Those who hear the word “controlling” for the first time usually imagine control over something, but in fact this is completely not the case. Controlling in an enterprise is a complex system that is aimed at improving financial, personnel, and technological processes in order to achieve the effective functioning of the organization as a whole. Unlike control, which is designed to identify problems and mistakes made in the past, controlling strives to build a system for managing processes in the company that focus on current and future affairs. Why is this so important?
The controlling service at an enterprise is an important element, since its employees can minimize resource losses, analyze current and future plans, and also identify possible errors, that is, those that may be made in the course of the company’s activities. However, in order to understand what this type of activity is, it is important to study its features and key points in more detail. This article will discuss the basic concepts, goals and objectives of controlling, as well as its concepts, tools and functions.
Concepts and definitions
Controlling is a new direction in the management system, so today there is no unambiguous definition of this concept. However, there are several definitions that are most popular and reflect the essence of this term.
Its origin is related to the English verb to control. Translated, “controlling” is “direction, supervision, control, management, regulation.” However, such a description is not enough to understand the essence of this phenomenon, so it is worth considering the following two more precise definitions.
Controlling is a separate area of activity in organizations, which is associated with the implementation of an economic function and is aimed at making the right strategic and operational decisions by management personnel.
Controlling is a set of actions aimed at supporting all processes with the necessary information and analytical support for making the right management decisions. Most often they are aimed at increasing profits in the organization.
Modern controlling at an enterprise must necessarily include a quality management system, risk management and a system of key indicators, as well as process management when implementing any type of planning.
Goals and objectives
Based on the basic concepts, we can conclude that the main goal of controlling at an enterprise is to orient all management processes towards achieving certain set goals, which can be expressed in product improvement, achieving the required level of competitiveness, and so on. In other words, the goal is to maintain effective management of the organization. What is its purpose?
Based on the goal, the following main tasks of controlling in company management are identified:
- development of planning methodology and its organization;
- accounting, including the collection of information and its processing;
- control;
- organization of events using a special observation system.
These tasks, stated briefly, have specific subtasks that must be performed by the service or department entrusted with the controlling function. Development of planning methodology and its organization includes the following:
- ensuring the creation of a regulatory framework that will help implement company development forecasts;
- providing advisory assistance to individuals who develop strategic plans;
- performing coordination work in drawing up various plans, determining the main ones and drawing up budgets;
- taking part in discussions and determining the parameters (qualitative and quantitative) of the work.
The accounting task includes the following:
- development of a structure for transmitting and receiving information;
- creation of an information support system to provide certificates, information and reports to persons responsible for a certain process in the management of the company;
- determining the need to supply managers or other responsible persons with the necessary information;
- comparison of plans and reports and preparation of interim reporting documentation that reflects the progress of plans;
- analysis of deviations from plans, identification of possible causes and development of proposals to prevent the influence of negative factors that led to disruptions in work.
The control task includes:
- monitoring the implementation of plans aimed at achieving strategic goals;
- monitoring the state of external environmental conditions interconnected with the development of strategic plans;
- monitoring weaknesses that were identified during planning or analysis of program implementation.
The task of organizing events for a special observation system includes the following:
- development of a regulatory framework for obtaining and providing information within the organization;
- development of measures that provide additional information and analytical support.
A special place in the system of personnel and resources is occupied by reporting. As a rule, traditional reporting implies an orientation towards the past and the presentation of factual data about past processes and phenomena, while reporting in controlling is oriented towards the future.
Thus, one can see that the organization of controlling at an enterprise contributes to the creation of processes in order to determine the consequences of certain management decisions. And we can also say that the introduction of controlling allows you to protect the company’s management from making rash or unprofitable decisions that entail the consumption of resources.
Methods
To accomplish all the assigned tasks when managing an organization, controlling involves the use of the following general scientific methods:
- analysis;
- deduction;
- induction;
- specification;
- abstraction;
- synthesis;
- analogy;
- modeling.
After the goals, objectives and methods of this area of activity have been considered, it is extremely important to dwell on its functions.
Functions
The controlling system at the enterprise includes such basic functions as:
- informational;
- accounting and control;
- analytical;
- planning function.
And also conditionally we can distinguish three functions, which will be a combination of the above - service, commenting and management.
Reasons for the emergence of controlling
At the turn of the nineteenth and twentieth centuries, many American managers in the process of managing organizations were faced with an urgent need to improve methods of economic accounting and financial control. The first attempts to improve the accounting system looked like this - enterprise managers assigned the chief financier and the company secretary the task of providing analytical information on economic and business issues. Thus, a close working relationship was formed between the financial service and the person who assists the main manager. Subsequently, it was found that due to the variety of information and the need for its detailing, it is more expedient to assign this task to individual officials. Thus, the introduction of controlling in the enterprise took place.
The following prerequisites for the emergence of controlling can be identified:
- global economic crisis;
- complication and tightening of the tax system for entrepreneurs;
- increasing complexity of financing forms.
The development of controlling as a branch of economic science is due to the following reasons:
- internationalization and differentiation of companies;
- changes in technologies involved in production areas;
- increasing complexity of the enterprise management system;
- complication of the external environment;
- the complication of communication processes for making management decisions, which entailed an urgent need for competent personnel in the field of systems engineering and organization.
Today, many managers of foreign enterprises note that after the creation of controlling departments at the enterprise, for example, the company’s income increased, the use of financial, human and other types of resources became more correct and it was possible to significantly reduce costs.
The controlling service in an organization faces a very serious task - to ensure the prompt collection and preparation of a detailed analysis of information on all available costs for the purpose of enterprise management. The director of the enterprise, the head of the financial service and the heads of production departments must receive information in a timely and regular manner so that in case of possible deviations they have time to take the right measures and adjust the work of the entire enterprise.
Concepts
Today, in the economic literature, the German and American concepts of controlling are distinguished. In general, these concepts are very similar to each other, but their main difference is that the first is more focused on considering the problems of internal accounting and analysis of the internal environment of the organization, and the second - on the problems of the external environment with which the company is closely interconnected.
It is worth noting that the German concept has gained wider acceptance. According to this concept, the central task is to solve internal accounting problems in a planned, control and documentary form.
The American concept also puts in the foreground the solution of issues related to the planned, control and documentary form of internal accounting, but here the central place is also given to solving the problems of assessing the external environment and its detailed analysis.
Tools
Controlling tools are a certain set of actions that allow you to perform certain functions and tasks. This toolkit can be classified according to the following criteria:
- period of action (strategic or operational);
- scope of application (depending on the tasks assigned).
