The controller profile

The controller profile Ariel La Paz [email protected] Universidad de Chile

Daniela Gracia [email protected] Universidad de Chile

Jonathan Vasquez [email protected] Universidad de Valparaiso

Abstract Management control rapidly gained attention and practical application in companies in the last decades. The ways it is implemented varies significantly depending on the perspective from which it is defined, the historic development of the discipline or the maturity of a company. In the evolution and development of management control, the responsible person in the organizational structure has been identified with a number of archetypes and generically called ‘Controller’. The variety of theoretical and practical constructions of the role provides a number of alternatives for the companies to define and for professionals to perform the role. However, the lack of understanding of the different types of controllers may induce to mismatches in the recruitment and selection processes, challenging the career development or resulting in the incorrect positioning of controllers and control outcomes in the organization. This paper describes the available literature about controllers and proposes a conceptual framework to describe and classify the different existing types. The framework is validated and used to map a sample of professionals performing as controllers and their companies’ emphases for the role. Keywords: Management control, Controller, Recruitment and selection, Professional development, Controller role JEL: L21 (Business Objectives of the Firm); M12 (Personnel Management • Executives; Executive Compensation); M51 (Firm Employment Decisions • Promotions) 1. Introduction The concept of management control rapidly evolved over the last decades. The management task has been described with different degrees of detail and often as a sum of functions from forecasting to planning, organizing, commanding, coordinating and controlling. In the contemporary era, the formalization of the control concept for organizations goes back to Fayol (1949) who defined it as the verification that everything is going according to the plan by establishing performance standards, measuring and reporting actual performance, contrasting results against the standards and applying corrective or preventive actions. Later, Anthony (1965) defined control as the process that facilitates the effective use of resources to achieve the goals established in the planning, and it soon expanded to include the corporate policy as the main source for the design of management control systems (Anthony et al. 1984). After these definitions, a broad scope of research and practice have sprung; posing questions that have been answered from disciplines such as accounting, scientific management, organizational dynamics, organizational design, psychology or information systems. However, academic documents and the practice of management control did not emerge simply from the prescriptive definitions, but mostly from observing the forces, internal and external to organizations, and the attempt to pragmatically describe the managerial practices and their evolution as old and new forces impact organizations. Examples of these are the natural divergence of individuals and organizational objectives (Hölmstrom 1979), or the technological innovations, and business environment changes (Flamholtz 1983) that challenge the command of actions and the achievement of organizational objectives. As the complexity of the business environment escalated due to the globalization of markets, technological development and pervasiveness of information technology also increased the need to plan, command and control a diverse and large number of variables at different levels and territories to support a variety of decision types. The different views of the American and European schools about management control, produced frameworks and tools that brought fluctuating implementations, uses and results of management control systems from one company to another. Some emphasize the operational, internal and cybernetic control (Anthony 1990; Anthony et al. 2007) and others focus on the strategic planning and control (Merchant and Otley 2007; Simons et al. 2000), at times concentrating on the financial and accounting perspective (Horngren et al. 2010), and other times targeting the organizational behavior and the design of incentives to induce people to accomplish given performances (Flamholtz 1983; Flamholtz et al. 1985; Jensen and Meckling 1976).

