Strategic controlling

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Strategic controlling forms a sub-area of controlling and is therefore directly related to the general concept of controlling. If controlling is understood as special management support (insofar as controlling is not perceived by managers themselves), strategic controlling is the support of strategic management (= strategic corporate management).

Goal, tasks and process

The aim of company-related controlling is the maintenance and successful further development of companies . When it is geared towards the results or value targets of a company, controlling can be understood as a concept of management support, specifically with regard to the result or value target-oriented safeguarding of rationality. The type and scope of management support differ fundamentally depending on the level of content considered. In a generic view, three levels of corporate management can be differentiated:

Normative level: The normative level represents the highest level in the system of corporate management. “The level of normative management deals with the general goals of the company, with principles, norms and rules of the game that are geared towards the viability and development potential of the company In addition to the corporate goals, the contents of normative leadership are in particular corporate values ​​and corporate culture .

Strategic level: A company's potential for success is at the center of the strategic level. They are the product and market-specific prerequisites for economic success (e.g. technologically superior products, basic technologies, business models, process structures): "The strategic corporate management is geared towards the development of existing and the development of new success potentials and describes the The goals, performance potential and procedures required for this. ”Decisions at the strategic level ultimately affect the strategies , structures and key people and systems of a company.

Operational level: The operational planning, management and control processes aim to utilize the existing potential for success. They move within the framework set by strategic decisions.

Strategic controlling combines the basic concept of controlling with the strategic level of corporate management. Strategic controlling thus has the task of assuring results and value target-oriented rationality with regard to the safeguarding and further development of existing and the development of new potential for success.

The individual tasks of strategic and operational controlling differ fundamentally as a result of the different degrees of entrepreneurial freedom of strategic and operational management. From this it is sometimes concluded that the term “operational controlling” is to be equated with quantitative or monetary information and “strategic controlling” with qualitative information. Such a dichotomy fails to recognize the need for support in strategic decisions. "The big challenge in the strategy process is precisely to convert qualitative information step by step into quantitative and finally monetary information in order to make it accessible to an assessment." The close connection between the various information categories can be illustrated by the following example in connection with investment considerations build the information levels on each other:

Qualitative information: including trends in legislation ("Will there be tightening of legal regulations for a specific product?"),

Quantitative non-monetary information: including size of the market of interest in units (“How big is the market today, measured in units sold and how is it influenced by legal trends?”) And

Quantitative monetary information: including size of the market in €; Result effects of a strategic project ("How big is the market measured in € currently and how big will it be in the future? What influence can different price / cost developments have on the demand behavior and the market size? How high are the investments required in order to to participate in the market? How attractive is the investment based on the net present value? What are the monetary consequences of a 'worst case' scenario? Could they threaten the company's very existence? ")

In contrast to operational controlling, which is geared towards profit and liquidity in the present and near future ("today"), strategic controlling aims at the near and distant future and thus a generally open time horizon. The support function of the strategic controlling refers to decisions to secure the existence (building and further development of success potential) with which profit and liquidity in the future ("tomorrow") are to be guaranteed. This is also a prerequisite for increasing the company's value. The time horizon of the near and distant future is the result of the strategic degrees of freedom and can vary considerably in its concrete form depending on the industry.

Management support is provided by strategic controlling in the individual phases of the strategic management process. This can ideally be interpreted as a planning, control and monitoring process based on the control loop principle and comprises the following phases:

  • Strategic goal planning: "Which goals should the company achieve?"
  • Strategic analysis and forecast: "What opportunities / risks does the company face, what strengths / weaknesses does it have?"
  • Development of strategy alternatives: "How could the company gain or defend competitive advantages?"
  • Strategy evaluation and selection: "What is the best of the strategies for the company, what decision is made?"
  • Strategy implementation: "How does the company actually implement the strategy decision?"
  • Strategic control: "Is the company on the right track and how is it progressing?"

An understanding of controlling as management support results in a corresponding process-related task for strategic controlling: "The strategic management process is to be supported in all phases by process-accompanying strategic controlling." The phase contents illustrate a particular variety of (support) tasks. Particularly in the area of ​​the assessment of strategies, there are close links to accounting-oriented controlling, especially company-related results and financial planning. Under these aspects, strategic controlling forms an intersection of tasks or support tasks from strategic management and accounting-oriented controlling . As a concept, it is a multidisciplinary approach with the aim of integrating the required, diverse information and instruments as best as possible.