In order to clearly understand what basic tools are used in controlling and under what circumstances they are best used, you should consider the table below.
| Application area | Tools | Validity |
| Business activity reports Accounting forms Accounting indicators Reporting analysis methods | Operational |
|
| Organization of information flows | Document management system | Strategic |
| Planning | Working with order volumes Break-even point analysis ABC analysis Analysis of the company's weaknesses Analysis of investment projects Discount analysis Analysis of sales and consumption structure Assessing the profitability of launching the production of raw materials for the manufacture of your own products Learning Curve Estimation Logistics methods Benchmarking Assessing the company's potential SWOT analysis Maps of perception Service quality assessment Gantt chart Inventory level calculation Capacity planning Pricing Barrier to Entry Analysis Network planning, etc. | Strategic |
| Monitoring and control | Timely warning system Cost Analysis Analysis of compliance of indicators (planned and actual) Gap Analysis | Strategic |
The issue of choosing tools in controlling must be approached with extreme caution. For example, for an organization that operates in an oligopoly or monopoly market, there is absolutely no point in using competitor analysis.
The above tools in financial controlling can significantly simplify the procedure for economic development and the preparation of planning and reporting documentation.
Strategic and operational controlling
There are two types of controlling, which differ in the period of their validity, as well as tasks and methods for solving them.
Strategic controlling is aimed at implementing long-term programs and strategies. Its goal is to form a clear planning system that will allow the company to be reliably managed, which will lead to increased profits.
A. Gelweiter (scientist-economist) in his works identified eight areas that strategic controlling should cover, namely:
- Determining the completeness of the company's plans, as well as their formal and financial content.
- Control over unstable conditions within the organization and in the external environment, which are related to the implementation of the company’s strategic plans.
- Control over the adoption of important decisions and their implementation, based on the aspect of deadlines.
- Monitoring the implementation of plans, especially at difficult or important stages of its implementation.
- Timely response to unfavorable external and internal conditions that can cause financial harm to the organization or give a by-product of activity.
- Monitoring the strategic situation of the company based on regular analyses.
- Checking the delineation of strategic units of the enterprise.
- Monitoring compliance with the defining principles of the enterprise that were previously defined.
The following tasks of this type of controlling can be distinguished:
- defining quantitative and qualitative goals;
- responsibility for planning;
- development of a system of alternative strategies;
- identification of critical points in the internal and external environment for a system of alternative strategies;
- identifying and managing the organization’s weaknesses;
- formation of a system of indicators;
- managing deviations and their indicators;
- motivation management in the institution;
- management of economic potential.
Operational controlling in an enterprise differs from strategic control in that it is aimed at helping managers achieve results from short-term goals. It is worth noting that its main task is to prevent a crisis in the organization and monitor the current process of implementing planned activities.
In order to understand the distinctive features of these two types, you should consider the table below.
| Signs | Strategic controlling | Operational controlling |
| Orientation | Internal environment External environment | Profitability Economic efficiency |
| Management level | Strategic (long-term) | Tactical and operational |
| Creating conditions for survival Carrying out anti-crisis measures Maintaining successful potential | Ensuring liquidity and profitability |
|
| Main tasks | Defining quantitative and qualitative goals Responsibility for planning Development of a system of alternative strategies Determination of critical points in the internal and external environment for a system of alternative strategies Identifying and managing organizational weaknesses Cost-benefit analysis | Methodological assistance in developing a budget Finding weak points for tactical control Determination of a set of controllable indicators in accordance with current goals Comparison of planned and actual indicators Determining the impact of deviations on the execution of current plans Motivation |
The relationship between operational and strategic controlling
These two types of controlling are integral parts of each other. The most important task of strategic controlling is to ensure the long-term existence of a particular enterprise, and operational control is the current planning and implementation of certain plans to make a profit.
The relationship between these two types can be represented in the form of the following sayings:
- “doing the right thing” is strategic controlling;
- “doing things right” is operational.
Thus, we can conclude that operational controlling is an integral part of the implementation of strategic control.
Implementation and organization of the service
If the head of an enterprise has decided to implement a controlling system, then he will first need to make changes to the organizational structure and create a service (department), which must be directly subordinate to the general director or chief executive. The controlling service may include the following specialists:
- head of service;
- controller-curator of workshops (divisions/sections/departments);
- management accounting specialist;
- information systems specialist.
If production volumes or the size of the organization is small, then you can combine the functions of these areas and eliminate one position.
For proper organization of work when implementing such a system, job descriptions should be prescribed for each specialist, the functionality of which will be determined based on the needs of the enterprise.
Every manager, especially those of enterprises located in post-Soviet territories, must remember that the introduction of innovative management methods can cause criticism from staff, and in some cases, complete rejection. Therefore, before launching the controlling service, it is necessary to present innovations and bring to the attention of all employees the main tasks, goals and main functions that this structural unit will perform.
It is also worth noting that the implementation of such a service should be phased and include a preparatory stage at which the state of the enterprise is studied, then the implementation itself, and finally the automation stage, if necessary.
Conclusion
In general, controlling reflects a huge range of scientific economic and management disciplines - management, strategic planning, cybernetics, economic theory, and so on. Thanks to this, a professional manager or a team of several specialists entrusted with the controlling function are able to solve production, economic and personnel issues, taking into account the versatility and wide range of issues of this activity. That is why the presence of an established controlling system at an enterprise makes it possible to solve and often anticipate problems, which, in turn, leads to a timely response and minimization of various costs and serious financial losses.
How to organize a controlling service at an enterprise and choose the optimal model for organizing a controlling service
Alexey Medvedev,
Head of the Consulting Department of the INTALEV Group of Companies
AS IT HAPPENS
First, let's look at the form in which controlling is most often found in Ukrainian business today. Figure 1 shows the relationship between the most typical cases (the diagram is based on my observations and project experience).
In most companies There is no controlling service at all. There are some of its functions (budgeting, financial analysis, etc.), but we are not talking about the system. Many people don’t need such a service (not functions!) at all. For example, if the business is small (10-20 employees) and the owner is directly involved in operational activities, then he himself performs all controlling functions.
Another option is when controller is called imaginebody of shareholders or owners. They stop being involved in operational management, but do not want to leave the company unattended. Therefore, they appoint a close person (usually a relative) to “look after the business.” Most often, he is vested with great powers, but is not responsible for the efficiency of the business. In one company where we built a cash management service, all payments were approved by such a controller. He could reject any application for payment, postpone it, or reduce the amount. At the same time, responsibility for failure to fulfill obligations under this payment remained with the applicant (the one who initiated the application for payment). The situation was aggravated by the fact that this controller was not a specialist in either finance or economics; he acted intuitively, sometimes without even explaining the reasons for this or that decision. Overall, it only hurt business.
