This assignment is written as exam in the module international investment and controlling as the test performance in controlling. Like it is known from everyday working performance it is very important to integrate a controlling system in every company so that the bosses are able to get to know the important figures of the company and to compare them on the one hand with the figures of the past years and on the other hand with them of the competitors. Every company has a publication requirement for some figures and so parts of them are able to be compared inside every branch. With operation figures problems can be defined and it can help to determine operating high and low points as well as to control (target-actual comparison). All in all it can be said that operating figures provide condensed information and that is very important for every company. So with this assignment the need of operating figures should be shown as well as some systems to figure them out are explained and analysed.
Table of Contents
1 Introduction
1.1 Problem Definition and Objectives
1.2 Structure of the paper
1.3 Methodology
2 Importance of operating figures
2.1 Types of operating figures
2.2 Functions of operating figures
2.3 Advantages and Disadvantages in using of operating figures
3 Performance Measurement Systems
3.1 ROI System
3.2 Balanced Scorecard (BSC)
3.3 RL System
4 Critical Analysis of the described performance measurement systems
4.1 ROI System
4.2 Balanced Scorecard (BSC)
4.3 RL System
5 Conclusion and Outlook
5.1 Conclusion
5.2 Recommendations / Outlook
Objectives and Core Topics
This assignment aims to provide a comprehensive overview of the significance of operating figures in enterprise controlling and to analyze various performance measurement systems. The central research objective is to demonstrate that, contrary to the belief that they are a waste of time, operating figures are essential tools for management to monitor performance, conduct target-actual comparisons, and maintain competitiveness in the market.
- Theoretical importance and functions of operating figures in business.
- Detailed examination of the ROI system as a classic performance measurement tool.
- Analysis of the Balanced Scorecard (BSC) and its strategy-oriented, multi-perspective approach.
- Evaluation of the RL (profitability-liquidity) indicator system.
- Critical comparison of the advantages and disadvantages of these three measurement systems.
Excerpt from the Book
2.3 Advantages and Disadvantages in using of operating figures
Like using different or no systems there are always some disadvantages and advantages which should be shown in this chapter. Advantages in use of these systems are that a permanent collection of metrics allows immediate detection of deviations, weaknesses and so on. Additionally critical measure values can be used as targets for sub-areas and regulatory process is simplified. Another important aspect is that achieved goals can be precise accurately and quantitatively.12 A further point is the user can select any figure and interpretation that best fits its objectives.13
There are also some disadvantages like for example the risk of inflation indicators (data cemeteries). Also there is the relationship between indexes and to be detected, formal target is often not clearly. Anther aspect is many qualitative variables are inadequately operational zed as well as in the evaluation of indicators there is a great room for interpretation. The company has to bear in mind that the variables involved are not usually the only factors (multiple causes).14 An additional point is that if the business process aligned only to the figures, threatens the neglect of long-term gains in favour of short-term profits.15
All these advantages and disadvantages should be compared and so the right operating figures for the companies controlling have to be found and should be assigned individually for each one.16
Summary of Chapters
1 Introduction: This chapter outlines the complexity of International Investment and Controlling and introduces the thesis regarding the necessity of operating figures within business management.
2 Importance of operating figures: The chapter explores the definitions, types, and primary functions of operating figures, while also highlighting the inherent pros and cons of utilizing such data.
3 Performance Measurement Systems: This section presents three specific measurement systems: the ROI System, the Balanced Scorecard (BSC), and the RL System.
4 Critical Analysis of the described performance measurement systems: This chapter provides a comparative evaluation of the three systems, weighing their specific advantages and disadvantages for practical corporate application.
5 Conclusion and Outlook: The concluding chapter synthesizes the findings, confirms the necessity of operating figures for business success, and offers general recommendations for their implementation.
Keywords
Operating figures, Enterprise Controlling, Performance Measurement Systems, ROI System, Balanced Scorecard, BSC, RL System, Profitability, Liquidity, Management, Target-actual comparison, Strategy implementation, Corporate governance, Financial indicators, Reporting system.
Frequently Asked Questions
What is the core focus of this assignment?
The assignment focuses on the relevance of operating figures in enterprise controlling and analyzes three specific performance measurement systems to demonstrate their importance for company management and decision-making.
What are the central themes discussed?
The central themes include the types and functions of operating figures, the advantages and risks of indicator-based systems, and a detailed look at the ROI, BSC, and RL systems.
What is the primary research goal?
The goal is to refute the notion that operating figures are unnecessary and instead show how they are vital for internal monitoring, competitor benchmarking, and achieving strategic goals.
Which scientific methods are employed?
The author utilizes a research-based approach, drawing from various specialized literature and internet sources, combined with the author's own professional experience in developing internal controlling processes.
What is covered in the main section of the paper?
The main section details the classification of operating figures, describes the mechanisms of the ROI, BSC, and RL systems, and provides a critical analysis of their respective strengths and weaknesses.
Which keywords characterize this work?
Key terms include Operating figures, Enterprise Controlling, Performance Measurement Systems, ROI, Balanced Scorecard (BSC), RL System, Profitability, and Liquidity.
How does the ROI system function as a tool?
The ROI system serves as a control instrument in a pyramid structure, focusing on the maximization of earnings per unit of capital by breaking down factors that influence return on investment.
What distinguishes the Balanced Scorecard from other systems?
Unlike systems focused solely on financial figures of the past, the Balanced Scorecard incorporates non-financial indicators and provides a four-perspective view, making it a powerful tool for strategy implementation.
What is the main advantage of the RL system?
The RL system is characterized by its focus on both profitability and liquidity, and it requires relatively few figures compared to other systems, making it easy to use and flexible for specific business needs.
- Quote paper
- Julia Teigeler (Author), 2015, The Importance of Operating Figures in Enterprise Controlling. Analysis of the Different Performance Measurement Systems, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/298895