Personnel carriers

There are essentially four levels of staff responsible for strategic controlling, which are characterized by increasing specialization:

Level 1: Strategic controlling is carried out by top management itself without any further specialized support.
Level 2: The top management is supported in monetary issues by the accounting-oriented controlling. These questions relate in particular to the effects of strategies on income statement, balance sheet and liquidity.
Level 3: In addition to quantitative information, qualitative information and corresponding instruments are also incorporated into the process to a certain extent. The head of controlling or his superior is usually a member of top management and performs the tasks of strategic controlling.
Level 4: The top management is supported by a combination of a specialized strategy unit and accounting-oriented controlling.

A characteristic of level 4 is that the tasks of strategic controlling are performed by two specialized units. Tasks with a focus on external strategic topics (e.g. strategic positioning of business units) are primarily performed by a strategy-oriented support unit. This is typically a separate strategy department / department for corporate planning / business development with the character of a staff position. Tasks with a focus on primarily monetary complexes, on the other hand, are primarily performed by the controlling units of accounting-oriented controlling .

The function of the Chief Strategy Officer , as head of the strategy unit with executive rank, is becoming increasingly important in level 4 .

Strategic controlling in the individual phases of the strategic management process

Strategic goal planning

In the strategic target planning, the fundamental value, factual and social targets for the company must be defined or specified more precisely within the framework of the normatively prescribed decisions. For value targets in particular, this applies to the specification of target content (“what”), target extent (“how much”) and time reference (“by when”).

The task of strategic controlling consists in particular in providing the necessary market and competition-oriented information for the objective foundation of the target decisions. The focus is on the value targets, namely in terms of metrics (target content), levels to be strived for (target extent) and time horizon.

The target content of strategic value targets can be assigned to the following fields:

  1. Company growth and profitability (e.g. sales and EBIT ),
  2. Liquidity (e.g. free cash flow ),
  3. Return on investment (e.g. ROCE ),
  4. Capital structure (e.g. equity ratio ).
  5. Company risk (e.g. cash flow volatility according to risk analysis and risk aggregation )

The recommended metrics, as well as the level to be strived for and the time horizon, must take into account market / industry and owner expectations.

Strategic analysis and forecast

The strategically relevant areas of the environment (opportunities / risks) and the company (strengths / weaknesses) are examined in order to guarantee a more precise assessment of the strategic challenge or to identify it in the first place. For this purpose, present and past data are evaluated using analysis methods. The information obtained is used as input for forecasting procedures with which statements about future developments are made.

The tasks of strategic controlling consist of providing analysis and forecasting instruments, supporting the use of instruments in the line units, collecting external and internal company information and processing it in a targeted, systematic manner (on request or as a service or on one's own initiative).

The analysis and forecasting instruments mentioned below can be understood as a basic set of instruments for strategic management or strategic controlling (“toolbox of strategic controlling”). This is to be used as required and also to be expanded.

For the area of ​​global and special environmental analysis

For analyzes in the transition between the environment and the company

As an analysis tool primarily in the company

In terms of the timely detection of strategy- relevant developments, an early detection system is also of special importance (see risk management )

The SWOT analysis condenses the analysis and forecast information for a combined consideration of opportunities and risks from the environment and strengths and weaknesses of the company. It thus forms a starting point for developing alternative strategies.

Development of strategy alternatives

During the phase, alternative strategic options for action are developed, with which success potential can be built up or existing success potential can be defended. In the case of corporate strategy, this concerns the question of which business areas a company wants to be active in and thus questions of the business portfolio (“Where to compete?”). The business strategy is the question of how the company can then achieve competitive advantages in a selected business area (“How to compete?”).

The tasks of strategic controlling differ depending on corporate strategy and business strategy. In the area of ​​corporate strategy, it is primarily a matter of working out alternatives to changing the portfolio. These include B. M&A strategies that allow entry into new business areas. In the area of ​​business strategy, the focus of alternative development is on the managers of the relevant units. The support provided by strategic controlling is therefore more selective.

