition): “Critical Point Control: It is neither economical nor easy to keep a check on each and every activity in an organisation. Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an organisation. …” “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, 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. …” |