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1.distinguish between advertising and personal selling - 2
2. What is meant by participating preference shares? 2
3. Explain the concept of management by exception. 2
4. What is marketing? State two features of the modern marketing concept. 4
5. Distinguish between line and line and staff organisation. 4

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Management of exception:
Management by exception (MBE) is a practice where only significant deviations from a budget or plan are brought to the attention of management.

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Management by Exception Defined

Management by exception is a management system where business results are compared against the results that were either budgeted or planned. Unlike other types of management systems, management by exception means that management intervenes in daily operations only if there is a deviation, or variance, between the actual results and the planned results.

Minor deviations may be brought to the attention of low-level supervisors, while huge deviations may be shot straight up to the top levels of management. This, theoretically, allows managers to focus on the most pressing and important issues and problems. For example, if productivity goals are being met, managers are busy dealing with other problems rather than walking around the production floor monitoring activity.

A Crucial Tool: Variance Analysis

One of the most important tools used in management by exception is variance analysis. Variance analysis is a process that is used to determine the variance, or difference, between the actual results and the planned for results and the cause of the difference. In other words, it's the technique used to determine whether there is a problem needing management's attention when managing by exception.

Example

Let's look at a quick example of management by exception and the use of variance analysis. Edward is an accountant who is responsible for tracking the production costs for his company's production division, which produces toys. Edward's company has launched a new toy line. The cost per unit of production was budgeted during the beginning of the project.

In reviewing the monthly invoices and receipts, Edward has determined that the production division is 10% over budget on the new toy. Company procedure only gives him authority to address overages of 5%, so he must bring this issue to his manager, Marty.

Marty has the authority to investigate and address variances of up to 10%. He investigates and determines that about a third of the variance was due to an unexpected increase in the price of one of the commodities used in production. The other two-thirds of the variance were related to price increases from some suppliers that are out of line with market prices. Edward's manager meets with the company's purchasing agent to discuss alternative vendors to correct the variance.

Advantages

Managing by exception has some distinct advantages. Let's look at some.

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management by exception: definition and limitations - video & lesson transcript | study.com

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Management By Exception: Definition and Limitations - Video & Lesson Transcript | Study.com

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Management by exception is a management system where business results are compared against the results that were either budgeted or planned. Unlike other types of management systems, management by exception means that management intervenes in daily operations only if there is a deviation, or variance, between the actual results and the planned results.

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Meaning and importance of controlling:

Controlling is a part of management. It is the process by which managers evaluate the work of the employees and see that they meet the set standards. It is through this process the management determines the promotion, demotion or transfer of employees.

The importance of controlling can be explained through the following points:
1) achievement of firm objectives
2) optimum utilization of resources
3) better morale
4) decentralization of authority

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Aashray's Group (Steps in the process of Controlling)

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Aashray's Group (Steps in the process of Controlling)

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1. Setting of Control Standards
2. Measurement of Performance
3. Comparing Actual and Standard Performance
We compare because:
i. To find out deviations if any.
ii. To determine the reasons for such deviation.
4.  Taking Corrective Action

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SPAN OF CONTROL:):):)):)
FACTORS FOR  SPAN OF CONTROL
capacity of the superior
ability of subordinates
nature of work
clarity of plans
Degree of specialization
Staff assisstance
location of operation
communication and control techniques

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Relationship Between Planning and Control:
They are closely related and interdependent functions. Without Planning, Controlling is blind.  Controlling requires standards along which performance can be measured.

Actions act as the bridge between Planning and Controlling.
Planning and Controlling are both forward and backward looking.
Please watch this free video and if you do not understand ask our group leader - Muskaan

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Relation Between Planning and Controlling and Process of Controlling Class XII Bussiness Studies by

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For the first time in INDIA, textbook in Economics, Accountancy & Business Studies with FREE Video Lectures by Eminent Authors/Subject Expert. To buy books visit www.goyal-books.com To view FREE Video Lectures visit www.goyalsOnline.com/commerce About the Book " Written strictly according to the latest syllabus prescribed by the CB.S.E., New Delhi.