Controlling

Controlling is a management concept that enables the planning, supervision and control of a company.

1. Information function:
the information function occupies a special position in the control cycle, as none of the other controlling functions can be carried out without the provision and processing of the necessary data. The management of the different decision-making levels (lower, middle, top management) must be provided with decision-relevant information in order to be able to make appropriate and sound decisions quickly. Consequently, the information has to be processed in proportion to the problem and in the correct amount.

2. Planning function:
the planning function of controlling has the task of determining the future corporate development based on the predicted market and competition development as well as the calculated costs. Possible future negative developments should be recognised early on in order to be able to take appropriate counter measures. The strategic planning comprises a period of up to 5 years into the future and deals with aspired market and competitive positions, investments, the future capital structure as well as long-term R&D measures. The operative planning includes the objectives and measures for the next financial year and is derived from the strategic planning.

3. Supervision function:
the supervision function of controlling includes variance analyses, with which the attainment resp. maintaining of corporate objectives beyond all corporate divisions and levels is controlled. The attainment of the corporate objectives is regularly checked.

4. Control function:
the closing function in the Controlling control cycle is the control function. It is a measures control for improvements in order to discover and benefit from improvement potential within the company. As the resources of a company are tight and expensive, it is important to optimally arrange and coordinate the use of resources throughout all divisions and levels. This is an important part of the Controlling control function. The available resources must be optimally distributed among the different corporate functions and their optimal use ensured with Controlling methods. Various targets within the company, e.g. of sales, production, purchasing and warehousing, must be coordinated with each other on a global level, as each individual sector would strive for a different target optimization for itself than the company as a whole. Controlling is given a coordinating function here as well.

Chronological Product Sequence
Initial arrangement (e.g. cost-centre accounting); integrated corporate planning (target profit and loss account, balance sheet and cash flow account); monthly BWA reporting; regular (e.g. annual) target-performance comparisons with variance analyses; catalogues of measures.