Strategy evaluation and selection

The development of strategy alternatives is followed by an assessment with regard to the formulated strategic goals in order to subsequently make the decision for a strategy or a strategy program.

The task of the strategic controlling in this phase lies in the support up to the implementation of the alternative evaluation (see evaluation ). This takes place with regard to monetary and non-monetary goals as a decision-making basis for management; especially taking into account the effects on the expected cash flows, the cost of capital and the rating (via operational corporate planning ). The risk-return profile of the strategic alternative courses of action should be compared (e.g. using the company value as a measure of success). The implications of a strategy for the future rating ( risk of insolvency ) should be given special attention in order to avoid jeopardizing the company's continued existence (cf. requirement of KonTraG ). Making the decision, on the other hand, is a constitutive task of management.

The evaluation of the alternatives takes place on different levels:

  • Strategy level

The assessment is made with a view to solving a limited strategic problem (e.g. the internationalization of the business). The solution found should be advantageous in relation to the problem and also represent the relatively best of all the alternatives examined. Assessment instruments are in particular the net present value method (monetary goals) and the utility value analysis (combined monetary and non-monetary goals).

  • Organizational / overall company level

An organizational level represents a superordinate unit with profit and loss responsibility. One or more organizational levels can be superordinate to the strategy level, whereby the top of these levels corresponds to the overall company level. The final decision can only be made at the level of the company as a whole, as the overall company goals are superior to the goals of the other organizational levels. Therefore, from a monetary point of view, the proposed strategies and their effects must be mapped in the overall company-related earnings and financial planning. The utility value analysis is also used here for the assessment with regard to combined monetary and non-monetary goals.

Strategy implementation

The strategy implementation shows clear differences to the process of strategy development. Strategy development is a primarily intellectual process that requires analytical skills, intuition and creativity. The circle of people involved tends to be small. In contrast, strategy implementation is primarily an operational process in which a large number of people and individual activities have to be coordinated. Often times, changes to company structures and systems are necessary to implement strategies.

The implementation of a strategy according to the central characteristics of a change management process. From a holistic point of view, the use of appropriate concepts is recommended, such as B. the 3W model developed by Krüger. The task, competence and responsibility for the implementation of strategic decisions are basically assigned to the (line) managers of an organization. However, top management also faces specific (success-critical) challenges in implementation, such as B. Adelt shows in his design concept for a successful strategy implementation.

The task of strategic controlling is to support the implementation activities on a case-by-case basis with regard to strategy / strategy program and structures. In addition, the strategic controlling takes over the guideline competence for strategy / value-oriented management systems (especially incentive systems) and, if necessary, their design.

Strategic control

The basic principle of strategic control is future orientation: "The control of strategic planning [...] must be primarily future-oriented, feed forward and parallel to the planning and implementation processes - not only after their completion." With Such a future-oriented control makes it possible to identify influencing factors on the strategic decision-making and implementation processes in good time in order to carry out necessary adjustments according to the control loop principle.

The sub-areas of strategic control include:

  • Premise control
  • Consistency control
  • Progress control

In a broader sense, the success control after implementation can also be added to the strategic control, which is then a final control.

Bea / Haas in particular emphasize the control of strategic potentials as an additional element of strategic control. A control of the strategic potential can, however, also be assigned to strategy development, where the SWOT analysis is used for this purpose. The same can be seen for the comprehensive “strategic monitoring” formulated by Schreyögg / Steinmann. It is the global, non-directional control of the environment and the company, for which z. B. 3rd generation early warning systems can be used.

The tasks of strategic controlling in the context of strategic control include, in particular, taking on the process-accompanying control function and initiating the necessary adjustments, with the final decision-making authority for making adjustments at the management level.

