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What is Manage by Exception in PRINCE2? A Practical Guide

What Is Manage by Exception in PRINCE2?

Manage by exception is the approach used by PRINCE2® to give people authority to manage within agreed limits, called tolerances. As long as performance is forecast to remain within those tolerances, management can continue at that level. If a tolerance is forecast to be exceeded, the situation is escalated to the next management level for a decision.

In simple terms, it creates a boundary around someone’s decision-making authority.

One-sentence definition: Management by Exception is the PRINCE2 principle of delegating authority within agreed tolerances and escalating when performance is forecast to move beyond those limits.

What Is PRINCE2 Management by Exception?

PRINCE2 management by exception means delegating authority from one management level to the next using agreed tolerances. The person or group receiving that authority can manage within those limits without seeking approval for every decision. When forecasts show that the relevant tolerance will be exceeded, the situation becomes an exception requiring escalation to the appropriate higher management level.

Management by Exception does not mean:

“Tell your manager whenever something goes wrong.”

Projects rarely go exactly according to plan. Suppliers can be late, estimates can change, risks can materialise, people can become unavailable, and unexpected problems can appear.

If every small deviation required senior approval, very little authority would actually have been delegated.

Instead, PRINCE2 establishes boundaries around that authority.

Think of it like this:

Imagine you’ve asked somebody to manage your kitchen renovation.

You’ve agreed what needs to be delivered, how much you can spend, when you need it finished, and how much flexibility they have.

You probably don’t want them phoning you because one box of tiles costs £20 more than expected.

But you also don’t want to discover that they independently approved an extra £8,000 of work.

The sensible middle ground is:

“You can make the day-to-day decisions, provided you stay within these agreed limits. If you think we’re going to go beyond them, come back to me.”

That’s the basic thinking behind Management by Exception.

On a PRINCE2 project, the limits are established through tolerances.

Explore where manage by exception fits in our blog, the 7 PRINCE2 Principles.

PRINCE2 Management by Exception showing management within agreed tolerance and escalation when tolerance is forecast to be exceeded.

How Does Management by Exception Work?

Management by Exception works by establishing objectives and tolerances, delegating authority, monitoring performance, and escalating decisions only when the relevant limits are forecast to be exceeded.

At a simplified level:

  1. Objectives are agreed. The project, stage, or work being delivered has defined targets.
  2. Tolerances establish the limits. These determine how much permitted variation there is around relevant targets.
  3. Authority is delegated. A management level is trusted to manage within those agreed limits.
  4. Performance is monitored and forecast. Actual progress and expected future performance are compared with the agreed plan and tolerances.
  5. Decisions remain at the delegated level while performance stays within tolerance. There’s no need to escalate every routine deviation.
  6. A forecast tolerance breach triggers escalation. When the responsible level can no longer manage the situation within its delegated authority, the decision moves upwards.

This means Management by Exception is about decision-making authority, not just reporting bad news.

How Management by Exception Works

Follow the flow from agreeing what the project needs to achieve to deciding whether work can continue at the current management level or needs to be escalated.

Start by establishing what the project, stage, or work needs to achieve. These objectives provide the targets against which performance can later be monitored.

Tolerances define how much permitted variation there can be around relevant targets before the decision needs to move to a higher management level.

The relevant manager or management level is given authority to make decisions and manage the work while performance remains within the agreed limits.

Actual progress is monitored, but PRINCE2 also looks ahead. The important question is whether the latest forecast shows that performance is likely to remain within the relevant tolerances.

Decision point

Is performance forecast to remain within tolerance?

YES

Continue managing

The manager continues working within the authority already delegated to their management level.

NO

Escalate for a higher-level decision

If a relevant tolerance is forecast to be exceeded, the situation moves to the appropriate higher management level for a decision.

In simple terms: Management by Exception gives people room to manage without asking permission for every decision, while making it clear when a decision has moved beyond the authority they were given.

Imagine the kitchen renovation again.

The kitchen is budgeted at £20,000, with an illustrative cost tolerance allowing the person managing it to work within an agreed range.

The electrician discovers a small additional job costing £250.

That’s a problem in the everyday sense. But if the overall forecast remains within the agreed cost tolerance and other relevant limits, the person managing the renovation may still have authority to handle it.

Now imagine significant structural damage is discovered, and the forecast moves thousands of pounds beyond the agreed limit.

The situation has changed.

It isn’t just “a bigger problem”.

It now requires a decision outside the authority originally delegated.

That is central to Management by Exception.