In some companies The controller is called the treasurer. The main task of the treasurer is to control the movement of money and payments (compliance with the budget, correct distribution across the Central Federal District, etc.). This employee cannot perform controlling functions in full; he only has data on cash flow and income/expenses. For example, he does not have information about non-financial indicators: customer satisfaction, order fulfillment times, speed of response to requests, changes in market conditions... Essentially, in this case, the treasurer takes on part of the controlling functions related to money, and when identifying critical deviations are reported to management. It also happens: an employee was appointed controller or even a division was created, but no one knows about it. On instructions from management, people collect some data, analyze it, prepare reports, etc. Difficulties arise from the very beginning: departments that have the necessary information are in no hurry to share it. And the employees who are entrusted with such tasks do not have the authority to introduce new management systems or initiate changes in the organization. This situation will not cause damage only if the decision on the optimal use of available opportunities (based on the data obtained) is taken by the head of the company - while the controlling group plays only the role of extras, collecting information. And finally, the rarest situation is when the company has a full-fledged controlling service . As a rule, this is a business with Western investments or created according to a Western model. There are not many such examples in Ukraine yet.
REASONS FOR CREATION OF A CONTROLLING SYSTEM AT THE ENTERPRISE
When creating a controlling system, the question arises “why?” We will not dwell in detail on the goal - “to control the business so that they do not steal.” Although it is relevant, it is only the initial level in building a controlling system. In world practice, its main purpose is to help managers make decisions, prevent management errors in a timely manner, objectively assess the company’s strengths and weaknesses, and identify opportunities and risks.
What can be the object of controlling? There are many options, and each organization chooses something important for itself: strategy, quality of products and services, finance, technology... Entire areas of management become objects of controlling: logistics, personnel, customers, marketing, suppliers, investments, etc. There are different tools (methodological and technological) for managing these objects: management, accounting and tax accounting, budgeting, financial and economic analysis, quality management system, knowledge management, supply chain, ERP systems, etc. And the most important task of controlling is to integrate all these objects and technologies into a single system, into a business management console. Why do difficulties usually arise with organizing a full-fledged controlling service? There may be several reasons.
|
STAGES OF BUILDING A CONTROLLING SERVICE If the decision to create a controlling service has been made, here are the steps that will need to be taken:
|
- LACK OF QUALIFIED PERSONNEL. In our institutes there is no such specialty as “controller”, and even in business schools you will hardly find specialized courses on controlling. The main difficulties arise when trying to find a “universal soldier” for the controlling service. In addition to the basic requirements for such employees (knowledge of economics and finance, and budgeting, the ability to work with various information systems), experience in business and an understanding of the processes occurring in the company - from accounting to marketing, sales and production - are also important. If at least one component from this set is missing, that is, there is no holistic vision of the business, then the controller’s decisions and recommendations will most likely be superficial or too local.
To overcome all these difficulties, you need:- competently design a controlling service and integrate it into the company;
- select qualified personnel, form a team;
- implement a comprehensive information system.
IT IS DIFFICULT TO INTEGRATE A NEW SERVICE INTO THE EXISTING STRUCTURE. Companies already have an established pattern of information ownership, interaction between departments, and a hierarchy of power. And any attempts to change them encounter stiff resistance from people. Thus, the finance department is afraid to reveal numbers so as not to lose its power over the business. The IT director also does not agree that anyone other than him has extensive access to information. As a result, the very idea of controlling fails.
NO TOOLS REQUIRED. For the full-fledged operation of the controlling service, a comprehensive information system is needed, including management accounting, personnel management, strategy management, CRM, operational accounting, etc. Companies usually have several disparate information systems. If everything is left like this, the controlling service will do nothing but look for information in different systems, try to consolidate and structure it. As a result, when a certain report is made, it turns out that the user no longer needs it.
MODELS FOR BUILDING A CONTROLLING SERVICE
There are several schemes for building a controlling service. And for every business, every situation and goal, some of them are better than others. Let's see how to choose the optimal scheme specifically for your case.
So, the first option is CREATION OF A COLLEGIAL BODY from employees of different departments, which meets periodically (Fig. 2). Its functions and tasks may change depending on what new projects the company launches or what problems it faces. For example, such a group may include heads of sales, marketing and production departments. Their main task is to analyze the company’s performance for the month (what financial indicators it ended with, how many complaints were received, what new competitors did in the market, what marketing steps we took, etc.) and develop solutions to improve the situation. Or another approach: once every two weeks, a group consisting of specialists from the planning department, financial and accounting departments gathers to study problems and find solutions in the field of analytical work. The formal results of such meetings are usually protocols with the decisions made. This scheme for organizing a controlling service is suitable for small companies with one type of activity, not geographically dispersed, which employ up to 50 people and have implemented a KPI system, at least in a simplified form. It is also suitable for organizations operating in a stable economic environment, whose business is following a well-established path (it is probably difficult to find such markets now). But this approach will definitely be ineffective in large, geographically distributed companies with different areas of business. (The disadvantages and advantages of this and other models are listed in Table 1.)
Table 1. MODELS OF ORGANIZATION OF CONTROLLING SERVICE
|
Models |
Advantages |
Flaws |
|
Temporary group of representatives from different departments |
|
No responsibility for deadlines and results |
|
Work proceeds slowly, according to the residual principle |
|
|
Low status, ignored by units |
|
|
Problems with work coordination |
||
| Service subordinate to the general director or supervisory board |
|
|
|
|
|
|
|
|
|
||
|
Division within the financial department |
|
|
|
|
|
|
|
A service organized according to this principle will easily cope with periodically arising tasks within the framework of the controlling system. For example, if problems arise in the supply of raw materials (not on time, poor quality), you need to decide what to do next with the supplier. The purchasing service cannot make such a decision on its own, since this process is related to production, finance, and sales. A group of representatives of the listed departments gathers, analyzes the current state, identifies the causes of failures, develops an action plan and recommendations on how to avoid this in the future. Once the problem is resolved, there is no need for the control group to work. And if other problems arise, the group gathers again.
But a temporary controlling group will not cope with the tasks of operational (daily) and strategic controlling. After all, analytics and work on continuous improvement processes must be systematic and constant; it requires responsibility for deadlines and results. If the members of the temporary group are set up for daily controlling, then efficiency in their main areas for which they are responsible will certainly suffer.
Understanding that the group will perform its functions periodically, not systematically (in fact, on a residual basis), it is necessary to optimize the scheme of its work as much as possible.
We recommend appointing a person with great managerial powers and authority in the company as its leader. Thanks to this, the group's decisions and proposals will have a higher status. It is also worth appointing a person responsible for regulations in the group. His functions will include not only drawing up reports (protocols), but also monitoring the implementation of approved decisions. That is, he is responsible for all organizational procedures - from the moment the group gathers to the implementation of the decision it makes.