In the recent but rapid evolution of the management control theory and practice, the definitions of role and responsibilities of the highest-level professionals and executives performing as Controllers who also changed and adapted ranging from archetypes named as bean counters, scorekeepers, and watchmen, to consultants, advisors and business partners (Colton 2001; Graham et al. 2012). Our motivation is to describe and conceptualize the changes that companies and individuals face when defining the position and crafting a professional career. Conceptualization of the controller is also important for the educational institutions that offer academic programs to prepare the new generations of controllers. Failing to match the right profiles would produce gaps in the performances of companies and individuals, whereas educational institutions could miss the focus of the evolutions and over/under emphasize the abilities, skills and tools that professionals and organizations need to succeed in the present and in the future. Hence, the research question that the authors aim to answer is: What are the different types of controllers and their characteristics? By answering this question, we will be able to conceptualize the evolution of the profile in the organizational contexts, as well as to provide a means for companies to better describe the type of controller they need to select and recruit. Professionals in the field may use our results to make informed decisions that shape their careers, and educational institutions may design their academic and specialization programs to satisfy the new and future demands of companies for management control. To answer the research question, the authors first perform a systematic literature review to identify the controller archetypes, functions, tasks, scope of action and responsibilities to unify descriptions and definitions in a conceptual framework of controller profiles. Secondly, we surveyed a sample of controllers to assess the framework validity and to map a sample of controllers according to their dominant profile, and map their companies’ definitions for the role to characterize specific types of controllers. Finally, we contrast the individuals’ construction of the top controlling executive against the definitions of companies for the same role. 2. State of the Art The term ‘controller’ has been used to identify different professionals performing the analysis of data and production of information to support decision-making processes. The appearance of controllers in companies is usually related to accounting as the way accountants transited from data recording to financial analysis and support for decisionmaking. Some studies name this role as the financial controller (Graham et al. 2012), others as the business unit controller (ten Rouwelaar et al. 2008), and as the corporate controller (Zoni and Merchant 2007). The role of controllers is also associated to a broader and more strategic function that seeks to maintain the logic and rationality in decision making processes, by adding value to the managerial and administrative tasks, and being the anchor to deploy the business strategy. The technological advances of the last four decades facilitated the accomplishment of the role defined in the early 1970s as a qualified analyst and as a reasonably precise forecaster (Crampton 1970), who, thanks to the digitized and integrated information systems focuses more on the analysis and interpretation of information floods from all functional areas than on the mechanical tasks to collect data and manually process it (Chapman and Kihn 2009). Such changes moved the role from an initially operational level described as ‘bean counter’, ‘score keeper’ or even ‘watchdog’ to a consultant and strategic position called ‘business partner’, ‘consultant’ or ‘business advisor’ (Baldvinsdottir et al. 2009; Granlund and Lukka 1997; Yazdifar and Tsamenyi 2005). The changes in the discipline progressively shifted the focus of decisions from an almost exclusive financial perspective to an integrated view of a company that not only produce information to support decisional processes, but that recognizes in the design of management control systems (MCS) a purposeful influence in the organizational behavior (Kaplan and Norton 1996; Kaplan and Norton 2008). The specialization of the cost accounting soon evolved into managerial accounting and management control, launching the accounting analysts to tactical and strategic levels (Colignon and Covaleski 1988; Granlund and Lukka 1997; Henttu-Aho 2016). The new position supposes not only the facilitation of information for decision making, but also to ensure corporate integrity in the financial, customer, suppliers, environmental and regulatory domains, shaping and impacting the organizational dynamics for planned performance and results. Alternatively, their emergence has been associated to the idea of cybernetic control of MCS implemented simultaneously in a number of processes and areas of corporate performance to alert and align the use of resources. In this view, controllers are responsible for the design and implementation and well-functioning of the MCS, and for the opportune use of information.

The emergence of controllers is facilitated by the availability of data and computer technologies, but mainly explained by the increasing need to control and maintain the consistency of decisions, actions, resources and objectives in a turbulent business environment. Hartman and Maas (2011) propose that the controller’s role is to ensure the rationality and accountability of corporate decisions, making it crucial when companies face crises. In a sense, controllers could be seen as a necessary and functional barrier for business agility, since they may restrict the freedom of managers (Ezzamel and Burns 2005), and permanently challenge the business performance and results (Johnston et al. 2002), but the role is perceived as functional because it aims to ensure that risks are managed for company endurance and the achievement of results. The major visions about the role have evolved and complemented, and as the discipline matures, the different visions and origins seem to fusion as globalization and the business environment complexities impose the need for more, better and integrative control to most business actors. At the risk of missing valuable and informative contents from books and professional communication manuscripts, Table 1 synthesizes a collection of highly cited documents in the literature of management control to illustrate the milestones and historical development of the field. Table 1.Selected documents in the management control literature Author and Title Research theme the

Major findings

Fayol (1949), General and Industrial Management

Identify and describe functions of administration.