What Are Tolerances in PRINCE2?

A PRINCE2 tolerance defines the permitted variation around an agreed target before a deviation needs to be escalated to the next management level.

You can think of tolerance as the boundary around the freedom someone has been given to manage.

If performance remains within the relevant boundary, management continues at that level.

If forecasts indicate that the boundary will be crossed, the situation requires escalation.

Tolerances can operate at different management levels, including project, stage, and team/work-package levels.

They also aren’t just about money.

The Seven PRINCE2 Performance Targets

PRINCE2 v7 considers seven performance targets:

  1. Benefits
  2. Cost
  3. Time
  4. Quality
  5. Scope
  6. Sustainability
  7. Risk

PRINCE2 Performance Targets and Simple Tolerance Examples

Performance targetWhat is being controlledSimple illustrative example
BenefitsThe acceptable variation around expected benefitsAn office-relocation project has an expected reduction in annual property costs, with an agreed acceptable range around that target.
CostPermitted variation around the agreed budgetA fictional £20,000 kitchen renovation has an agreed amount of budget flexibility before additional approval is needed.
TimePermitted variation around a target completion dateAn office move can finish a few days later than its target date without affecting the agreed business deadline.
QualityPermitted variation around defined quality requirementsNew office furniture must meet agreed durability requirements rather than simply being the cheapest available option.
ScopePermitted variation in what the project is expected to deliverAn office refurbishment may distinguish essential rooms and facilities from lower-priority additions that can vary if necessary.
SustainabilityPermitted variation around agreed sustainability targetsA refurbishment has agreed targets concerning the sustainability of materials or project delivery activities.
RiskLimits placed around the project’s exposure to threatsThe project’s combined exposure to identified threats must remain within an agreed level.

These examples are just designed to illustrate the concept. PRINCE2 doesn’t prescribe a universal “+10% budget” or “one-week delay” tolerance that every project should use. Tolerances need to suit the particular project, plan, management level, and context.

This also explains why older descriptions of PRINCE2 tolerances that mention only cost, time, quality, scope, risk, and benefits are incomplete for the version 7 method: sustainability is also one of the seven performance targets.

Seven PRINCE2 performance targets of benefits, cost, time, quality, scope, sustainability, and risk.

Who Sets Tolerances in PRINCE2?

PRINCE2 tolerances are delegated between management levels. The business layer establishes overall project requirements and project-level tolerances, the Project Board sets stage tolerances for the Project Manager, and the Project Manager can establish appropriate Work Package tolerances for Team Managers.

This creates a chain of authority.

The exact application of tolerance depends on the relevant performance target and level. For example, quality tolerances are associated with product quality specifications rather than simply being summarised as one stage-level number.

The important idea is that each level should understand:

  • what it has authority to decide;
  • what limits apply;
  • what it needs to monitor;
  • when it must escalate; and
  • which higher level has authority to make the next decision.

This is why Management by Exception connects so closely with PRINCE2 roles and responsibilities.

Without clearly defined authority, “escalate when necessary” isn’t very useful. Nobody would know who can decide what.

You can learn more in our blog, PRINCE2 Roles and Responsibilities.

How Does Delegated Authority Work?

Delegated authority means giving the next management level permission to make decisions within agreed limits rather than requiring every decision to return to senior management.

Imagine you’re organising a large family event and somebody else is responsible for the catering.

You might say:

“You have up to £3,000 for the catering. Choose the supplier and sort out the details, but come back to me if you think we’re going to need more money.”

You haven’t given up control, you’ve just defined where their control ends and yours begins.

PRINCE2 applies that idea more formally across the project’s management structure.

The Project Board doesn’t need to make every operational decision because the Project Manager has authority to manage an authorised stage within its tolerances.

Likewise, where a Team Manager is used, the Team Manager can manage assigned work within the relevant Work Package tolerances.

This makes delegation meaningful.

Authority without boundaries can create uncertainty.

Boundaries without authority can create micromanagement.

Management by Exception combines the two.

What Happens When Tolerance Is Forecast to Be Exceeded?

When a PRINCE2 tolerance is forecast to be exceeded, the situation is escalated to the appropriate higher management level because the decision is moving beyond the authority previously delegated.

The word “forecast” matters.

You do not necessarily wait until the project has already crossed the boundary.

If current information shows that the stage is likely to exceed its tolerance, the Project Manager should escalate rather than simply continuing until the breach actually happens.

