Q.'An effort to control everything may end up in controlling nothing.' Explain.

This statement expresses the principle of Management by Exception (also called control by exception), used while analysing deviations in the controlling process. A manager's time is limited, so trying to scrutinise every small variation between the standard and the actual performance leaves no attention for the deviations that really matter — in effect, an attempt to control everything ends up controlling nothing.

Management by Exception therefore holds that only significant deviations that go beyond the permissible limit should be brought to management's notice, while routine, within-limit matters are handled at lower levels. For example, if a 2 per cent rise in labour cost is the acceptable range, only an increase beyond 2 per cent needs managerial action. It works alongside critical point control, which concentrates attention on the key result areas most vital to the organisation's success.

This line is the core idea behind Management by Exception, one of the two principles a manager uses while analysing deviations in the controlling process. It rests on a simple truth: a manager's time and attention are limited. If a manager tries to examine every minor variation between the standard and the actual result — every small delay, every tiny cost difference — they will be buried in trivial detail and will miss the deviations that really threaten the organisation's goals. In trying to "control everything," they end up controlling nothing.

Management by Exception therefore says that only the significant deviations which go beyond the permissible (acceptable) limit should be brought to the notice of management. Routine, within-limit matters are left to be handled at lower levels. For instance, if a manufacturing plan lays down a 2 per cent increase in labour cost as an acceptable range of deviation, then only an increase beyond 2 per cent needs to reach management. A larger deviation — say a 5 per cent rise — demands immediate attention on a priority basis.

This principle works hand in hand with Critical Point Control, which focuses control on the Key Result Areas (KRAs) that are critical to the organisation's success. Rather than watching every activity equally, a manager watches the points where a failure would hurt the whole organisation — for example, a 5 per cent rise in labour cost matters far more than a 15 per cent rise in postal charges.

Focusing on significant deviations in this way brings clear advantages: it saves the time and effort of managers, focuses managerial talent on the important areas, leaves routine problems to subordinates (which also facilitates delegation of authority and boosts employee morale), and ensures that critical problems needing timely action are identified quickly.