"In analysing deviations between actual performance and standard performance, two key concepts are used so that attention

The two concepts are critical point control and management by exception.

Critical Point Control: For controlling effectively, control should be exercised only on critical points which are identified on the basis of organisation's key result areas. These are the areas in which satisfactory performance is critical to achieve organisational objectives. Some common key result areas are productivity, Profitability, market share, cost structure, product quality, etc.

Management by Exception: Management by exception involves reporting of exceptional deviations between standards and actuals to higher management levels to take corrective actions. Generally deviations beyond the acceptable level in key result areas are reported to higher management.

The use of concepts of critical point control and management by exception in controlling saves a lot of time of managers and their attention remains focused on key issues in controlling.

The two concepts are critical point control and management by exception.

Critical Point Control: For controlling effectively, control should be exercised only on critical points which are identified on the basis of organisation's key result areas. These are the areas in which satisfactory performance is critical to achieve organisational objectives. Some common key result areas are productivity, Profitability, market share, cost structure, product quality, etc.

Management by Exception: Management by exception involves reporting of exceptional deviations between standards and actuals to higher management levels to take corrective actions. Generally, deviations beyond the acceptable level in key result areas are reported to higher management.

The use of concepts of critical point control and management by exception in controlling saves a lot of time of managers and their attention remains focused on key issues in controlling.