For a stage-level exception, the simplified route is:

  1. The Project Manager identifies that stage tolerance is forecast to be exceeded.
  2. The situation is raised as an issue.
  3. The Project Manager prepares an Exception Report for the Project Board or Project Executive.
  4. The directing level considers the situation, available options, and recommendation.
  5. The Project Board may make a decision within its authority or, where project-level tolerance would be exceeded, escalate to the business layer.
  6. If appropriate, the Project Board may request an Exception Plan.

An escalation therefore does not automatically mean:

  • the project has failed;
  • the project must stop;
  • an Exception Plan is always required;
  • somebody has made a mistake; or
  • senior management now takes over day-to-day management.

It means a decision has reached a level where greater authority is required.

PRINCE2 escalation decision flow showing when management continues within tolerance and when a forecast breach moves to a higher management level.

What Is an Exception in PRINCE2?

In PRINCE2, an exception is a situation in which performance is forecast to deviate beyond the agreed tolerance between relevant management levels.

This is more specific than the everyday meaning of “something has gone wrong”.

A supplier being one day late could be a problem.

A member of the team being unexpectedly unavailable could create an issue.

A new risk could emerge.

A cost estimate could increase.

None of those facts alone tell you whether you have an exception.

The important question is:

What does this mean for the forecast against the agreed tolerance?

Is Every Problem an Exception in PRINCE2?

No. A problem or issue does not automatically become a PRINCE2 exception.

Imagine a team is refurbishing a new company office.

One batch of desks arrives damaged.

That’s obviously a problem.

The supplier agrees to replace them immediately, and the Project Manager determines that the replacement can be handled without taking the stage beyond its agreed time, cost, scope, or other relevant tolerances.

The problem still needs managing, yes, but it has not automatically created a stage-level exception.

Now change the scenario:

The replacement furniture won’t arrive for six weeks. The delay means the office cannot open by a critical date, and the stage is now forecast to move beyond its agreed time tolerance.

The same underlying type of problem has a very different management consequence.

Now the Project Manager’s delegated authority is no longer sufficient to just carry on as planned.

That’s why “problem” and “exception” should not be used interchangeably.

The Difference Between an Issue, Risk, Deviation, Tolerance, and Exception

TermPlain-English explanation
ToleranceThe permitted variation around an agreed target before escalation is required.
DeviationA difference from what was planned or expected.
IssueA relevant event or situation that requires management attention and assessment.
RiskAn uncertain event or set of events that could affect objectives if it occurs.
ExceptionA situation where performance is forecast to move beyond agreed tolerance and therefore requires a higher-level decision.

What Is a PRINCE2 Exception Report?

An Exception Report provides the Project Board or Project Executive with information about a forecast stage or project tolerance breach so that the situation, possible responses, and recommendation can be considered at the directing level.

In simple terms, an Exception Report is an alert sent to project leaders when a project is about to go off track (like running over budget or schedule), giving them the details and options they need to decide what to do next.

It’s not just a “something went wrong” form.

At stage level, it becomes relevant when the Project Manager forecasts that the situation will take the stage or project beyond the tolerance within which they have authority to manage.

The Exception Report gives the higher management level information needed to make an informed decision.

This reinforces a useful point:

“Issue identified” does not automatically mean “Exception Report required”.

For example, suppose a Team Manager discovers that allocated work is likely to exceed its Work Package tolerance.

The matter is raised to the Project Manager.

If the Project Manager can resolve it while keeping the overall stage within stage tolerance, an Exception Report to the Project Board is not automatically required.

The problem has moved up one management level, but the Project Manager still has enough delegated authority to resolve it.

If the impact means the stage tolerance is forecast to be breached, the Project Manager then needs to escalate appropriately to the directing level.

This is Management by Exception working exactly as intended: decisions move only as high as they need to.

What Is an Exception Plan?

A PRINCE2 Exception Plan is a plan produced following an Exception Report when the Project Board directs that a planned response to the exception should be developed within the stage.

So, an Exception Plan shouldn’t be treated as the automatic first response to every problem or tolerance concern.

The sequence matters:

Forecast exception → Exception Report → directing-level decision → Exception Plan if requested

Where an Exception Plan is approved for a stage, it can replace the existing Stage Plan as the basis for managing the remainder of that stage.

The scale of the response can vary depending on the exception. If resolving the situation requires changes extending beyond the current stage, the implications may also need to be reflected at project-plan level.

Think back to the kitchen renovation.

Discovering major structural damage doesn’t mean the person managing the renovation should rewrite the entire plan and present the family with the bill afterwards.