- The functions of administration are: - Planning - Organizing - Staffing - Directing - Controlling - Controlling is the process of analyzing through feedback that performance and results meet the plans and apply corrective or preventive actions when necessary.

Ettinger (1955), The comptroller’s role in the financial management at the Naval Research Laboratory

Conceptualization of comptrollership and description the comptroller role at the Naval Research Laboratory.

- Comptrollership is simply management. - Principal functions are: - Budget formulation - Budget execution - Progress reporting - Analysis of performance - Accounting

Anthony (1965), Planning and control systems: A framework for analysis

Differentiate strategic planning and operational control.

- Strategic planning deals with the definition of the corporate strategic

sound

financial

planning

and

objectives

- Operational control aims to ensure that specific tasks and activities are performed efficiently and effectively.

Hölmstrom (1979), Moral Hazard and Observability

Imperfect information and moral hazard in the principal-agent relationship.

Contracts and information systems can be used for a more accurate judgement of the performance of the agent.

Jensen (1983), Organization theory and methodology

Explore the positive theory of accounting as an aid to normative choices.

- Accounting as an integral part of organization’s structure, the development of a theory of organization will be associated to a theory of accounting. - Organizational and accounting theories will provide scientific basis for managers’ decisions, standard-setting and government regulatory bodies.

Horngren et al (2010)Cost accounting: a managerial emphasis

Cost accounting for decision making

-Types of information from the management accounting - Costing models - Management control systems and performance measurement

Simons (1994), Levers of control: how managers use innovative control systems to drive strategic renewal

The application of controlling in dynamic and innovative business environments.

Four forces combined provide a balanced state for inspiration and innovation and the restrictions and controls to ensure compliance. The forces are: - Belief systems - Boundary systems - Interactive control systems - Diagnostic control systems

Kaplan and Norton(1996), The balanced scorecard, translating strategy into action

Presents the balanced scorecard tool as a system to align and mobilize people to accomplish companies’ mission.

-Demonstrate how the balanced scorecard with its 4 perspectives (financial performance, customer knowledge, internal business processes and learning and growth) is used by senior executives to guide performance and target objectives.

Lunkes et al (2009), The controllership functions in the United States, Germany and Brazil

Identify a set of controllership functions in three countries.

- The most quoted functions are planning and controlling, indicating a pro-active function. - In Germany and Brazil, information systems are relevant functions of controllership, while accounting is regarded one of its functions in USA and Brazil, but not in Germany.

