operational group controlling

Operational Group controlling serves to coordinate the operational planning and control process of the entire group within the framework of group controlling. In the operational planning process, the operational goals for the group and its parts from the strategic group planning are derived from the strategic group planning, the measures and resources necessary to achieve the goals are determined and the parameters of the internal and surrounding system of the group to be observed are derived.
This triad of goals - measures - parameters is specified hierarchically in the planning process either from top to bottom (top-down approach), condensed from bottom to top (bottom-up approach) or in a combined countercurrent process (top-down / bottom-up) / Top-down approach) between the various corporate levels. In practice, the countercurrent process dominates today. The planning concern can vary between the three elements of the triad and place greater emphasis on the process or the result of the planning.

The planning results are required in order to coordinate operational group planning with strategic planning. Special emphasis is placed on the strategically important but operationally planned measures and resources. The planning process in the various parts of the group is used in particular to coordinate them.

In practice, the planning horizon for group planning is between two and five years and is usually divided into a period with detailed planning and one with rough planning, which is updated on a rolling basis.

The operational group plan from the three components is documented in a planning report, which is the basis for the control process.
The control process takes place at predetermined or case-by-case (e.g. parameter changes) specified intervals and should include target / actual comparisons with regard to various target-measure parameters. Often, the target / actual comparison for the past period is supplemented by a forecast (forecast) for the rest of the planning horizon.
In the control process in an international group, it is important to separate out the deviations caused by the exchange rate and inflation development as parameter-related deviations (group accounting). The concern of the control process lies on the one hand in learning processes for the continuously updated operative and strategic group planning, on the other hand in the improvement of the group planning and control system.

The subject of planning and control are the performance processes in the group units. Group controlling initiates, coordinates and documents this planning and control process, but does not carry it out itself. In the operational planning and control process, controlling not only has the system-building and system-coordinating task mentioned at Horvdth, but also the very important task of providing expert advice to the line authorities.

This “task of a second opinion, so to speak, from an independent third party” requires, on the one hand, a correspondingly high-quality structure of group controlling in terms of personnel, instruments and competence, as this is the only way to ensure an expert, independent and courageous judgment. On the other hand, it requires the implementation and consistent adherence to the »controlling rules of the game« in the procurement and use of information, as this is the only way to avoid the »unconscious equation of controlling with control« and the actual task of a »management consultant« in the company as well is to be conveyed. In organizational terms, the controlling of the service processes and service units in a group is usually structured according to the criteria of the task analysis (group controlling organization):

• after performing in the various instances of functional controlling (group management in the service area),
• according to the object in the various instances of product controlling / division controlling or project controlling,
• according to the location in the various instances of the Factory controlling / Investment controlling / company controlling.

The various hierarchies of the controlling organization and the controlling processes converge in the central controlling of the group. It thus has a higher-level coordination function. This raises the question of the extent to which special instances in central controlling should specialize in the respective problems of operational functional, division or investment controlling.

With regard to investments, this is often answered in the affirmative because, on the one hand, commercial and tax law requirements (historically located in "Controlling") require comprehensive technical processing, and on the other hand, in the traditional organization of corporate management according to divisions and functions, a dedicated contact person is often required for the group companies is missing.

In practice, this can only be a transitional step, as the traditional accounting task of consolidating the accounting units ties up so much capacity that it hinders the analytical and coordinating task of operational group controlling in managing the group companies. In general, with such a specialization, it must be ensured that the higher-level coordination function in terms of form and content is still carried out by Group Controlling.

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