Second option - CREATION OF A SEPARATE CONTROLLING SERVICE, which will report to the CEO or supervisory board. This scheme (Fig. 3) is used in organizations created according to the Western business model. It works well in large companies (with 3-5 thousand employees), which are owned not by two or three people, but by a group of shareholders. It is also suitable for businesses with a divisional organizational structure. In this case, controllers are something like external auditors, but they work on a permanent basis, have significant rights and are on staff. It hardly makes sense for small private companies to form a controlling service according to this model. The costs of creation and maintenance may be significantly greater than the effect of its work.
A separate department will cope well with the tasks of strategic and operational controlling. And he will also act as an intermediary between the company and its shareholders. It seems to work for two camps. On the one hand, it ensures the systematic development of the business, leads the process of continuous improvements, constantly monitors its condition (for example, through KPI indicators), assesses the risks and opportunities of the external environment, offers new management technologies and helps to implement them. On the other hand, in every decision the interests of the owners (shareholders) are taken into account; in many ways, they are the customers who order the work of this service. In this case, representatives of the controlling service “enter” almost any processes of the company. At first, this may cause resistance from department heads (and employees). Therefore, pay special attention to the process of creating a service: highlight it as a separate project in the company, involve key stakeholders in its construction and adaptation (especially those who could potentially be in opposition), write down the work regulations, powers, tasks, etc. It is important that so that the decisions and actions of this service are not a formality, but actually help the work of employees and the company as a whole.
If you create a controlling service using this model, you can additionally include the following divisions:
Automation department. We are often asked who the development department (not the IT department) should report to. Functionally, he is closer to the IT director, who is more involved in information security issues, hardware provision, etc. At the same time, most of the tasks for finalizing the information system come from the financial department, accounting department, that is, in theory, the development service should be subordinate to financial director But the CFO has slightly different tasks than supervising the development department. Therefore, when the company has a controlling service, the development department will fit harmoniously into it.
Business Process Optimization Department. Increasingly, such divisions or individual employees appear in companies. And, as a rule, management does not know where to “stick” them in the organizational structure - either with the administration, or with the HR department, or with the development department. One of the functions of controlling is process optimization, so it is logical to include a department with this name in this service.
Internal Audit Department. Its inclusion in the controlling service is also logical, since it performs a similar function - representing the interests of shareholders.
The third model assumes SEPARATION OF A CONTROLLING SERVICE WITHIN THE FINANCIAL DEPARTMENT(Fig. 4). This is the most successful scheme for most Ukrainian companies. Such a service deals with controlling tasks not by chance, but by obligation. In this case, there is no need to maintain and include a separate department in the organizational structure. This approach will be most effective if the company has implemented strategic management - goals for 2-3 years have been developed, strategic and tactical KPIs are monitored. Without a controlling system, it will be difficult to assess the achievement of goals and promptly make adjustments to plans. This scheme will also be effective in vertically integrated companies. One of our clients has a controlling service organized exactly like this - his business includes production, logistics, distribution and retail sale of one final product. And, although the scale of activity is not very large, a management company has been created. In its financial department, controlling functions are centralized in all areas. This allows you to set goals and track indicators that will be focused on the performance of the business as a whole (and not its individual parts).
If the controlling department is created structurally on the basis of an existing division, it is best to use the budgeting, planning or economic planning department as the base one. If you decide to take another department as a basis, be prepared for resistance from the economic planning department, since you will take away some of its functions. The controlling department in such a model should be staffed with 2-3 employees (not to replace economists with controllers, but rather to staff it).
The controlling department in the structure of the financial department performs the following functions (enlarged):
- Creation and control of a system for collecting operational information.
- Drawing up high-quality analytical reports with the required depth of detail.
- Development of pricing recommendations.
- Improving the document flow system.
- Assessing existing automation systems, the feasibility of automating individual areas, setting automation tasks.
- Forecasting revenue, costs and profits using controlling techniques.
- Methodological support for economic analysis and evaluation of investment projects.
- Economic examination of management decisions.
- Direct participation in the development and implementation of the company's strategy.
Thanks to the high status of the financial department, which includes the controlling service, its employees have the opportunity to influence the company's strategic decisions. They are not afraid to offer original ideas and steps.
But this model of organizing a controlling service is not suitable for companies whose owners do not trust their financial service. After all, setting tasks and conclusions will go through the filter of the financial department. Therefore, one of the key conditions here is trust on the part of the owners.
Modern practice of organizing controlling has created a number of ways to create special controlling services or delegate controlling functions to existing management services of the enterprise. As a rule, operational and strategic controlling services are separated into independent divisions of the organization. With this distinction, it is necessary to ensure coordination and coordination of the activities of operational and strategic controlling services in order to achieve methodological unity of the functions performed. More advanced forms of organizing the controlling service are characteristic of large enterprises.
In the structure of the controlling service, there is an official responsible for all activities in the field of controlling - the main controller. If the organization does not have a specially created controlling service, then the duties of the main controller are performed by the head of the entire enterprise, one or more heads of structural divisions. In the context of small and medium-sized businesses, there are often no objective conditions for implementing a controlling system in full in compliance with all principles of its organization. In these cases, the functions of the main controller are assigned to top managers or those responsible for the accounting and financial sphere of management. At the same time, controlling functions are often limited to solving problems of coordinating different areas of management activities. Different countries have different traditions for appointing the main controller. The main controller may be subordinate to such departments as accounting, planning and forecasting department, information and computing department, statistics department and other economic services of the enterprise.
An essential condition for increasing the efficiency of controlling at Russian business enterprises is the preparation of scientific and methodological developments that define a standard model of the controller’s job functions. A basic document of this nature already exists. This is a version of the controller mission developed and approved in September 2002 by the International Group of Controlling. This document states that controllers organize and support the process of goal setting, planning and enterprise management. Thus, the controller belongs to the group of officials responsible for achieving the goals of the enterprise. The controllers perform this mission by solving the following set of tasks:
¦ ensuring transparency of information about production results, financial condition, and strategies of the enterprise;
¦ coordination of private goals and private plans that constitute elements of the company’s unified strategic plan;
¦ formation of areas of responsibility for employees involved in decision-making; thereby ensuring higher efficiency in the implementation of strategic goals;
¦ providing an organizational and methodological basis for solving problems of economic monitoring and providing other functions for collecting primary information;
¦ support and encouragement of innovative solutions in key areas of management at the enterprise, including stimulation of a process approach to management (the ability to “go beyond” a specific private function).
