Central European Business Review 2023, 12(3):123-141 | DOI: 10.18267/j.cebr.329

Use of Controlling Instruments in Croatian Companies during the Pandemic

Vlasta Roška ORCID...1, Vesna Sesar ORCID...2, Anđelka Buneta ORCID...3
1 Libertas International University, Zagreb, Republic of Croatia, vroska@libertas.hr
2 University North, Department of logistics and sustainable mobility, Koprivnica, Republic of Croatia, vesna.sesar@unin.hr
3 Libertas International University, Zagreb, Republic of Croatia, abuneta@libertas.hr

Nowadays, in times of the corona crisis, controlling is gaining much attention because it represents an effective internal mechanism that can greatly contribute to a timely and rapid response to changes. Controlling activities reflect the quality of company management at the strategic, tactical and operational levels. In doing so, controlling uses appropriate instruments and contributes to business efficiency and effectiveness. The research aims to determine the current state of controlling instrument application (operational/strategic) in companies. Furthermore, we examine the role of controlling in stabilizing business operations and adjusting business strategies that affect business performance indicators in the context of the corona crisis. The survey method was used, and data were collected from 180 companies of different sizes in the Republic of Croatia. The survey was conducted in 2021. Nonparametric techniques, the chi-square test and the Kruskal-Wallis test were used for hypothesis testing. The findings show that (i) there is a significant relationship between the role of controlling in business stabilization and business strategy redirection in times of corona crisis, thus affecting business indicators measured by liquidity, profitability and indebtedness; (ii) there is a statistically significant difference in the application of operational controlling instruments between companies that have established a controlling department and those without a controlling department; and (iii) there is no statistically significant difference in the application of strategic controlling instruments between companies that have established a controlling department and those without a controlling department. The results of the study provide insight into the application of controlling instruments in Croatian companies during the corona crisis and empirical implications for both academics and practitioners.
Implications for Central European audience: Nowadays, market volatility and external factors significantly influence business decisions of Central European companies. For managerial decisions to be timely and effective, controlling uses various instruments with the aim of better advising managers. To be more agile, companies have to use a combination of operational and strategic controlling instruments. In the Republic of Croatia, as a post-transition country, companies are more short-term oriented, which is visible in the significant use of operational controlling instruments, and the lesser use of strategic controlling instruments. In times of pandemic and geopolitical events, the results of the research indicate the need for strategic orientation of companies through the application of strategic controlling instruments in the practice of Croatian companies to increase the efficiency and effectiveness of their operations.

Keywords: Controlling; strategic instruments; operational instruments; crisis; business stabilisation; business strategy redirection
JEL classification: M1, M21

Received: July 8, 2022; Revised: October 13, 2022; Accepted: November 17, 2022; Prepublished online: January 6, 2023; Published: July 19, 2023  Show citation

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Roška, V., Sesar, V., & Buneta, A. (2023). Use of Controlling Instruments in Croatian Companies during the Pandemic. Central European Business Review, 12(3), 123-141. doi: 10.18267/j.cebr.329
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