First, the situation needs to reach the people with authority to decide what should happen.

They might decide to:

  • provide more money;
  • reduce something else from the renovation;
  • change the approach;
  • investigate further before deciding; or
  • reconsider whether the work should continue in its current form.

Only once the appropriate direction is clear does it make sense to plan the revised response.

The analogy isn’t a literal PRINCE2 process, but it captures the important principle:

Escalation comes before assuming you have authority to replan beyond your agreed limits.

A Practical Management by Exception Example

Let’s bring everything together with a fictional workplace project.

A company is moving from an old office into a new building.

The Project Board has authorised the current stage, which includes fitting out the new office, moving equipment, and preparing the building for employees.

For illustration, imagine the Project Manager has been given:

  • an agreed stage budget with a defined cost tolerance;
  • a target completion date with an agreed time tolerance;
  • clearly defined essential scope;
  • agreed quality requirements;
  • sustainability targets; and
  • limits around acceptable risk exposure.

(These are fictional examples to demonstrate how Management by Exception works, not prescribed PRINCE2 tolerance values.)

Scenario 1: A Small Cost Increase

The supplier says the chosen meeting-room chairs will cost slightly more than originally estimated.

The Project Manager checks the overall forecast.

Even with the additional cost, the stage is still expected to remain within its agreed cost tolerance, and the change does not create an unacceptable impact elsewhere.

What happens?

The Project Manager can continue managing within delegated authority.

There’s no reason to turn a manageable deviation into a Project Board decision simply because the original estimate changed.

Scenario 2: A Delivery Problem

Some desks arrive damaged and need replacing.

Again, something has gone wrong.

But the replacement can be arranged quickly enough that the stage is still forecast to remain within the relevant tolerances.

What happens?

The issue is managed at the appropriate level.

There is still no automatic stage-level exception.

Scenario 3: The Forecast Crosses the Boundary

Now imagine the building contractor discovers a serious problem requiring substantial additional work.

The latest forecasts show that the stage can no longer be completed within its agreed cost and time tolerances.

What happens?

The Project Manager should not simply approve whatever additional budget and time is needed.

The forecast has moved beyond the limits of their delegated authority.

The situation is escalated to the Project Board with the information needed for a decision.

Scenario 4: The Project-Level Limit Is Also Threatened

Suppose the Project Board considers the situation but determines that the impact would also cause the overall project to exceed the tolerance granted by the business layer.

Now the same principle applies again.

The Project Board has reached the limit of its delegated authority.

The matter needs to move to the business layer.

That’s the key to Management by Exception:

Each level manages what it has authority to manage. When the decision moves beyond that authority, it moves upwards.

Read more about PRINCE2 in our blog, What is PRINCE2 Project Management.

Project Board vs Project Manager: Who Decides?

The Project Board and Project Manager operate at different management levels.

The Project Board directs the project within the authority granted by the business layer.

The Project Manager manages the project day-to-day and controls an authorised stage within the authority and tolerances granted by the Project Board.

Project Board vs Project Manager

SituationProject ManagerProject Board
Routine stage decisions within delegated authorityManages and decidesDoes not need to make every routine decision
Stage remains within toleranceContinues managingMaintains direction and oversight
Stage tolerance is forecast to be exceededEscalatesConsiders the exception and decides how to respond within its authority
Project-level tolerance is forecast to be exceededProvides relevant informationEscalates to the business layer
Direction following an exception is requiredImplements authorised directionProvides direction or requests further planning where appropriate

This division is one reason PRINCE2 can provide governance without requiring the Project Board to manage the project every day.

Management by Exception vs Managing by Stages

Management by Exception and Managing by Stages are two different PRINCE2 principles, but they work closely together.

Management by Exception controls how authority, tolerance, and escalation work between management levels.

Managing by Stages controls how the project is divided into manageable sections for planning, authorisation, monitoring, and control.

Management by ExceptionManaging by Stages
Focuses on delegated authorityFocuses on dividing the project for management and control
Uses tolerancesUses management stages and stage boundaries
Determines when a decision needs escalatingCreates planned review and decision points
Helps keep routine decisions at the appropriate levelHelps avoid committing detailed control of the entire project at once
Can trigger escalation during a stageProvides formal opportunities to review the project between stages

Imagine the office-relocation project again.

The Project Board authorises the current management stage and gives the Project Manager tolerances.

That’s Managing by Stages and Management by Exception working together.

