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Explain the concept of management by exception.

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In a large-scale organisation, keeping a close watch over all the activities is bound to be tedious and time consuming. If control is to be effective and economical it must focus attention only on factors critical to performance. Only significant deviations from standard should be reported to top level management and other problems should be entertained by the subordinates. 

For example, if telephones charges increase by 10% the deviation is too significant and it will be brought to the notice of top-level management.

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