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This article characterizes the Important differences that distinguish German controlling from similar US roles with emphasis on German controlling practices, German cost accounting, and the ways that German academia and professional education shape the vitality of the German practice accounting and finance system.
After the Second World War, many German managers and scholars traveled to the United States in order to get to know the state of the art of American management. In the process, they met American controllers as well. The concept of American controllership was a new experience for the German managers. At that time, people in Germany looked back to a great tradition of financial and cost accounting. However, an integration of accounting figures in the management process as it was realized in the Unites States was missing in Germany. The controller did not yet exist.
What was learned about controllership throughout the 1950s was falsely labeled with the term "controlling," a word that usually stands for controllership in the German language. But beginning in 1960, controlling underwent a fast propagation in German-speaking countries. In the beginning, the central question was how to prepare cost accounting data for management. Budgeting and planning had already come to the fore in the 1960s. Then starting in the 1980s, the support of strategy formulation and implementation via appropriate information became a substantial role of the German controller.
People increasingly recognized the necessity to integrate the controller as an active part of the management process. Since the 1990s the mission statement of the International Group of Controlling (IGC), based in Switzerland, reflects the role of the German controller (see Exhibit 1). This spirit of cooperation between managers and controllers as a team reaffirms that as a management process, control needs the cooperation of both managers and controllers.
Three differences distinguish German controlling from US controllership:
* German controlling emphasizes a strong focus on strategy and planning in active cooperation with the management.
* German controlling is built on a very detailed and specific cost accounting as basis of information.
* German controlling has an intensive academic research support.
Practice of German controlling
Controlling is currently a task performed in all German companies, but often also in public administration and in non-profit organizations. The head...