The Evolution of Controlling in Companies in Croatia – a Longitudinal Study

Abstract

Controlling is primarily a phenomenon found in practice. The interesting question of how controlling develops in practice has received respectable attention in research and corresponding literature. In this paper we explore controlling in the light of empirical research. Moreover, the unexplored question of how controlling develops in practice in Croatian companies is the main inspiration for this paper. The objective of this paper is to provide an insight into the role of controlling and its understanding, function, tasks, instruments and information flow. We analyse the perceived contribution of controlling to business success as well as incentives and obstacles to its development. This study is based on the analysis of primary data with the aim of describing the development of controlling (explorative study). The research study covers the time span of 15 years in three different points in time: 2001, 2007 and 2015. The study is a retrospective longitudinal study, and this allows us to explore the process of change related to particular aspects of controlling. The study is at the same time a trend study since it enables the analysis of changes at the level of the researched sample. In this paper, we observe, describe and explain findings from the controlling practice in Croatian companies. Our results show that controlling in Croatian companies is most frequently understood as assurance of management rationality. In general, operative tasks and operative instruments dominate with internally-oriented focus. What is still needed is a more strategic and normative orientation, more external orientation and more freedom for controllers to create tasks and activities. Controlling is also recognized as a business success factor in Croatian companies. Management has the main influence over the development of controlling while IT support is discovered as the main obstacle in its development. The contribution of this paper is threefold: firstly, we provide insight into the controlling function; secondly, we explore the dynamic perspective in controlling over the last 15 years in Croatian companies, and thirdly, with this paper we hope to provide design guidelines and recommendations that have to be concretized in organizations by taking into account the specific conditions of each individual case.