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JOURNAL OF INTERDISCIPLINARY RESEARCH

RELATIONSHIP BETWEEN CHANGES IN BUSINESS ENVIRONMENT AND INTRODUCING NEW
METHODS, TOOLS AND PROCEDURES OF CONTROL(-LING)

JURAJ MIŠÚN,

PAULÍNA PAPRSKÁROVÁ,

IVANA

MIŠÚNOVÁ-HUDÁKOVÁ

University of Economics in Bratislava, Faculty of Business
Management, Dolnozemská cesta 1, SK-852 35 Bratislava,
Slovak Republic
email:

juraj.misun@euba.sk,

paulina.paprskarova@euba.sk,

ivana.misunova@euba.sk

This paper is an output of the research project “Trends of internal control in business
entities in the light of new challenges” (VEGA 1/0135/17) funded by the Slovak
scientific grant agency VEGA.

Abstract: Businesses and their managers are able to face changes from the internal and
external environment through the management function of controlling. They have a
variety of methods, tools, and procedures at their disposal that already are or can be
implemented in their organizations. Through the questionnaire method, at the turn of
2016 and 2017, we examined, among other things, whether companies operating in the
Slovak Republic experienced changes related to controlling and also whether they
introduced new methods, tools and procedures within controlling. Control(-ling), as a
specific term, is used to highlight the difference to the German controlling theory. The
aim is to determinate the relationship between the perceived changes in business
environment and introducing new methods, tools and procedures into this process in
companies. In evaluation of the questionnaires, we used statistical methods (Phi
Coefficient, Cramers’V and Goodman and Kruskal Lambda). In the result, there is no
statistically significant correlation.

Keywords: Control, Controlling, Management function, Changes, Methods of
controlling.

1 Introduction

The business environment is subject to constant change. It
doesn't matter what kind of industry it is, even a relatively stable
industry like the automotive industry appears to be turbulent
currently (Diesel Gate, electric drives). These changes may come
from innovations, legislative activity, due to customer and
supplier demand, etc. While researching potential changes
should be the work of analysts or planners, the response to
change should be fully in the competence of managers at
different levels of the organization.

How to respond to changes coming from external and internal
environment? Well, the answer of this question is the basic
function of management – controlling. It is the last in the
management cycle, after planning, organizing, staffing and
leading and is designed to ensure efficiency and effectiveness.

something goes wrong and is not in line with the plan, or as
someone imagines it, the manager has the task of bringing it
back to the track. It is irrelevant whether the manager has
learned to perform this function at the university, since
“knowledge what is crucial and what has minor or minimal
effect on business success comes with experience.“ (Hanák,
2015)

It is precisely the case of controlling, in which we find methods,
tools and procedures that can, on the one hand, help us in
identifying possible changes and, on the other hand, can be
helpful in responding to these changes. Yet, the „contemporary
theory of management is overwhelmed by various ideas, trends,
methods, techniques, or recommendations.“ (Jankelová et al.,
2019)

2 Theoretical aspects of control(-ling)

The term controlling is used to describe the management
function or the last step in the management process in dozens
and dozens of basic management textbooks written in English
(e.g. Certo & Certo, 2016; Griffin, 2016; Robins & Coulter,
2018). From our point of view, controlling is a constantly
ongoing process of designing standards, measuring performance,
comparing the performance with standards, and implementing
corrective actions to ensure effective and efficient running of the
organization's activities. Through controlling, every manager
aims to increase the predictability of future developments and

results. Unfortunately, in the latitudes of Central and Eastern
Europe (CEE), “controlling” is also used as an incorrect
translation of the German term controlling. There are several
reasons for this situation: a) older generation of CEE authors in
CEE has a better knowledge of German language than English;
b) mostly, publications in CEE have only title and abstract in
English; c) Internet translators presume “controlling” is an
English word and therefore offer the identical translation; d)
“controlling” is widely represented in English written textbooks,
but not that much in scientific papers. (Mišún & Mišúnová
Hudáková, 2019) To address this issue, we use the term control(-
ling) in our paper titles. The term control denotes an activity,
while the term controlling refers to the alignment of these
activities to a system or to the continuous performance of the
activity.

In the context, forty years ago, Harold Koontz (1980) mentioned
the problem with semantics in management with examples like
organization, line and staff, authority, responsibility, and
policies. Unfortunately, such a problem in controlling persists
and creates its own theory jungle in a relatively lacking of the
main term. Chenhall (2003) or Brenner (2009) mention the
differences between management control, management control
systems, management accounting and management accounting
systems, which are used interchangeably. However, in fact, there
is much more. Management control and managerial control are
used as synonyms, but obtain different meanings; German
controlling is most often translated as Management Accounting
in the names of university departments (Mišún & Paprskárová,
2018), while another term is organizational control, some
authors want to use performance management (Otley, 2003), etc.
We add the another term – control(-ling), but we hope, only for a
short time, till the Central and Eastern European authors assume
the current German practice. We hope to solve this problem in
our proposed research project in 2020/2021.

An important distinction has to be made between control done
by a manager and a person without decision-making authority.
Without the ability to decide on corrective action, the possibility
of “having something under control” is eliminated. Although
many members of an organization can assist in the control
process (setting highly competent standards, measuring
performance very accurately, comparing standards with
performance

using sophisticated methods, proposing tailor-made

corrective actions), the manager needs to decide from his/her
position on corrective action, which is then supported by his/her
power and authority. Another important fact is that the manager
mostly bears personal responsibility for the decision. Primary
characteristics of controlling are feedback and corrective action
and without

controlling, there can be no management. (Eilon,

1971) The ability to act should be considered as the essence of
control. (Coates et al., 1993) While McKenna et al. (2010)
accept that the modern organizational world is built on trust and
empowerment, they admit, this creates new fears about the loss
of control and management without control is impossible.

Despite frequent views on controlling (especially formal
controls) as harmful to innovation (e.g. Burns and Stalker; 1961;
Quinn 1980; Mintzberg 1994; Bonner et al., 2002), some authors
argue that it can increase capacity of an organization to derive
benefits from innovation (Chenhall and Morris 1995; Simons
1995; Bisbe and Otley, 2004; Jørgensen and Messner, 2009).

Particularly very important are some terms used in this paper,
since we distinguish between the Western and Eastern theory of
control (Mišún & Mišúnová Hudáková, 2019). In the Eastern
theory subject refers to the entity, which controls and the term
object to the person, group, organization, etc. being controlled.
From the perspective of these elements, we distinguish internal
control (both, subject and object, are part of one system) and
external control (e.g. Zhang, 2014, p. 45) (mostly the subject is
from another system, whether from public administration, other

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