Table 1 shows that, a common factor in the development of management control is the use of the accounting systems as the main sources of information and as monitoring tools, similar to the role of auditors. The approach and use of the accounting information, as well as the integration of other dimensions pertaining to the organizational behavior and the application of monitoring and control in all stages and levels for the performance of the business model, differentiate controllers from auditors (Hagel 2015; Jablonsky et al. 1993; Keating and Jablonsky 1990). 3. Conceptualizing the evolution of controllers Along with the evolution of the field, the skills, tools and capabilities needed by the professional in charge of MCS evolved. The revised literature contains a wide array of responsibilities, areas of performance and archetypes associated to the controller, but it has not yet provided clear distinctions of the archetypes neither indicated when one type of controller fits better to a given organizational context. The main objective of controllers is to deploy the corporate strategy (Kaplan and Norton 2008). Thus, the generic responsibilities defined for the role are: a) provide information to support decision making, b) help to reduce the divergence of individuals’ and unit’s objectives with respect to the organizational goals, and c) supervise the use of resources to guarantee competitiveness. In these tasks, significant attention is paid to accounting and financial information to produce reports for insiders such as managers and company executives (managerial accounting), and for outsiders like shareholders, financial and supervising institutions (financial accounting). The controller must also consider non-financial and qualitative measures to support decision making and participate at different organizational levels in monitoring, consulting, coordinating and managing change (Bollecker, 2007), making of MCS a tailor-made function for the particular organizational context, stage and leadership at a given point in time. In order to customize the role, more specific tasks focus on planning, monitoring, reporting, data analysis and interpretation, performance assessment and consulting, however these are emphasized or reduced according to the organizational needs and culture. In the US, the role seems to be oriented more towards financial monitoring, while in some European regions they are not responsible for the financial accounting or the reporting. In France, controllers strongly relate to budget, managerial accounting, statistical and economic analyses and long–term planning (Azan and Bollecker 2011; Guenther 2013). There are two criteria that could be used to identify the types of controllers. Following Anthony (1965), a first main distinction is the organizational approach to management control. Organizations can be reactive and operational about management control, focusing mainly on the accounting information systems to measure performance, or proactive and strategic escalating the scope of the area to include the modeling of behavior and measure organizational results as a continuous process to deploy the business strategy. A second criteria to describe the role rests on the classification provided by Sathe (1983) who distinguished controllers in a monitoring function where the technical abilities are the key to analyze and process the quantitative indicators to ensure the accuracy of financial information, or can be defined as a service function, where the business view, communicational abilities, and the interpersonal skills dominate in the role of controller to assist the executive

leaders in strategic decisions about the business strategy and plans. Combining the two criteria we identify four different types of controllers, labeled as Information source, Operational, Coordinator, and Business partner, on which we grouped the archetypes found in the literature. Table 2.Types of controllers by organizational approach to management control Sathe (1983) Monitoring

Business Partner (Consultant, Advocate, Advisor, Change agent)

Coordinator (Manager, Navigator, Service aid)

Operational (Watchdog, Corporate Policeman)

Information source (Bean counter, Score keeper, Historian)

Service

Anthony (1965) Operational

Strategic

Reactive

Proactive

























The four types of controller are incremental in terms of responsibilities, abilities required, and organizational level in which it is positioned. Now we describe them in more detail, associating to each type the main features and responsibilities and, organizing the profiles in a conceptual map presented in Figure 1. The information source is the elementary type of controllers. S/he is expected to influence in the design and be responsible for the exploitation of information systems in the organization (Burns et al. 2014), and for the construction of standard reports for internal and external users, the construction of ad-hoc information on demand to represent the economic state of the company, and to design and maintain the financial-cost-budget-accounting systems. To succeed in the position, the information source controller needs to master the technical skills in cost control, use of information systems, analysis of data, and report design, being also proficient in communicating sensitive information with an internal customer orientation. An operational controller uses the information to monitor business processes, operations and overall efficiency in the use of resources, hence emphasizing planning and monitoring responsibilities. The main tasks for this type are the analysis of budget construction and execution, business process optimization, and the planning and monitoring of operations. Competencies required for this type of role are skills in the optimization of processes and the organization of resources besides being an expert in business operations. The foci of communications are expanded to the external users of information, and to gain credibility in the entire organization. A third type of controller is the coordinator, who uses information and managerial tools to align resources and people in a proactive manner. The responsibilities of a coordinator controller include to design and maintain mechanisms to measure and influence performance, facilitate and support communication and coordination, and safeguard the strategic alignment of the different business units, including departments and individuals. With a more complex set of abilities and skills, the coordinator should be an expert in the business sector/domain where the company operates, understand how to influence human behavior, be good at negotiation, and have a systemic thinking. The business partner controller is proactive and a strategist. Beyond controlling, the business partner is expected to develop and use managerial and business skills, responsible for ensuring the organizational sustainability and growth protecting the interests of stakeholders. S/he participates in the formulation and design of the corporate strategy and initiatives and must ensure the objectivity in decision making at the C-level. The business partner controller outstands by his/her commercial and entrepreneur thinking, independence, persuasion, influence and leadership.