The Project Manager doesn’t need to return to the Board for every routine decision during that authorised stage.

That’s Management by Exception.

At the stage boundary, the Project Board gets a planned opportunity to review performance and decide whether the project should proceed.

That’s Managing by Stages.

If the Project Manager forecasts a tolerance breach before the normal stage boundary, they don’t simply wait for the scheduled review.

Management by Exception provides the escalation route.

Comparison of PRINCE2 Management by Exception and Managing by Stages showing tolerance-based escalation and stage-based project control.

Why Is Management by Exception Useful?

Management by Exception helps put decisions at the appropriate level without removing senior management control.

Without delegated authority, a Project Manager could spend an enormous amount of time asking permission for ordinary decisions.

Without agreed limits, senior management could lose visibility over decisions significant enough to affect the project’s viability or objectives.

Management by Exception creates a balance.

It can support:

  • clearer decision rights because people know what they have authority to manage;
  • less unnecessary escalation because routine deviations can remain at the appropriate level;
  • appropriate senior-management involvement when decisions genuinely need greater authority;
  • more effective day-to-day management because Project Managers do not need approval for every small change;
  • focus on significant forecast deviations rather than treating every problem as equally important; and
  • proportionate governance because control does not have to mean constant senior-management intervention.

Think again about organising that family event.

If the person handling catering had to call you to approve every extra bottle of water, you’ve technically retained control.

But you’ve also made delegation almost pointless.

At the opposite extreme, giving them unlimited authority isn’t sensible either.

Good delegation needs both freedom and boundaries.

That’s the role tolerances play in PRINCE2.

Does Management by Exception Mean Less Oversight?

No. Management by Exception reduces unnecessary intervention, not oversight. Senior management retains control by defining authority, receiving appropriate progress information, using assurance, and becoming involved when forecasts move beyond agreed tolerances.

The Project Board therefore does not disappear until something goes wrong.

It continues to direct the project.

Progress is still monitored and reported.

Assurance still matters.

Stages still require authorisation.

Business justification still needs to remain valid.

Risks and issues still need managing.

The difference is that senior decision-makers don’t have to become the day-to-day Project Manager in order to remain in control.

Management by Exception is actually better understood as:

“Manage at the appropriate level unless the limits of that level’s authority are forecast to be exceeded.”

Not:

“Senior management only pays attention when the project is in trouble.”

Can Management by Exception Be Tailored?

Yes. The way Management by Exception is applied should suit the project’s context.

A small, straightforward internal project may need relatively simple controls and communication.

A major project involving multiple suppliers, complex commercial arrangements, significant risk, or strict sustainability requirements may need more formal tolerance-setting, reporting, assurance, and escalation arrangements.

Tailoring can influence areas such as:

  • how tolerances are expressed;
  • which controls are used;
  • reporting frequency and format;
  • how responsibilities are allocated;
  • the formality of management products;
  • communication routes; and
  • how PRINCE2 works alongside the delivery approach.

Tailoring should not make authority ambiguous.

Even on a small project, people should still understand:

What can I decide myself, and when does somebody else need to decide?

That question is the practical heart of Management by Exception.

How Does Management by Exception Work With Agile or Hybrid Delivery?

Management by Exception can work alongside Agile, iterative, incremental, and hybrid delivery because tolerances can be set according to what needs to remain fixed and what can vary.

For example, a timeboxed delivery approach may place particularly tight limits around time and cost while allowing greater flexibility in scope.

That doesn’t remove Management by Exception.

It changes where the useful boundaries sit.

Imagine a team has four weeks and a fixed budget to deliver the most valuable features possible.

The team may have significant flexibility over lower-priority scope.

In that context, a change to scope isn’t automatically evidence that the project is out of control.

It may be exactly the type of flexibility that has been deliberately permitted.

The important question remains:

Is the work forecast to stay within the tolerances and authority agreed for this project and delivery approach?

This is another reason tolerances shouldn’t be reduced to “budget and deadline”.

How Does Management by Exception Fit Into PRINCE2 Training?

Understanding Management by Exception helps connect several parts of the PRINCE2 method.

It brings together:

  • the PRINCE2 Principles;
  • roles and responsibilities;
  • management levels;
  • Plans;
  • Progress;
  • Issues;
  • Risk;
  • management stages;
  • tolerances;
  • the Project Board;
  • the Project Manager;
  • Team Managers;
  • escalation; and
  • tailoring.

PRINCE2® Project Management Foundation develops your understanding of the method and its core concepts, while PRINCE2® Project Management Practitioner focuses more strongly on applying and tailoring PRINCE2 within a project context.