Individual evidence

  1. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 3 ff .; P. Horváth: Strategic Controlling: From budgeting to strategic control. In: Controlling. 20th year, 2008, issue 12, p. 663 ff.
  2. ^ D. Hahn: Status and development tendencies of the strategic planning. In: D. Hahn, B. Taylor (Eds.): Strategic business planning - Strategic business management. 9th edition. Berlin / Heidelberg 2006, p. 6.
  3. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 34 ff. See also D. Hahn, H. Hungenberg: Planning and control calculation - PuK for the basic controlling approaches . 6th edition. Wiesbaden 2001, p. 276; B. Friedl: Controlling. Stuttgart 2003, p. 148 ff .; F. Wall: Controlling between decision-making and behavior control functions - conceptual similarities and differences within the subject. In: DBW. 68th vol., No. 4, 2008, pp. 463-482.
  4. ↑ K. Bleicher: The concept of integrated management: visions, missions, programs. 7th edition. Frankfurt am Main et al. 2004; R. Dillerup, R. Stoi: corporate management. 3. Edition. Munich 2011.
  5. ↑ K. Bleicher: The concept of integrated management: visions, missions, programs. 7th edition. Frankfurt am Main et al. 2004, p. 80.
  6. ↑ R. Dillerup, R. Stoi: corporate management. 3. Edition. Munich 2011, p. 37.
  7. ^ H. Hungenberg: Strategic Management in Companies. 6th edition. Wiesbaden 2011, p. 7 ff .; M. Welge, A. Al-Laham: Strategic Management. 5th edition. Wiesbaden 2008, p. 15 ff .; R. Alter: Strategic Controlling - Support of the strategic management. Munich 2011, p. 19 f.
  8. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 34 ff.
  9. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 36.
  10. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 36; H. Baum, A. Coenenberg , T. Günther: Strategic Controlling. 4th edition. Stuttgart 2007, p. 9; H. Langguth: Strategic Controlling. Dissertation Technical University of Berlin 1994. Ludwigsburg / Berlin 1994, p. 24.
  11. ↑ M. Welge, A. Al-Laham: Strategic Management. 5th edition. Wiesbaden 2008, p. 186 ff .; R. Alter: Strategic Controlling - Support of the strategic management. Munich 2011, p. 24. See also H. Mintzberg, J. Lampel, B. Ahlstrand: Strategy safari: A guided tour through the wilds of strategic management, critical of such an ideal-typical view . New York et al. 2005.
  12. ↑ P. Horváth: Strategic Controlling: From Budgeting to Strategic Control. In: Controlling. 20th year, issue 12, 2008, p. 664.
  13. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 37 f.
  14. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 38 ff.
  15. ^ P. Breene, F. Nunes, W. Shill: Rise of the chief strategy officer. In: Accenture Outlook, The journal of high-performance business. No. 1, 2008, pp. 1-8; P. Breene, F. Nunes, W. Shill: Master of the direction. In: Harvard Business manager. Volume 30, January 2008, pp. 80-94.
  16. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 46 ff.
  17. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 72 ff.
  18. ^ R. Grant: Contemporary strategy analysis. 3. Edition. Malden, Ma. 2003, p. 24.
  19. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 196 ff.
  20. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 236 ff.
  21. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 238.
  22. ↑ M. Kranz: Management of strategy processes: From strategic planning to integrated strategy development. Diss., University of Potsdam 2006. Wiesbaden 2007, p. 252.
  23. ^ W. Krüger: Excellence in Change: Paths to Strategic Renewal. 4th edition. Wiesbaden 2009, p. 20 ff.
  24. ^ M. Adelt: Features of successful strategy implementation. Publishing house Dr. Kovac, Hamburg 2014, p. 254.
  25. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 340 f.
  26. ↑ D. Hahn: Strategic Control. In: D. Hahn, B. Taylor (Eds.): Strategic business planning - Strategic business management. 9th edition. Berlin / Heidelberg 2006, p. 452.
  27. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 454 ff.
  28. ^ F. Bea, J. Haas: Strategic Management. 5th edition. Stuttgart 2009, p. 253 ff.
  29. ^ H. Steinmann, G. Schreyögg: Management. 6th edition. Wiesbaden 2005, p. 270 ff .; H. Baum, A. Coenenberg, T. Günther: Strategic Controlling. 4th edition. Stuttgart 2007, p. 320 ff.
  30. ↑ R. Alter: Strategisches Controlling - Support of the strategic management. Munich 2011, p. 324 ff., P. 350 ff.

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