Responsibilities

Abilities

COORDINATOR

Operational and reactive

-

BUSINESS PARTNER

Strategic and proactive

Systemic Thinking Negotiation Knowing human behavior Expert knowledge of industrial sector

- Expert knowledge on the business operations - Project credibility and trust - Process organization and optimization - Oriented to external customers

OPERATIONAL

INFORMATION SOURCE

-

Leadership Persuasion & negotiation Independence Entrepreneurial and commercial thinking

-

Analytical abilities for information distribution Oriented to internal customer Expert user of information technologies Cost control

Organizational complexity

- Ensure rationality and objectivity - Participate in strategy formulation and design of strategic plans - Procure organizational sustainability/growth and safeguard stakeholders interests

- Ensure the strategic alignment of business units, departments and people - Facilitate and promote communication and coordination - Design and maintain mechanisms to measure and influence performance.

- Operations planning and monitoring - Pursue efficiency and efficacy of processes - Analyze budget executions and variations

- Design and maintain updated financial information systems - Represent the organizational economic state - Provide ad-hoc information on demand - Standardized reporting for internal and external users

Figure 1. Conceptual framework for the controller profiles

4. Method The framework, based on the literature revised, was first evaluated and validated with a pilot sample of experts in management control (scholars and managers), who commented and suggested specifications by the association of abilities and responsibilities to the four different profiles. These classifications were also tested empirically by grouping individuals who perform as controllers with a 4-step clustering technique applied to a sample of 45 controllers based on two major perspectives: individual’s abilities and corporate responsibilities. The clustering analysis aims to test and validate the usability and robustness of the framework. Data An invitation to participate in a survey was sent to controllers of companies from different industrial sectors identified from personal contacts of the authors, and from online professional network platforms. The survey translated the elements of the conceptual framework into questions with multiple selection answers, and added items to characterize the individuals and their companies. An approximate response rate of 12% yielded 45 complete responses with a dataset of 58 variables. Using the 2008 International Standard Industrial Classification (ISIC), most observations represent wholesale and retail trade (section G), transportation and storage (section H), and agriculture, forestry and fishing companies (section A). The survey asked each controller information about their organization and position profile such as company size, sales level, span of control, position of their direct supervisor, participation in the company’s strategy definition and agenda prioritization, as well as information about themselves like years of experience as professional and as controller, areas of academic training, strengths, and weaknesses. Data Transformation In order to classify each observation to the four controller archetypes introduced in the framework, the whole dataset was transformed into a matrix of numeric variables and divided into an organizational definitions section, and a personal characteristics section. In the organizational definitions, 24 variables are related to the controller’s agenda, span of control, organizational position, and participation in the corporate strategy definition. For personal characteristics, the data matrix was composed by 26 variables related to the abilities, strengths, years of experience as a professional and in the role, and the areas of academic background in the undergraduate and graduate levels.

Mapping Process The mapping process aims to identify the type of controller in each observation in the dataset. We defined this process as a categorization into four types of controller, where observations are contrasted with the types to recognize one dominant controller profile. The methods that better fit this type of mapping are the clustering algorithms used in data mining, where clusters (types or controller profiles) are identified according to the similarity of observations to clusters’ centroids (representative observation). In most clustering algorithms, similarity is defined as the closest distance between observations of a dataset and the centroids, i.e., an observation is part of a cluster if its distance to the cluster's centroid is the smallest compared to the distances of the observation to the other centroids. A customized algorithm of partitioning-based clustering was applied to the dataset. Initial values for the four centroids representing the types on controller were defined and applied to each data section –one for each archetype. The centroids were set with subsets of known and null values, so that the iterations of classifications filled the null as the algorithms learnt. The fixed or known variables for each centroid were the strengths in abilities, and the agenda in the responsibilities as defined in the framework. The remaining variables such as span of control, years of experience, and area of academic training were set as null. Once the observations of the dataset were assigned to the clusters according to the minimal distance to the centroids, the values of the empty variables were calculated; this was repeated until each observation was classified to one dominant cluster. The classification process iterated 200 times to achieve convergence in the classification of dominant profiles for the organizational definitions, and the personal characteristics. Algorithms’ Results The algorithms reached a stable convergence in the classification after the 150th iteration (see Figures 2a and 2b). With stable convergence in the classification, two robust results are obtained: first, the classification of observations to a dominant profile in the dataset, and second, updated mean values on each centroid that represent the features of the controller profiles in the organizational definitions and the personal characteristics. These results are analyzed and discussed in the next section, where the mapping of individuals’ controller profiles and organizational definitions for the role are analyzed and compared.

