Organizational performance is increasingly tied to intangible assets such as corporate culture, customer relationships, and brand equity. Yet controllers, who monitor and track firm performance, traditionally concentrate on tangible, balance-sheet assets such as cash, plants and equipment, and inventory. The authors argue that controllers can have an important role in tracking and analyzing off-balance-sheet resources. Here they envision this new role and its place in the organization.
1. University of Oklahoma, January 1993.
2. Others have discussed changes in the controller role. See, for example: J.P. Walker and J.J. Surdick, “Controllers vs. MIS Managers: Who Should Control Corporate Information Systems?” Management Accounting, May 1988, pp. 22–25;
A.D. Crescenzi and J. Kocher, “Management Support Systems: Opportunities for Controllers,” Management Accounting, March 1984, pp. 34–37; and
R.H. Fern and M.A. Tipgos, “Controllers as Business Strategists: A Progress Report,” Management Accounting, March 1988, p. 25–29. Over twenty years ago, Sam Goodman, the controller at Nestlé, proposed the establishment of a marketing controller. However, in his concept, the controller still focused on financial analysis. Our proposal is for the controller to go beyond a strictly financial orientation to analyze those assets that are fundamentally not financial and that are therefore difficult to value. See:
S.R. Goodman, The Marketing Controller (New York: Advanced Management Research, 1972). See also:
S. Trebuss, “The Marketing Controller: Financial Support to the Marketing Function,” The Canadian Business Review, Autumn 1976, pp. 30–33.
3. The first proponent of this concept of resources was Erich Zimmerman:
E.W. Zimmerman, World Resources and Industries (New York: Harper & Row, 1933).
4. P. Drucker, “The New Society of Organizations,” Harvard Business Review, September–October 1992, p. 95.
5. See J.S. Hekimian and C.H. Jones, “Put People on Your Balance Sheet,” Harvard Business Review, January–February 1967, pp. 105–113; and
R.L. Brummet, E.G. Flamholtz, and W.C. Pyle, “Human Resource Measurement — A Challenge for Accountants,” The Accounting Review, April 1968, pp. 217–224.
6. A. Pipkin, “The Twenty-First Century Controller,” Management Accounting, February 1989, pp. 21–25.
7. Frishkoff has proposed a similar methodology. See:
P. Frishkoff, “Is Your Controllership Function Out of Control?” Management Accounting, March 1986, pp. 45–47.
8. This discussion is based on:
W.J. Salmon, “Crisis Prevention: How To Gear Up Your Board,” Harvard Business Review, January–February 1993, pp. 68–75.