The Controlling Concept. Horváth & Partners Management Consultants

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       Published by

      World Scientific Publishing Co. Pte. Ltd.

      5 Toh Tuck Link, Singapore 596224

      USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601

      UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

      and

      Verlag Franz Vahlen GmbH

      Wilhelmstraße 9, 80801 München, Germany

       British Library Cataloguing-in-Publication Data

      A catalogue record for this book is available from the British Library.

      © 2020 Verlag Franz Vahlen GmbH together, The Controlling Concept: Cornerstone of Performance

      Management. Published by arrangement with Verlag Franz Vahlen GmbH.

      This edition is jointly published by World Scientific Publishing Co. Inc. and Verlag Franz Vahlen GmbH.

      This edition is distributed worldwide by World Scientific Publishing Co. Inc. except Germany, Austria and Switzerland.

       THE CONTROLLING CONCEPT

       Cornerstone of Performance Management

      Copyright © 2021 by Verlag Franz Vahlen GmbH

      All rights reserved.

      ISBN 978-981-121-864-4 (hardcover)

      ISBN 978-981-121-865-1 (ebook for institutions)

      ISBN 978-981-121-866-8 (ebook for individuals)

      For any available supplementary material, please visit

       https://www.worldscientific.com/worldscibooks/10.1142/11778#t=suppl

      Desk Editor: Karimah Samsudin

      Printed in Singapore

      Preface

      We are delighted that our tried-and-tested “Controllingkonzept” book is now available in English under the title of “The Controlling Concept”, making it accessible to an even larger readership. This version is the translation of the 8th edition of the German book. A Chinese edition has also been available since May 2018, sitting alongside the German and English version.

      The 1st edition of this book was published by Prof. Dr. Dr. h.c. mult. Péter Horváth, Professor Emeritus at University of Stuttgart and founder of Horváth & Partners, together with associates from Horváth & Partners, and released in German-speaking countries back in 1990. Since then, the book has continued to be developed further based on the latest developments within corporate practice, cutting-edge scientific findings in different management disciplines, and the very latest developments in IT. This edition therefore replicates the state of the art in controlling. The book is targeted at controllers and managers of larger companies, who wish to create a controlling system that complies with both current as well as future company management requirements.

      We would like to thank Prof. Horváth, who supervised this edition organisationally and played a key role in shaping its content, as well as the many colleagues from Horváth & Partners contributing to this edition. We would also like to give particular thanks to René Linsner, Frank Poschadel, Christian Huck and Christina Seez, who all made a massive contribution to bringing the English version to life.

Stuttgart, January 2019	Dr. Uwe Michel
	Member of the Managing Board
	Horváth & Partners Management Consultants

      Objectives and structure of the book

      How does a company align itself with its objectives and ensure success in the long term? All companies have to face these challenges all the time. The challenges have become even greater given the increasing level of volatility and global uncertainty in recent years. The task for management is to direct the company and to adapt to changes in the corporate environment by way of suitable corporate strategies, structures and processes. Controlling primarily supports management in this task by providing suitable controlling information and processes.

      But how is an effective controlling system structured?

      By using a wide range of successful consultancy projects regarding the structure and improvement of controlling systems as the basis, Horváth & Partners has developed the “House of Controlling” (see Fig. 1). This covers the central components of an effective controlling system and has proven itself in practice time and time again.

      This book provides a detailed description of the components of the “House of Controlling”, illustrating the key findings in a manner that is easy to understand for readers. In addition, specific structural principles for managers and controllers as well as practical examples enable implementation in small- and medium-sized enterprises as well, thus contributing to the distribution of effective controlling systems in all sectors and through companies of all sizes.

      This book is specifically designed for practitioners who have experience in dealing with managerial issues, but who require structural know-how for the purpose of a modern controlling system.

      The book therefore has the following objectives in mind:

      •Readers should become familiar with and understand the central components and design features of an effective controlling system (“House of Controlling”).

      •Readers should learn how to deal with the various terms, tasks and tools involved in controlling.

      •After having read this book, readers should know how an effective controlling system is structured and which design features need to be observed in particular. They should therefore be able to adapt the knowledge they have obtained to the special characteristics of a company.

      This will generally involve replicating the latest practical and scientific findings on controlling and illustrating numerous examples from corporate practice. The general practice-oriented controlling system is always at the forefront of this. This does not involve a detailed scientific approach unlike individual controlling problems.

      The structure of the book is aligned with the components of the “House of Controlling” by Horváth & Partners:

      To begin with, Chapter 1 clarifies the term “controlling”, general controlling tasks and an understanding of the role and skills of the controller. This provides the basis for illustrating the components and design features of an effective controlling system in the subsequent chapters.

      Fig. 1:Structure of the book based on the “House of Controlling” by Horváth & Partners

      Chapters 2 to 7 describe the individual components of an effective controlling system. All chapters are structured identically to each other. The objectives of the chapter are indicated in the first section. The second section in each chapter illustrates the need to take the component into account as part of an effective controlling system. The third