The need to implement controlling functions is most felt in large enterprises that represent a complex economic system that requires more advanced management tools. The specificity of the controller function is that it is focused on “setting up” the planning, control, and information support system to achieve the goals of the enterprise. Large enterprises have the resources necessary to create controlling services as a specialized structural unit in the organization's management system. When forming them, it is important to follow a number of principles and rules:
¦ an overly complex organizational structure of the controlling service should be avoided;
¦ it is important to choose the most appropriate type of organization of the controlling service for a given enterprise (centralized, decentralized);
¦ regardless of the way the controlling service is organized, it is important to provide incentives for independence and initiative in the work of controllers;
¦ the controlling service must be directly subordinate to the owner and (or) manager of the enterprise;
¦ the controlling service must be officially granted the right to receive all economic information necessary for work and comments on it from all divisions of the enterprise and from all officials;
¦ the controlling service must be provided with the status of an independent, independent division of the enterprise.
The most typical ways to organize a controlling service are a centralized and decentralized scheme for its construction. With a centralized controlling service, it is headed by the main controller, who is directly subordinate to the management of the enterprise. With a decentralized model of the controlling service, part of the functions of the controlling service is transferred to other departments of the enterprise. Key controlling functions in areas such as marketing, logistics, foreign economic relations, resources, etc. remain subordinate to the main controller.
For Russian business, the creation of a controlling service is a new direction in the organization of enterprise management. Despite all the obvious prospects of controlling, its implementation in the practice of Russian enterprises is happening at a slow pace, which is due to a number of objective and subjective reasons:
¦ the influence of the psychological factor, manifested in inertia and indecisiveness when mastering new methods of enterprise management, has a negative impact;
¦ the shortage of highly qualified specialists in the field of controlling plays a significant role;
¦ often heads of organizations do not have information about the benefits and content of controlling;
¦ the potential capabilities of controlling cannot be sufficiently realized in the conditions of the predominant orientation of enterprise management on short-term activity planning, which is associated with the instability of the general situation in Russia;
¦ many enterprises do not have sufficient material, labor and financial resources necessary to organize a controlling service;
¦ there is insufficient provision of scientific and methodological developments and practical recommendations in the field of controlling; there is no standard model for organizing controlling at an enterprise.
Despite the listed difficulties and problems, there is an objective opportunity and need to spread the practice of controlling in the field of business management. The main argument in favor of this can be the significant economic effect that the controlling service provides. Factors such as the publication of methodological developments for top managers on strategic and operational controlling, the inclusion of the discipline “controlling” in the curricula of economic universities, support for the idea of mastering controlling as a management tool at the level of state regulation of economic relations can play a certain role in the development of controlling methods. in the field of business. It is also important to determine unified regulations for the controlling service and develop a standard model of a controller specialist. According to the definition of leading foreign experts in the field of controlling, a controller is a specialist who implements the functions and tasks of controlling at an enterprise and is capable of creative analytical work. A controller, as defined by Elmar Mayer, is the one who learns more than others, is able, knows, thinks systematically and acts in harmony with the environment, focusing on the goals and the future in order to successfully manage the enterprise.
A professional controller must be a high-class specialist in the field of management. Accordingly, the following requirements are imposed on the controller:
- 1) possession of professional abilities and knowledge in the field of economics and management (for example, mastery of planning methods and tools, the ability to conduct comprehensive economic analysis, the ability to work with information, etc.);
- 2) knowledge of controlling methods and techniques;
- 3) possession of abilities and interest in creative activities;
- 4) mastery of the basics of “organizational behavior”;
- 5) presence of motivation to work in the field of controlling.
Introduction………………………………………………………………………………………...3
Chapter 1. Controlling service at the enterprise………………………………...5
1.1. Creation of a controlling service at the enterprise…………………….…..5
1.2. Structure and composition of the controlling service……………………………......8
1.3. Controller, its functions and responsibilities……………………………...12
1.4. Organizational model of the information service for economic calculations in the implementation of controller functions………………….…..14
Conclusion…………………………………………………………………………………..20
List of references………………………………………………………......21
Introduction
This topic is quite relevant, since the features of the modern development of Russian enterprises in various fields are characterized by the fact that a dynamically changing environment becomes a constant source of new opportunities and dangers, and therefore managers make management decisions in conditions of a high degree of uncertainty, as well as limited freedom of action , resulting in a decrease in the efficiency of management activities. For the successful functioning and progressive development of a commodity manufacturer, it is of particular importance to introduce into management practice controlling and the corresponding methodological tools that would help modify the existing management system in such a way as to promptly take both preventive measures to phenomena that threaten the existence of the enterprise and promptly respond to new ones. positive opportunities offered by the external environment.
Despite the fact that the phenomenon of controlling has a long history of occurrence in world management practice, in our country at present controlling is not widespread due to the lack of elaboration of many issues of a theoretical and applied nature.
At the same time, the high level of instability, hyper-competition, and the complication of the problems of industrial enterprises in the Russian economic system are causing an increase in the importance of controlling, thanks to which it will be possible to eliminate errors, miscalculations and unfavorable deviations to the maximum extent in both the present and the future of commodity producers. In this regard, research aimed at improving the theoretical and methodological base, developing organizational and methodological foundations for controlling at domestic enterprises is of particular relevance.
Chapter 1. Controlling service at the enterprise
Creation of a controlling service in an enterprise
Since the main task of the controlling system is to analyze information, we can say that the main resource for carrying out this work is people (employees of a particular organization). Yes, it is the organization’s employees, since they must constantly be in the company, know the situation in which the organization is at a particular point in time, regularly receive and analyze all the information coming to them.
So, to organize the work of the controlling service, analysts (specialists) are needed in order to study, first of all, the horizontal connections between the subsystems of the management system and the vertical connections between the subsystems and elements of the management system. Or rather, to explore the flow of information between them.
For the controlling service to operate effectively, it is necessary that all information is transferred to the controlling service;
The controlling service is included, along with the accounting department, financial department, and economic planning department, in the financial and economic services of the enterprise. Since the main function of controlling in an enterprise is the analysis and management of costs and profits, the controlling service must be able to obtain all the information it needs and translate it into recommendations for making management decisions by senior managers of the enterprise.