If you’re comparing the two qualifications, our guide to PRINCE2 Foundation vs Practitioner explains how they differ. Alternatively, schedule a call to chat about your options.

Frequently Asked Questions About PRINCE2 Management by Exception

What is Management by Exception in PRINCE2?

Management by Exception is a PRINCE2 principle that delegates authority between management levels using agreed tolerances. Managers can make decisions within those limits without escalating every deviation. If forecasts indicate that the relevant tolerance will be exceeded, the situation is escalated to the next management level because a decision outside the current level’s authority is required.

What are tolerances in PRINCE2?

PRINCE2 tolerances define permitted variation around agreed performance targets before escalation to the next management level is required. Tolerances can apply at project, stage, and team levels. They support Management by Exception by establishing clear boundaries within which delegated managers can make decisions.

What are the seven PRINCE2 performance targets?

The seven PRINCE2 performance targets are benefits, cost, time, quality, scope, sustainability, and risk. Tolerances can be established around relevant targets to define the limits of delegated authority. The way each tolerance is expressed and applied depends on the target, plan, management level, and project context.

What happens when tolerance is forecast to be exceeded?

When the relevant PRINCE2 tolerance is forecast to be exceeded, the situation is escalated to the appropriate higher management level for a decision. A Project Manager forecasting a stage tolerance breach escalates to the Project Board, while the Project Board escalates to the business layer if project-level tolerance is forecast to be exceeded.

Who sets tolerances in PRINCE2?

Tolerance is delegated through PRINCE2 management levels. The business layer establishes overall project requirements and project-level tolerances, the Project Board allocates stage tolerances to the Project Manager, and the Project Manager can establish Work Package tolerances for Team Managers. The precise application varies according to the performance target involved.

Is every project problem an exception?

No. A problem, issue, delay, or cost increase is not automatically a PRINCE2 exception. The important question is whether its forecast impact takes performance beyond the tolerance relevant to the current management level. If the problem can be resolved within delegated authority and tolerance, it may remain at that level.

What is an Exception Report in PRINCE2?

An Exception Report provides the directing level with information about a forecast stage or project tolerance breach so that an informed decision can be made. At stage level, the Project Manager creates the Exception Report when the situation is forecast to take the stage or project beyond the tolerance available to the Project Manager.

What is an Exception Plan in PRINCE2?

An Exception Plan explains how the project will respond to an exception within the stage when the Project Board has directed that such a plan should be prepared. It follows an Exception Report and directing-level decision rather than being created automatically whenever a problem occurs.

What is the difference between an issue and an exception?

An issue is something requiring management attention or assessment, while an exception specifically concerns a forecast deviation beyond agreed tolerance. An issue may therefore be resolved within existing delegated authority without becoming a stage-level exception. Its forecast impact on the relevant tolerances determines whether higher-level escalation is required.

What is the difference between Management by Exception and Managing by Stages?

Management by Exception controls delegated authority using tolerances and escalation, while Managing by Stages divides the project into manageable sections for planning, authorisation, monitoring, and control. The principles work together: the Project Board authorises a stage with tolerances, and the Project Manager manages within those limits until the next planned decision point or an earlier exception occurs.

Does Management by Exception mean the Project Board is uninvolved?

No. The Project Board continues to direct the project and remains involved in important authorisation, oversight, assurance, and exception decisions. Management by Exception reduces unnecessary intervention in routine day-to-day management; it does not remove Project Board control.

Can Management by Exception be tailored?

Yes. Management by Exception should be applied in a way that suits the project’s size, complexity, risk, delivery approach, commercial environment, and other contextual factors. The formality and specific controls may vary, but authority and escalation routes should remain clear.

What Should You Explore Next?

Management by Exception becomes easier to understand when you see how it connects with the rest of PRINCE2.

If you want to understand the wider method: Complete guide to PRINCE2 Project Management

If you want to understand the guiding obligations behind the method: Explore all 7 PRINCE2 Principles

If you want to understand who has authority at each management level: Explore PRINCE2 Roles and Responsibilities

If you want to understand the recurring management areas that support control: Explore the 7 PRINCE2 Practices

If you want to understand how management activity moves through the lifecycle: Explore the 7 PRINCE2 Processes

The simplest idea to take away is this:

Give people enough authority to manage. Give that authority clear boundaries. Escalate when forecasts show those boundaries will be crossed.

That’s Management by Exception.

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