Controlling / Controlling
Controlling takes place when manager and controller cooperate.
| Controlling is the whole process of defining objectives, of planning and controlling (in the sense of steering and regulating)|
and includes all relevant financial and commercial aspects.
Controlling involves such activities as taking decisions, defining actions or procedures determining alternatives, directing individuals and their activities and setting up guidelines. Consequently managers must practise controlling, since it is their responsibility to define a company’s objectives and to specify the necessary targets as part of the planning process. Likewise, they are responsible for the achieved results. Controlling is therefore understood as a management activity and should be undertaken in every business, however small. For the same reason controlling should not be thought of as being exclusively the professional controller’s job.
Management that practises proper controlling is focussed on objectives and planning, is forward-looking, adaptable and decentralised. It only makes sense to install controller services in those businesses whose managements believe in and practice controlling. Operative controlling includes those management activities that cover setting objectives, planning and controlling in the mid-term and single year time frame. The main objectives are liquidity, profits and financial stability. Strategic controlling includes those management activities that comprise the planning, testing, implementation and monitoring of strategies. The time span is determined by the period considered relevant for the strategy’s development. Typical objectives here could be: existing and future potentials for success, market shares as well as (free) cash flow.