When creating a controlling service at an enterprise, the following basic requirements must be taken into account:
1. The controlling service must be able to obtain the information it needs from the accounting department, financial department, economic planning department, sales service and logistics service;
2. The controlling service must have the opportunity and authority to organize, with the help of other economic services, the collection of additional information required for analysis and conclusions, but not contained in existing documents of financial and economic services;
3. The controlling service must be able to implement new procedures for collecting analytical information on an ongoing basis. The issue of paying compensation to employees of other services for increased workload should be decided by the managers for whom the information from the controlling service is intended;
4. The controlling service must be able to quickly bring information to the attention of senior management of the enterprise;
5. The controlling service must be independent of one or another financial and economic service. There is no standard template for the organization or structure of the controlling service. It all depends on the organizational structure of the enterprise, the type of activity (work, services), etc. But the most important thing on which the organization and structure of the controlling service depends is the desire of the manager, that is, what the manager wants to receive from the work of the controlling service, what place he assigns to this service in the enterprise.
The controlling service may consist of two, three people, ten, twenty, or may be separate independent services that function independently of each other, but are subordinate to the main controlling service (main controller). Let's consider these options.
If the enterprise is not part of a corporation, then the organization of a controlling service can begin by attracting 3-4 highly qualified people to such work, who will perform the role of an analytical service and provide managers (financial director, commercial director) with operational information about the state of costs in the enterprise, compile analytical reports, forecast indicators of the financial and economic situation of the enterprise, calculate the economic efficiency of management decisions related to costs and profits, establish planning methods in the economic planning department.
Then the controlling service can be expanded, thereby increasing its influence, for example, by assigning its own controller to each workshop (department, team), who will monitor and analyze deviations of actual operating parameters (primarily costs) from the planned ones. Such an organization of the controlling service exists in many large European industrial companies, for example, in the Fiat concern in Italy.
As for the organization of the controlling service in a corporation (holding), a controlling department must be formed at each enterprise. Moreover, these services are managed from the parent (management) company.
So, it is clear that the controlling service must have access to all information, right down to the elements of the management system. Therefore, this service must occupy a worthy place in the organizational structure of the enterprise; it must have a wide job field in order to be provided with information. In addition, the information provided by the controlling service is necessary only for the manager (financial, commercial director) to make operational management decisions.
Therefore, the controlling department should receive a high status and independence from other financial and economic services. And, therefore, this service is best subordinated directly to the head of the enterprise or the financial (commercial) director. And in this case, the controlling department stands on the same tier with the financial department, economic department, sales department, purchasing department, accounting and other departments. Moreover, the controlling service is placed in a somewhat privileged position, since by order of the Deputy General Director for Economics (CFO), other services undertake to provide the controlling service with all the necessary information.
In recent years, controlling has occupied a special place among cost management concepts in enterprises of industrialized Western countries. This can be confirmed by the growing number of publications devoted to the study of controlling problems and giving it extremely important importance in the management system of a modern enterprise. However, it should be noted that to date there is no unambiguous, generally accepted interpretation of the concept of controlling.
In a number of studies, controlling is considered as a system for managing business activities and profits, within which two main functions are distinguished: control and. This was reflected in the work of the German researcher D. Hahn.
In a number of works, the concept of controlling has become widespread, in which its main function is the coordination of the management system as a whole to ensure actions aimed at the target. At the same time, to date, in the industrialized countries of the West, three main concepts of controlling have taken shape, due to its functional purpose and institutional design:
Controlling with a focus on the accounting system;
Information-oriented controlling;
Controlling with a focus on coordinating the activities of the enterprise.
The concept of controlling with a focus on the accounting system is associated with the implementation of information goals through the use of accounting data in the enterprise. The main focus is on cost indicators. It is primarily about ensuring profitability.
In other words, the controlling concept in question can be characterized as profit-oriented. However, it is limited to a certain extent, since it is based only on accounting data. As a result, the controlling concept, focused on accounting data, meets mainly the needs of the operational activities of the enterprise and only partially meets the strategic goals of its development.
The concept of information-oriented controlling involves not only the use of accounting data (quantitative information), but also qualitative information directly related to the economic activities of the enterprise. According to this concept, the main task of controlling becomes information support for management decisions made by the management of the enterprise. It must support the internal management process through targeted selection and processing of information. This controlling concept provides for the inclusion of a wide range of information tasks in the enterprise management structure. However, solving this problem in practice is quite difficult.
The concept of coordination-oriented controlling is based primarily on the distinction between a control system and an execution system. According to this concept, primary coordination of the execution of management decisions is the task of the management system itself, and secondary coordination within the management system relates to controlling.
Moreover, coordination tasks within the framework of this controlling concept are divided into two levels:
Orientation towards planning and control;
Focus on the management system as a whole.
At the same time, most foreign and domestic studies agree that controlling is a new concept of enterprise management, which is based on the desire to ensure its successful operation in the long term. This can be achieved through:
Adaptation of the system of strategic development goals of the enterprise to constantly changing environmental conditions;
Formation of an information support system for the process of strategic planning and management at the enterprise;
Coordination of the operational plans of the enterprise with the strategic plan for its development;
Formation of a system for monitoring the process of implementing the strategic development plan of the enterprise and adjusting its content;
Flexibility of the organizational structure of enterprise management in order to increase its ability to quickly respond to constantly changing environmental conditions.
As most foreign and domestic researchers believe, the main reason for the emergence of controlling can be called the need for the system to integrate all aspects of the management process within the enterprise. In this regard, controlling is intended to provide a methodological and organizational basis for supporting the main functions of management activities in an enterprise (analysis, forecasting, planning, accounting, control).
The main tasks of controlling are presented in Fig. 10.1.
Thus, controlling is focused on supporting the process of making management decisions at the enterprise. It is designed to adapt the traditional system of accounting and control at an enterprise to the modern needs of its management, i.e., controlling functions should include the creation, processing, verification and presentation of systemic management information.
In general, the functions of controlling are directly determined by specific types of management activities within the enterprise, which ensure the achievement of the set development goals of the enterprise, including strategic ones. The main functions of controlling are summarized in table. 10.1.
Consequently, according to the majority of foreign and domestic researchers, the modern concept of controlling should focus on the enterprise management system as a whole. It must coordinate the planning, control and information support subsystems.
