Final answer:
Management by exception is the method directing executive focus to significant budget variances, allowing managers to concentrate on critical business issues.
Step-by-step explanation:
Management by exception is the practice that directs executive attention to large budget variances. The correct answer is c. exception.
Management by exception is a management strategy where managers intervene only when performance metrics deviate significantly from set standards or objectives, especially in the context of budgeting and financial performance. This allows managers to focus their time and energy on the most significant issues. Under this system, small variances or issues that are within the acceptable range are ignored, under the assumption that they are not significant enough to warrant management's attention. By concentrating on the anomalies or the exceptions, managers can more efficiently use their time by resolving the biggest discrepancies that could have the greatest impact on the business. It is a hands-off approach to management that empowers employees to work independently while still ensuring that significant issues are addressed.