Q.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.

The principle you are looking for is Management By Exception. This principle states that a manager should focus their attention only on significant deviations—those that fall outside the acceptable range—rather than trying to examine every minor variance. It helps save time and energy by letting routine matters handle themselves, while the manager steps in only where the gap between actual performance and the standard is large enough to require corrective action.

A control system loses its effectiveness when the standards set for performance are unrealistic or unattainable. For example, if a sales target is set far above what the market can realistically absorb, employees may become demotivated or simply ignore the target altogether. In such a situation, the control system fails because it cannot provide a fair basis for measuring performance, and the feedback it generates becomes meaningless.

Management By Exception is a powerful control principle that helps a manager deal with deviations effectively without getting buried in routine data. The core idea is simple: instead of examining every single variance between actual performance and the planned standard, the manager focuses only on those deviations that are substantial — the ones that fall outside an acceptable range. This is not about ignoring small errors; it is about prioritising attention where it matters most.

Think of it like a doctor checking a patient's vital signs. A slight rise in temperature might be ignored, but a high fever demands immediate investigation. Similarly, in an organisation, a small delay in one department might be normal, but a 20% cost overrun in a project is a red flag. By applying Management By Exception, the manager avoids wasting time on minor, routine variances and concentrates on the exceptions that could threaten the organisation's goals.

Now, consider a situation where an organisation's control system loses its effectiveness. One common scenario is when the standards set for performance are unrealistic or unattainable. For instance, if a sales team is given a target that is far too high — say, doubling sales in a month without any additional resources — the control system will constantly show negative deviations. The team will feel demotivated, and the manager will be flooded with reports of failure. In such a case, the control system becomes a source of frustration rather than a tool for improvement. It loses its ability to guide corrective action because the standards themselves are flawed.

Another situation is when feedback is delayed. If a manager receives a report about a problem weeks after it occurred, the control system has already failed. By the time the deviation is noticed, the damage may be irreversible. For example, a factory that discovers a defect in a product only after it has been shipped to customers has lost the chance to correct the process in time. Control systems must provide timely information to be effective.

In short, Management By Exception helps a manager focus on significant deviations, but the control system itself can fail if standards are unrealistic or if feedback is too slow to be useful.