Rice. 10.1. The main tasks of controlling in an enterprise
Table 10.1
The main functions of controlling in an enterprise
| Controlling functions | |
| Accounting | Justification, development and maintenance of an internal accounting system at the enterprise; Unification of criteria and methods for assessing the activities of both the enterprise as a whole and its individual structural divisions |
| Planning | Providing information support for the process of strategic and operational planning within the enterprise; Coordination of the process of information exchange in the process of management activities at the enterprise; Improving the content and structure of strategic and operational planning systems at the enterprise; Coordination and coordination of strategic and current development plans of the enterprise; Development and subsequent adjustment of methodological approaches to assessing the reliability and realism of the developed strategic and current development plans of the enterprise |
| Control | Justification and selection of indicators (parameters) of strategic and current plans, controlled in terms of content and time; |
| Comparison of planned and actual values to assess the degree of achievement of the goals of the strategic development plan of the enterprise; And assessment of emerging deviations from the parameters of the strategic plan, identifying the reasons for deviations of actual indicators from planned ones, developing proposals to prevent such deviations |
|
| Information and analytical support | Development of the content and structure of information support to monitor the process of implementing the strategic development plan of the enterprise; Standardization of information flows, media and communication channels within the enterprise; Providing information that allows monitoring the progress of implementation of enterprise development plans; Collection and systematization of the most significant indicators (parameters) used in the process of assessing the degree of implementation of enterprise development plans; Justification and development of tools for planning, control and management decisions within the enterprise; Ensuring the efficient functioning of controlling information support |
| Special Features | Collection, systematization and analysis of information about the state of the enterprise’s external environment; Carrying out a comparative assessment of the enterprise’s performance in comparison with its competitors; Carrying out calculations to assess the effectiveness of investment projects carried out within the enterprise |
The degree of implementation of controlling functions at enterprises depends mainly on the following factors:
Socio-economic situation of the enterprise;
Understanding by the management of the enterprise of the importance and usefulness of implementing controlling;
Enterprise size (number of employees, production volume);
The level of qualifications of the enterprise’s management personnel;
Product ranges;
Level of production diversification;
The current level of competitiveness of the enterprise;
Level of qualifications of employees involved in controlling.
It should be noted that in recent years, for most industrialized Western countries, controlling services (mainly in large companies) or the services of contracted expert controllers are quite common. Moreover, in these countries the concepts of controlling are largely similar. The existing differences relate mainly to the understanding of two main points: pragmatism and the degree to which the system can be improved in accordance with the mentality of the users. For example, in the USA, a pragmatic approach prevails: controlling is closely related to management and is more focused on market requirements and customer needs.
In Germany, in turn, the prevailing trend is academization, which involves the initial formation of a theoretically integral controlling system, and then a gradual transition to solving specific problems.
In our country, interest in controlling began to appear in the early 1990s in the conditions of reform of the Russian economy. At the same time, only isolated examples of the use of controlling are known in Russia.
Thus, in modern conditions we can talk about significant potential for the development of the controlling concept and the possibility of its further clarification. In this regard, the development of theoretical and practical foundations of the domestic concept of controlling is of exceptionally important scientific and practical importance.
It seems to us that the main drawback of all existing controlling concepts can be considered the idea of combining the functions of planning and control, which is to a certain extent explained by a lack of understanding of the content of planned activities within the enterprise. Planning even at a medium-sized industrial enterprise is a rather complex and multifaceted activity, which involves a large number of different types of specialists. Therefore, the transfer of planning functions to the chief controller, as suggested by foreign researchers in the field of controlling, will in practice only lead to disorganization and a decrease in the quality of planned work at the enterprise. In this regard, combining the functions of planning and control seems unfounded and inappropriate. In our opinion, controlling within an enterprise must perform its own functions related to monitoring and evaluating planned decisions and preparing, on this basis, specific proposals for adjusting planned parameters (benchmarks). According to this approach, controlling should
wives represent a continuously functioning system of control over the process of development and implementation of plans at the enterprise, including strategic plans.
Therefore, the main function of controlling should be the control process.
The main elements of the control process at the enterprise are shown in Fig. 10.2.
It seems that control within the enterprise is designed to identify problems in advance and adjust the activities of the enterprise before these problems develop into crisis situations. Consequently, one of the most important reasons for implementing the control process is that any enterprise must certainly have the ability to timely record errors in its activities and correct them before they interfere with the achievement of the enterprise’s development goals. It should be noted that errors and problems that arise when analyzing the situation within an enterprise are intertwined, if they are not corrected in time, with errors in assessing the future conditions of the functioning of the environment and human behavior.
Even more common may be a situation in which an enterprise operates constantly moving from one crisis situation to another. Moreover, it should be noted that in business this state of affairs is considered quite acceptable. At the same time, it is quite clear that from time to time a crisis situation at an enterprise can develop quickly enough for the management of the enterprise to immediately register it and develop an appropriate line of behavior. However, in most cases there is no need to constantly resort to crisis management methods.
Rice. 10.2. The main elements of the process of monitoring the progress of implementation of development plans at the enterprise
In addition, it is necessary to especially note the positive side of the control process at the enterprise, which lies in the full support of everything that is successful in the activities of the enterprise.
By comparing the actual results achieved by the enterprise with the planned ones, management is able to determine in which areas of activity the organization has achieved certain successes and where it has failed. In other words, one of the most important aspects of control is to ensure that the determination of the directions of the enterprise’s activities most effectively contributes to the achievement of the main goals of its functioning and development. Thus, by identifying and assessing successes and failures in the activities of the enterprise and their causes, management is able to quickly adapt activities to dynamically changing environmental conditions and provide conditions for progress towards development goals.
The control process at an enterprise must be comprehensive, covering all possible elements of management activity. It cannot be the prerogative of only the manager and his assistants who perform these functions, i.e., “controllers.” Every company manager, regardless of his rank, exercises control as part of his job responsibilities. In this regard, neither planning, nor the formation of organizational structures, nor motivation, etc. are considered in isolation from the control process.
The organization of a control system at an enterprise should be based on a number of principles:
Systematicity;
Efficiency;
Efficiency
Ease of use;
Economical;
Continuity.
In general, the control process within an enterprise includes the following stages.
1 stage. Formation of a system of controlled parameters.
2 stage. Carrying out a control assessment.
3 stage. Making decisions based on control results.
At the first stage of control, the composition of the controlled parameters (standards) is selected and their actually achieved values are determined. This stage of control demonstrates how closely the functions of planning and control are interconnected within the framework of management activities at the enterprise. The choice of controlled parameters follows directly from planning goals. Moreover, goals that can be used as standards for control must meet two basic requirements.
Firstly, they can only be used within a certain time frame corresponding to the period of development of the plan.
Secondly, the controlled parameters should be quantitatively measured whenever possible. In this case, in the process of monitoring, it is advisable to use performance indicators that characterize the degree of achievement of planned goals. The use of such indicators in practice allows enterprise managers to compare the actual achieved performance results with the planned ones. However, this task is very complex, since not all goals of the functioning and development of an enterprise can be expressed numerically. It is fairly easy to define performance indicators for quantifiable quantities such as profit, sales, costs, etc. At the same time, it is not possible to express some goals for the functioning and development of an enterprise numerically. In this case, it is advisable to use indirect indicators. For example, a small number of layoffs in a company can be used as a performance indicator when developing job satisfaction standards. However, the danger of using indirect indicators is that they themselves may be influenced by completely different factors that do not directly affect the controlled parameter. For example, a small number of layoffs at an enterprise may not reflect a high degree of job satisfaction, but the general crisis state of the economy. In other words, people may stay in a given job not because it satisfies them, but because it is difficult or almost impossible for them to find another job. In this regard, it is very important to learn to separate random factors from the true causes of a particular phenomenon.