Figure 2a.Number of changes in the classification for each iterations in the clustering of individual’s characteristics.

Figure 2b.Number of changes in the classification for each iterations in the clustering of organizational definitions. The classifications identified a majority of controllers dominant in the information source cluster, for both individuals’ characteristics and organizational approach. The second most dominant profile, in the case of individuals' characteristics is the business partner, and for organizational definitions was the coordinator. The least dominant in the classification process was the operational profile with a similar portion of the total of observations assigned to this cluster for individuals and organizations (4.4% and 6.7% respectively).

5. Contrasting the controller clusters for individuals and companies The results represent the dominant controller profiles that companies emphasize and that individuals presented in our sample, revealing the match and mismatch between companies’ definitions for the position and the profiles of individuals hired for it. The overall match rate in our sample is low and focused on one type of controller, the information source. A match means that a company hires an individual who coincides with the profile that the company defines. A mismatch indicates that a company defines a set of features for the controller position, signaling a preference for a given profile, but hires a person endowed with abilities corresponding to a different type. The information source controller is the category with the largest number of individuals and companies in our sample, being closer to match each other. In spite of the similarity in the numbers, not all these information source controllers work for a company that prefers them, neither all companies preferring an information source controller, hired the right individual. This is also the type of profile in the sample where more individuals than companies fall into the cluster, indicating an excess of this type of professionals in the sample. The business partner type also contains more individuals than companies, but at a minor scale and with a likely non-significant difference. The coordinator controller category presents important differences in the number of individuals in the sample (2) and companies requiring those professionals (15), and the operational controller also presents a difference with more companies requiring this type than the professionals available, but with a minor difference and proportion in the sample. Figure 3 shows the frequencies of profiles found in the data, indicating the match and mismatch; again, note that information source is the only type where matches are found and the other three types of controllers mismatch between companies and individuals.

Controller Profile

Frequency

Match

Responsibilities

4

Capabilities

6

Responsibilities

15

Capabilities

2

Responsibilities

3

Capabilities

2

Business Partner

Coordinator

Operational

2 Responsibilities

23

Capabilities

35

Information Source

Figure 3. Classification, match and mismatch of controllers per type

A one-to-one match analysis reveals that 37.8% of the companies and individuals from the sample match well, and specifically in the information source. A concerning 62.2% of companies and individuals mismatch, i.e., companies defined a position, but hired a person with abilities that do not match it, and individuals work for companies that appreciate skills that are different from theirs. Table 3 further details the match and mismatch in the sample. The diagonal indicates match between companies’ requirements and the individual’s abilities. Cells above the diagonal identify: three information source controllers hired as operational, eleven as coordinators and four as business partners, and one operational controller performing as coordinator. Under the diagonal, we identify one operational hired as information source, two coordinators working as information source and three business partners performing as an information source. Finally, three business partners work as coordinator controllers.

Table 3. Detailed match according to dominant profiles

Individuals

Companies’ needs Information Source

Operational

Coordinator

Business Partner

17 1 2 3

3 0 0 0

11 1 0 3

4 0 0 0

23

3

15

4

Information Source Operational Coordinator Business Partner Total

Total 36 2 2 5

In addition to the classification of individuals and companies’ emphases for the role, the clustering technique also defines a stable set of variables that best describe the clusters. Tables 4a and 4b illustrate the most representative definitions given by companies to each type of controller and the representative abilities of individuals for each centroid related to the four profiles. Table 4a. Most representative responsibilities for each centroid.

