Final answer:
Management by exception is a strategy that focuses on the significant differences between actual and desired performance, allowing managers to address priority issues.
Step-by-step explanation:
Focusing on substantial differences between actual and desired performance is called management by exception. This management strategy emphasizes the identification and handling of instances where there is a significant deviation or exception from the expected performance or standards. In practice, management by exception allows managers to focus on priority areas that require intervention, rather than involving themselves in the day-to-day operations that are running as expected.
Focusing on substantial differences between actual and desired performance is called management by exception. This approach involves identifying and addressing the outliers or exceptions in performance, rather than focusing on the entire range of variances. By focusing on exceptions, managers can pinpoint areas that require immediate attention and allocate resources effectively.
The approach leverages the use of performance metrics and standards to signal when action is needed. Managers can then concentrate their efforts on these 'exceptions,' analyzing the causes and implementing corrective actions to resolve these issues.