It should be noted that the inability to express a performance indicator in quantitative form cannot and should not serve as an excuse for not establishing benchmark standards at all. You cannot effectively control without a performance indicator. The inevitable consequence of the absence of such an indicator is management “by inspiration”, which in fact is not management, but represents a simple reaction to a situation that has gotten out of control.
As evidenced by the experience of Western industrialized countries, a number of successfully operating enterprises have encountered quite complex problems due to the fact that their management has not had time to establish performance indicators in such difficult-to-measure areas as social responsibility and organizational culture.
The innovation sector (R&D) is particularly difficult to establish performance indicators. To date, attempts to propose approaches to measuring performance in this area of activity have been largely unsuccessful. Traditional indicators used in this field of activity are the number of patents, publications, reports and completed projects. However, these indicators do not allow us to assess the focus of R&D and the usefulness of its implementation for the enterprise. In other words, they do not answer the question: do all these patents, publications, projects, etc. serve the desire to diversify the enterprise's activities or penetrate new markets?
In recent years, in most enterprises of industrialized countries, the most widely used indicators that are used in the process of monitoring and evaluating the results of scientific research and development are “achievement of enterprise development goals” and “percentage of work accepted and approved by the enterprise.” These indicators, combined with performance indicators to a certain extent, make it possible to establish that R&D is not only effective, but also useful for the enterprise.
At the second stage of the control process, there is a comparison of the actually achieved results of the enterprise’s activities in various areas with the established control standards. At this stage of the control process, the management of the enterprise must answer the question: to what extent do the actually achieved results of the enterprise’s activities correspond to those planned? In addition, at this stage it is also advisable to assess the extent of deviation from control standards. This kind of assessment can and should serve as the basis for developing a program of measures to adjust the enterprise development plan. The activities carried out at this stage of the control process are the most important part of the entire control system. This should involve identifying and assessing the extent of deviations from reference standards.
At the same time, it should be noted that at this stage, determining the scale of permissible deviations becomes extremely important. If the scale of deviations is chosen too large, then the problems that arise can lead to very unfavorable situations for the enterprise. And on the contrary, if the scale of deviation is chosen too small, then the control system will disorganize the work of the enterprise and rather hinder than facilitate the achievement of its development goals. In other words, in this case a fairly high degree of control will be achieved, but the control process will be expensive and ineffective. A typical example of such a situation is where in order to make a management decision it is necessary to go through many bureaucratic authorities. Many government programs often turn out to be ineffective due to the fact that a significant share of funds is spent on managing it and ensuring proper control, rather than on implementing the system of program activities. The benefits of the control system must outweigh the costs of its operation. Control system costs consist of the time spent by managers and other employees collecting, transmitting, and analyzing information, as well as the costs of equipment used to implement controls, and the costs of storing, transmitting, and retrieving information related to control issues. At an enterprise, if the profit arising from the implementation of control is less than the costs of it, then such control is uneconomical and unproductive. One way to potentially increase the cost-effectiveness of control is to use control by exception. The content of this method is that the control system should operate only in the presence of noticeable deviations from control standards.
An important and rather complex element of the second stage of control is the assessment (measurement) of performance results, which will answer the question: to what extent have you been able to comply with the established standards? In turn, to conduct such an assessment it is necessary to create an appropriate information base, which is quite expensive.
The transfer and dissemination of information plays a key role in ensuring the effectiveness of control. In order for the control system to operate effectively, it is necessary to bring to the attention of the relevant employees of the enterprise both control standards and the achieved results. This kind of information must be accurate and communicated to enterprise employees in an accessible and understandable form, which will, in turn, allow them to make informed management decisions. In other words, there must be effective communication between those who set control standards and those who must implement them. The main difficulties that may arise in the process of collecting and distributing control information are associated mainly with various communication problems. While some data is collected and processed by computer, most information will have to be processed by humans. It is quite clear that the presence of a person in the control process is associated with possible distortions of information on the basis of which management decisions should be made. Distortions of information can play a very significant role in cases where subjective assessments are inevitable. The most typical example in this regard can be attempts to evaluate the results of the work of managerial employees.
The final stage of the second stage of the control process may be the assessment of information about the results obtained. In many cases, the measure of such an assessment can be the scale of permissible deviations established earlier. At the same time, in some cases, management workers can and should make personal assessments and interpret the significance of the information received. At the same time, they must take into account risk and other factors that determine the choice of one or another management decision. The purpose of this assessment is to decide whether certain actions are necessary, and if so, which ones?
The third stage of the control process is associated with the choice of a certain line of behavior for a managerial employee - do nothing, eliminate any deviations that have arisen, or revise control standards.
The choice of a line of behavior for a managerial employee, in which nothing should be done, can be carried out if a comparison of actually achieved results with control standards indicates that the set goals are being achieved. At the same time, in management activities one cannot count on the fact that what happened once will necessarily happen again. Therefore, even if the control system has shown that in a certain aspect of the enterprise’s activities everything is going well, it is still necessary to continue to monitor and evaluate the results obtained.
In the event that there is a deviation of the actually achieved results from the planned ones, it is necessary to make adjustments to already made management decisions. The point of such an adjustment is to identify the causes of deviations that have arisen and ensure the enterprise returns to the planned development strategy. The adjustment can be achieved by improving the values of any internal factors of enterprise development, improving management functions or technological processes.
It must be emphasized that the cause of deviations from the chosen development strategy can be either one factor or a combination of several factors. It is quite natural that a manager, before choosing a specific corrective action, must assess the influence of all possible factors and their interaction. Moreover, since all divisions of the enterprise are interconnected in one way or another, any significant change in one of them will affect the enterprise as a whole. That is why the manager must initially make sure that the corrective action he is taking will not create additional difficulties, but will help resolve them.
However, not all deviations from control standards should be eliminated. In some cases, the standards themselves may be unrealistic. For this reason, monitoring may indicate the need to review the selected control standards. Moreover, as is the case with corrective actions of various types, the need for a radical revision of control standards (up or down) may be a symptom of problems arising either in the control process or in the planning process.
At an enterprise, it is customary to distinguish two main forms of control:
Strategic;
Current (operational).
Strategic control is aimed at meeting the needs of strategic planning and management.
Current control involves systematic monitoring of the progress of implementation of current plans and development programs of the enterprise.
In accordance with this, it is advisable to form strategic and operational controlling systems within the enterprise.