The most commonly used metaphor in business is that of an orchestra. A business orchestra has its conductor and sound techs, who call the shots at pre-set musical themes. In business terms, managers are like musicians playing a score that’s constantly being updated as business ventures evolve and become larger. For example, Microsoft may come up with a revolutionary new business application, and a business manager may oversee the implementation of this application. If the manager doesn’t like what the manager is doing, he can fire the business manager, or the manager can fire the Microsoft guy.
When discussing the development of business management, the most conventional framing is that of a band with its conductor, who calls the shots at pre-set musical themes. Business controllers are like musicians, playing a pre-set score that is constantly being updated. To illustrate, Microsoft might come up with a new business application, which is way ahead of the competition. If this Microsoft application is not liked by the business manager, who is responsible for its implementation, he or she can fire the Microsoft guy, who may be in charge of hiring more musicians (for the orchestra). This scenario illustrates the centrality of business controllers, who are almost like musical chairs.
Another key component of business managing is information flows, also known as business processes. Information flows can refer to any number of things, from company information to staff information, from product information to customer information. In this sense, business controllers are like musicians, determining how the information flows within a company and whether or not that information flows correctly.
In business terms, a business controller is like a conductor, determining what music will be played and when. Like a conductor, a business controller keeps an eye on the tone of the information flows, taking corrective measures whenever necessary. The basic concept of business controlling is that it consists of five elements: internal control, external controls, quality management, and reliability. (I define these concepts in greater detail below.) Internal controls are designed to provide the business manager with a full view of the operations of the business.
External controls refer to those things beyond a business controller’s control. These relate to external risks, such as third party intervention, internal weaknesses, and external events. Typically, external risks and events are not considered by business managers. However, if these problems or risks are found, then the business processes will be analyzed for their relative vulnerability and risk exposure. Again, the objective is to find a strategy for mitigating the external risks. In most cases, a business manager is not aware of all potential external risks, so he relies on his business processes and systems to provide him with a relative summary of all relevant risks.
Quality management is an essential part of business controlling. In quality management, a business controller identifies the defects in the business processes and systems, analyzes the consequences of each defect, and develops preventive measures. Once this process is established, a quality improvement program is implemented. This type of procedure is called financial controlling.
As we have seen above, there are two main objectives of business controlling: identifying business risks, and minimizing financial risks. These objectives are usually implemented through the use of regulations and legal framework. It is very important to note that most developing countries lack legal frameworks for establishing and operating regulations for corporations. The result is that businesses must rely on the effectiveness of the policies of the regulatory bodies of these developing countries.
When it comes to operational procedures, there are two general categories: human-directed and mechanical/ mechanized. Human-directed procedures are more flexible than mechanical procedures and, therefore, they are more convenient and economical. In business controller, human-directed operational procedures are applied when the tasks require more interaction between the operators. For instance, in factories where the workers must execute various tasks without any supervision from a human being, manual procedures must be implemented. Mechanical/mechanical procedures are applied when tasks can be performed only with the help of machines. Examples of these procedures are automated handling system, production process monitoring, quality assurance, and workflow system.