1. Hungary
“Navigating heavy seas
in the Carpathian Basin”
Are difficult times and stormy weather a good climate for controllers?
What contribution does controlling make to crisis management and company
survival? What is controlling like in practice here and now in Hungary?
The global financial crisis also hit Hungary at the Controlling in foreign group subsidiaries is to a
end of last year, rolling out the familiar effects. Ini- large extent shaped by the organization and
tially, companies in Hungary responded with the guidelines of the parent company’s group control-
classic instruments of drastic cost reductions, short ling department. That entails a strong dependency
time and, finally, job cuts. It was also typical that and little room for local initiative. Duties are mainly
many business plans drawn up for 2009 accord- focused on supplying data for group controlling in
ing to a traditional model became meaningless, as the course of operative and mediumterm plan-
the economic situation changed on a daily basis, ning, and for oper- ative, monthly report-
the future unpredictable and increasingly uncer- ing. The fate of Hungarian sub-
tain.
Against this backdrop, the situation of companies in
Hungary is developing very unevenly in the indi-
vidual sectors. Particularly affected is the produc-
tion industry that relies heavily on exports. It has
practically no liquidity reserves and is both ex-
tremely price and cost sensitive. Due to the popula-
tion’s loss of spending power, retailers are just as
hard hit by the financial crisis. Even huge discounts
fail to attract buyers because they simply have no
money. The services industry is affected insofar as
its contract risks have risen considerably and its
contracts and costs with companies subject to direct
impact at short notice, i.e. they can be curtailed.
The financial crisis has caused a mammoth upheav-
al in both companies and the market in Hungary.
Besides the risks, however this change dynamic has
created many new opportunities for new products,
services and business models with higher value cre-
ation, higher quality and long-term prospects in the
future. Nevertheless, this spells a huge challenge
and makes high demands of corporate manage-
ment, controlling and specialist departments.
18 CONTROLLER Spezial | Controlling International

2. sidiaries greatly depends on the weal and woe, In SMEs, where entrepreneurs and management
strategy and crisis management of the parent com- are characterized by entrepreneurial spirit, will
pany. and responsibility, controlling has now also as-
The situation is a bit different for controlling and sumed an important function in Hungarian compa-
management in Hungary’s foreign SMEs. Although nies, and the controller is an important dialogue
here, too, the strategy and crisis management of partner for management in strategic and business
the parent company is decisive, local management administration matters. The role of the controller as
has greater freedom to make decisions on the im- “navigator” even in turbulent times largely corre-
plementation of strategic provisions and crisis sponds to that in a Western European country.
management on the spot. Controlling is predomi- Duties cover supervising classic controlling proc-
nantly in the hands of the foreign parent company. esses like operative and mediumterm planning, re-
The procedures, methods and tools of head office porting, results and cost accounting, contribution
controlling are adapted for local use. margin accounting, and products and services
calculation.
Controllers, however, are also showing a growing
A new generation of controllers interest in learning about and applying proce-
dures, methods and tools. The aim being to im-
Central planning has a long tradition in large Hun- prove performance and cost efficiency, increase
garian companies. Although after the Peaceful the value creation component in the process chain
Revolution in Germany and in response to the com- and individual company functions, support the
petition of the emergent market economy, control- company’s strategy development and co-develop
ling functions did develop, from an organizational new innovative business models. A rising genera- Andreas Kovács
and operative point of view, these are mainly in- tion of controllers is learning how to master the Head of the ICV working
group Hungary 2;
corporated in the finance and accounting sectors. modern controlling method spectrum and can thus
Controlling activity is mainly restricted to opera- efficiently and competently support and assist Managing Director MCS
Management & Controlling-
tive and mediumterm business planning, supplying management and specialist departments in their
Service Vezetési Tanácsadó
data and reporting. activities. Controlling as a career springboard into Kft.
The situation of manage- management circles places these controllers in an
ment and controlling in excellent position to make better requirements of
Hungarian SMEs is far controlling later on from a managerial position, to
more positive. Hungarian promote and use it for themselves and the good of
SMEs, founded after the the company.
Peaceful Revolution, The qualification of controllers in Hungary, com-
that were successful in municating West European-style controlling is sup-
gaining a foothold in ported both at the universities and, intensively by
the domestic, regio- the controller academy of the IFUA, Horváth &
nal and international Partners. A brisk exchange of experiences be-
market, are more flexible tween controllers takes place on the platform of
at adapting themselves to the Hungarian controller association. The latter is
the fast moving, dy- backed by two active ICV working groups. These
namically changing hold two professionally demanding biannual work-
market and economic shops that enjoy a high level of interest and attend-
conditions. Fast reac- ance in an atmosphere of Hungarian conviviality
tions and adaptabil- and savoir-vivre.
ity in terms of prod- All this provides the best possible prerequisites for
ucts and ser vices in - developing controlling, even in Hungarian compa-
crease comp anies’ nies. Turning controllers into important, competent
chances of staying in and sought-after partners of management, with the
the running and sur- aim of jointly weathering out the financial crisis to
viving the financial leave it stronger than before, armed with new op-
crisis. portunities and prospects in the future.
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