Organizational Approach and Controller Type Business Partner Agenda Ensure sustainability, growth and benefits Participate in strategy definition process and design strategic guidelines Ensure decision making in alignment with business’ strategy Ensure strategic alignment between business units and employees Facilitate the coordination and communication inside the organization Design and implement mechanisms for performance evaluation Plan and monitor operations Analyze budget Ensure process efficiency and effectiveness Provide ad-hoc information Prepare internal and external reports Manage the financial, cost and budget information systems.

: High/medium dominance of a variable in the profile.

Coordinator

Operational

Information Source

The Table 4a illustrates that profiles related to a strategic-focused role of the controller, tend to perform managerial activities, such as strategy definition, coordination, and design of mechanism that help to influence employees’ behavior, while those profiles related to a reactive and operational controller type, mainly focus on activities related to prepare and provide information to the decision makers. In the case of the strategic and proactive profiles – business partner and coordinator controllers– the prioritization of activities is quite different, but for the operational and reactive profiles, (operational and information source controllers), their prioritization presented a similar set of activities in their agendas. It is interesting that the most strategic-level profile, business partner, presents a mix of managerial and reporting activities in its responsibilities, even though a strong focus on strategic activities was expected; these findings could be explained by the organizational complexity, where a controller takes a strategic position but is still responsible for the information reporting activities at the tactical and strategic levels. Results also indicated that business partner and coordinator profiles report mainly to CEOs and Company Directors and participate actively in the formulation of the company’s strategy while the Operational and Information Source profiles report to the CFO and have an indirect participation, having a voice, but not a vote or major influence in the strategy formulation process. Table 4b. Most representative abilities for each centroid

Individuals’ approach to a Controller Type Business Partner

Coordinator

Operational

Information Source

Strengths Leadership Persuasion and Influence Business and entrepreneurial thinking Self-sufficiency Negotiation Industrial context knowledge Human Behavior knowledge Show credibility External Customer Orientation Optimization processes and resources Business operation knowledge IT resources Internal Customer Orientation Analytical skills for reporting and communicating information

The classification process identified notorious differences in the abilities related to the four centroids. For the strategic and proactive roles -business partner and coordinator- the managerial skills are identified as the most

important; while the strengths considered as technical are associated to the operational and information source profiles. Coordinator and information source profiles, both defined as controllers for a mainly monitoring role approach, presented a mix of managerial and reporting abilities as representative for the cluster. Additionally, in terms of years of experience as a controller and professionals, results showed that business partner controllers are the most experienced and the operational are the least ones. Finally, business partner and coordinator roles presented a majority of observations with academic background in management areas, while operational and information source did on process and accounting academic programs.

