Origins of controlling
Controlling is a business management process driven by planning, reporting and control.
In Europe, controlling developed in the fifties of the twentieth century in particular by the establishment of subsidiaries of U.S. companies:
- it was broadly accepted in Germany, despite initial reluctance due to the bad opinion on the controller, which is widely regarded as the chief having the power, but who did not take upon himself the responsibility for his decisions. Over time, Germany became the European center for controlling,
- In Switzerland, controlling beginnings date back to the mid 50's,
- In France, controlling develops in 60's,
Controlling in the world
The first controller appeared in England in the fifteenth century. He was called as countroller and his task was to record receipts and payments of cash and goods. In the U.S. since 1778 government appointed "comptrollers" whose main function was to balance the budget and supervise of its use.
Controller in the private sector first appeared in the U.S. railway company Atchison, Topeka & Santa Fe Railway System in 1880. Main part of the task was related to financial and securities management. With time, the position of "controller" started gaining in importance particularly in the 20s of the twentieth century.
Initially controlling focused on financial problems, but over time it included broader range of areas in the company.
There are following differences in controlling development between U.S. and Europe:
- Controller in the U.S. is a person standing at the head of finance and accounting department, responsible for financial accounting, cost and tax reporting, budgeting and internal reviews. Controlling is the process of measuring and monitoring actual performance compared to predetermined objectives and operating plans.
- The controlling in Europe has a different meaning. It is defined as controller-ship, but refer to literal meaning of word "controlling", i.e.: steering, directing, acting intentionally, monitoring how the system work, but not only function of "control"
- La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000). Investor protection and corporate governance. Journal of financial economics, 58(1), 3-27.