Management by exception is a method or plan of supervisiori/control under which only significant deviations from normally expected results or conditions are brought to the attention of top management for consideration and decision. The idea behind it is that management attention will be focused only on those areas where there is need of action.

MBE is a technique which holds that subordinates should be authorised to manage all routine matters and superior managers should reserve the authority with themselves to make decisions on exceptional issues and policy matters. Importance of MBE 

1. It saves time, effort and energy of managers. 

2. The complex problems and issues demanding urgent attention of managers can’t be overlooked. 

3. Timely attention and corrective measures for exceptional issues can be ensured as per desired standards. 

4. It extends the scope of managerial performance. 

5. It reduces the frequency of making decisions.

Limitations of MBE : 

1. This approach promotes personalised decisions of an individual. 

2. It requires establishment of clean and broad standards of performance. But it is very difficult to do so. 

3. It requires detailed reporting system, which is not so easy. 

4. It requires too much paper work, which makes it a costly and time consuming practice. 

5. It requires delegation of authority which many managers do not want.