6. Discussion and limitations Identifying the right person for the job is critical for the well-functioning of organizations. This can be especially critical at the C-Level where high-impact decisions are made. In the area of controlling and managerial accounting, the discussion is interesting given the rapid evolution of the areas in the recent decades. Matching the position with the right personal and technical abilities facilitates the process of planning, monitoring, controlling and performing according to a corporate vision to achieve the alignment and strategy deployment with efficiency. On the contrary, a deficient definition of the role or mismatching the role with the wrong over/under qualified person will likely hinder the controlling process, generating frustration and underperformance on companies and individuals. From the results, we observed a mismatch between the individuals’ abilities and the companies’ approach to controlling. In a few cases, companies hired controllers with the abilities and skills for a strategic and proactive performance, but assigned them responsibilities of a reactive and operational type of control (3 business partners and 2 coordinators working as information source controllers). Such cases could be regarded as overqualified professionals in the role, or underutilized skills by companies. On the other hand, and more frequently in our sample, companies shape the role as a strategic and proactive approach to controlling, but hire professionals with strong technical skills but insufficiently endowed of managerial, communicational and interpersonal abilities. This last case would not produce the expected results from the control process since the proactive and strategic definitions require networking, leadership and other managerial, communicational and interpersonal abilities to be successfully deployed. Mismatches can be the product of different causes. One of them could be the market forces, and if we consider the individuals as the supply of controllers and companies’ requirements as the demand for types of controllers, the forces captured in our sample could match better simply by redistributing the professionals in the companies according to the dominant definitions on each force. There can be market gaps if there are not enough professionals with given abilities and skills to meet the positions open by companies for that specific type. In the sample studied, this would be the case of coordinators, where more companies shape the role for this type (15 cases), but few individuals (2 professionals) meet this type of controller. The market forces are dynamic as the companies’ approach to control can change with the evolution of technologies, growth, maturity, legal and normative environment and a wide array of variables. Individuals can also change by shaping professional careers and complementing their abilities and skills with practice and specialization. The recruitment and selection, or the headhunting processes can help in solving the mismatch, but gaps may need the intervention of more actors like educational institutions, where individuals could develop the appropriate skills for the different types of controllers in response to market demands and requirements. This research presents a conceptual map to classify roles and individuals under four distinct types of controllers built on the basis of previous publications. The four types are, however, theoretical and in reality, companies and individuals commit to responsibilities from the different types of controllers, and interactively use abilities associated here to clusters, by the application of an algorithm that identifies dominant profiles. Our results should be carefully interpreted, since they are based on an exploratory but not confirmatory approach. Also, the information collected in the sample is self-reported by the individuals, which could be biased about the strengths they declared to have, or the importance of the activities by which their companies make them responsible and accountable. Even so, this is an interesting proposal to identify the actual approach of control in companies, and the dominant abilities of individuals to perform as controllers. This study aims to open up new research threads to extend the understanding of the role of

controllers and their evolution towards finding a better match between the organizational definitions and the emphases towards controlling with the professional’s abilities and characteristics.

7. Conclusions The approach of companies and professionals to the controlling function has changed and evolved in the last decades. From the organizational point of view, the control function became a permanent process that facilitates the compliance to norms, the deployment of a business strategy and the survival of companies that strive in an increasingly complex environment. Professionals taking responsibilities on the controlling function needed to develop skills and abilities to exploit information technologies to manage the financial, managerial and cost accounting systems, but also, the abilities to influence people’s behavior and effectively communicate with different actors at all the corporate levels. Many other forces can be mentioned for the evolution of control as one key managerial function, however, the above can be decided by companies and individuals themselves, while others are external and companies do not have a direct impact on them. Our study conceptualized different types of controller profiles required by organizations and performed by professionals in the area. In addition, we introduced and empirically tested a conceptual framework for the controller profiles. The framework was used to map a sample of controllers by their abilities and relevant personal characteristics for the job, while the organizational emphases to define a given controller profile is mapped mainly by using the responsibilities and organizational structure for the position. The mapping was conducted by applying clustering techniques to a sample that assigned the observations to dominant profiles. The dominant profiles are contrasted to analyze the match between the organizational preferences and the hired professional, evidencing an important mismatch, but also an operational rather than a strategic emphasis on the controlling function. The clustering permitted us also to identify over and sub qualified professionals for the responsibilities assigned by companies, which could be one factor to explain why companies not always reap the benefits of controlling. The results from this research have multiple theoretical and practical implications. The conceptual framework – although not prescriptive– organizes the current controller archetypes found in the literature in an aggregate manner such that companies and individuals can use it to evaluate what type of controller they belong to or they need, and adjust the role definition and development. Also, scholars can use the framework to question the direction of development of the management control discipline and adjust the research agendas in the field. Universities and educational institutions may analyze and eventually update their academic programs to respond to the market needs. Finally, head hunting companies and recruitment and selection processes may use it to better match companies and individuals.

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