George Odiorne.

(i)  KRA means Key result areas. Key Result area are fixed on the basis of organisational objectives premises.
(ii) Key Result Areas are arranged on a priority basis. KRA indicates the strength of an organisation.
(iii) The examples of KRA are profitability, market standing, innovation etc.

(i) It saves the time of managers because they deal only with exceptional matters. Routine problems are left to subordinates.
(ii) It focuses managerial attention on major problems. As a result, there is better utilisation of managerial talents and energy.

(i) Management by exception is an important principle of managerial control suggested by the classical writers on management.
(ii) It is a style of business management that focuses on identifying and handling cases that deviate from the norm.

Professor Reddin defines MBO as "the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning".

Three process of MB0 are
(i) Defining Organisational Objectives.
(ii) Goals of Each Section.
(iii) Fixing Key Result Areas.

(i) Primarily, it is necessary to set objectives or norms with predictable or estimated results.
(ii) These performances are assessed and get equated to the actual performance. Next, the deviation gets analysed.
(iii) With an insignificant or no deviation; no action is a required and senior managers can concentrate on other matters.
(iv) If actual performances deviates significantly, the issue needs to be passed to the senior managers, as an exception has occurred.
(v) Finally the union is to solve this "exception" immediately.

(i) An attempt ismade by the management to integrate the goals of an organisation and individuals. This will lead to effective managerment.
(ii) MBO tries to combine the long run goals of organisation with short run goals.
(iii) Management tries to relate the organisation goals with society goals.
(iv) MBO's emphasis is not only on goals but also on effective performance.
(v) It increases the organisational capability of achieving  goals at all levels.
(vi) Aims at replacingthe exercise of authority with consultations.

Management by objectives is intended primarily
(i) To measure and judge performance
(ii) To relate individual performance to organisational goals.
(ii) To clarify both the job to be done and the expectations of accomplishment.
(iii) To foster the increasing competence and growth of the subordinate.
(v) To serve as a basis for judgements about salary and promotion.
(vi) To stimulate the subordinates motivation
(vii) To serve as a device for organisational control and integration.

(i) The main disadvantage of MBE is, only managers have the power over really important decisions, which can be demotivating for employees at a lower level
(ii) Furthermore, it takes time to pass the issues to managers.
(iii) Managing employees who deviate from the normal procedures.
(iv) Because of compliance failures are considered difficult to manage and typically find themselves with limited job duties and ultimately dismissed / terminated.

Management by exception provides the following
advantages.
(i) It saves the time of managers because they deal only with exceptional matters. Routine problems are left to subordinates.
(ii) It focuses managerial attention on major problems. As a result, there is better utilisation of managerial talents and energy.
(iii) It facilitates delegation of authority. Top management concentrates on strategic decisions and operational decisions are left to the lower levels.
(iv) It is a technique of separating important information from unimportant one. It forces managers to review past history and study related business data for identifying deviations.
(v) MBE keeps management alert to opportunities and threats by identifying critical problems. It can avoid uninformed and impulsive action.
(vi) Management by exception provides better yardsticks for judging results. It is helpful in objective performance appraisal.

The advantages of MBO are explained below:
(i) Managers are involved in objectives setting at various levels of management under MBO and this commitment ensures hard work to achieve them.
(ii) MBO process helps the managers to understand their role in the total organisation.
(iii) Manager recognises the need for planning and appreciates the planning.
(iv) MBO provides a foundation for participative management. Subordinates are also involved in goal setting.
(v) A department does not work at cross purpose with another department.

(c) Appraisal of activities - Frank discussion

(a) Both (A) and (R) are true and (R) is the correct explanation of (A)

(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)

(d) (i), (ii) and (iii) are correct

(b) (i) and (ii) are correct