ASSESSMENT OF MANAGEMENT CONTROLLING IN PANDEMIC TIMES

Abstract

The emergence of coronavirus led to evident consequences for the global economy. During the previous financial crisis, organisations have already determined the elements of crisis management so they could met the new corona crisis readily. Global changes, like the current pandemic situation, provide a different view toward the future expectations. The pandemic has caused new way of functioning under special circumstances such as various restrictions in many European countries, restrictions on people’s mobility and other novelties that have encountered for the first time. Characteristics of this crisis include novelty and pressure in a business environment, which can reveal various vulnerabilities in organisations. Managers were affected by major business changes, and there appeared a need for rapid reorganisation of the current way of functioning. Management had to introduce new control systems that refer to their strategies for exchanging information and decision-making. In general, each crisis is a new opportunity for seeking modern and appropriate models and tools for business improvement. When business situations are challenging, managers are more oriented toward controlling. Therefore, organisations that focus on traditional management models are not very successful in normal circumstances, and even less so in a crisis. This study aims to examine the extent of the structure and function of management control systems in pandemic conditions in Croatian organisations. An overview of current systems in organizations was given, as well as management challenges of the pandemic situations. This study includes the analysis of management control system during the pandemic times. The research was conducted using survey method what referred to analyses of strategic plans, performance evaluation systems, and management controls for performance evaluation in Croatian organisations. The factor analysis of the main components was conducted in order to examine the contribution of predictor variables in explaining the broad-scope management control system. In order to examine the contribution of gender, age, work experience, education, company size, aggregation, timeliness, and integration for explaining of broad-scope the management control system hierarchical regression analysis was conducted. The results confirm that integration is significant predictor in the crisis controlling model, but at the same time, when the integration and timeliness should have positive connection, greater timeliness does not increase to the greater availability. This withdraws the conclusion that uncertainty of environment extents the speed of business processes. Despite of the equal integration during pandemic crises the remote working conditions caused the decrease of the promptness of reporting collected information, which requires new models of controlling in unpredictable situations.

Full text

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES (ECLIC) – ISSUE 5
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UDK 658:614.4
Original scientific paper
ASSESSMENT OF MANAGEMENT CONTROLLING
IN PANDEMIC TIMES
Matej Galić, PhD, Research Associate
e University of Applied Sciences Baltazar
Vladimira Novaka 23, Zaprešić, Croatia
mgalic@bak.hr
Petra Popek Biškupec, PhD, Senior Lecturer
e University of Applied Sciences Baltazar
Vladimira Novaka 23, Zaprešić, Croatia
pbiskupec@bak.hr
Marko Galić, MSc in Economics
Enna Properties d.o.o.
Gospodarska zona 13, Vukovar, Croatia
mgalic99@gmail.com
ABSTRACT
e emergence of coronavirus led to evident consequences for the global economy. During the
previous nancial crisis, organisations have already determined the elements of crisis manage-
ment so they could met the new corona crisis readily. Global changes, like the current pandemic
situation, provide a dierent view toward the future expectations. e pandemic has caused
new way of functioning under special circumstances such as various restrictions in many Eu-
ropean countries, restrictions on people’s mobility and other novelties that have encountered for
the rst time. Characteristics of this crisis include novelty and pressure in a business environ-
ment, which can reveal various vulnerabilities in organisations. Managers were aected by
major business changes, and there appeared a need for rapid reorganisation of the current way
of functioning. Management had to introduce new control systems that refer to their strategies
for exchanging information and decision-making. In general, each crisis is a new opportunity
for seeking modern and appropriate models and tools for business improvement. When busi-
ness situations are challenging, managers are more oriented toward controlling. erefore,
organisations that focus on traditional management models are not very successful in normal
circumstances, and even less so in a crisis.

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 767
is study aims to examine the extent of the structure and function of management control
systems in pandemic conditions in Croatian organisations. An overview of current systems in
organizations was given, as well as management challenges of the pandemic situations. is
study includes the analysis of management control system during the pandemic times. e
research was conducted using survey method what referred to analyses of strategic plans, perfor-
mance evaluation systems, and management controls for performance evaluation in Croatian
organisations. e factor analysis of the main components was conducted in order to examine
the contribution of predictor variables in explaining the broad-scope management control sys-
tem. In order to examine the contribution of gender, age, work experience, education, company
size, aggregation, timeliness, and integration for explaining of broad-scope the management
control system hierarchical regression analysis was conducted.
e results conrm that integration is signicant predictor in the crisis controlling model, but
at the same time, when the integration and timeliness should have positive connection, greater
timeliness does not increase to the greater availability. is withdraws the conclusion that un-
certainty of environment extents the speed of business processes. Despite of the equal integration
during pandemic crises the remote working conditions caused the decrease of the promptness
of reporting collected information, which requires new models of controlling in unpredictable
situations.
Keywords: challenges, controlling, global changes, management control systems, pandemic
1. INTRODUCTION
Businesses today face many challenges. e implementation of new mechanisms
and management modalities is necessary in order to identify threats, as well as
opportunities, in a timely manner. e global crisis is pandemic crises caused by
Covid-19 virus and it is according to the World Health Organization (WHO) a
new and highly contagious disease.1 Coronavirus is a new virus discovered in 2019
that has not been known so far.2 e virus appeared in Wuhan, Hubei Province in
China, but spread very rapidly to other parts of China and the rest of the world.3
e emergence of a pandemic is not only a blow to the health system, but also
to the global economy. Since this is a new disease for which there was no cure at
the time of its appearance, in many companies it brought changes to the way a
certain business operates and disclosed the existing organizational problems. is
1 World Health Organizations. (2020). Coronavirus disease (COVID-19) outbreak situation. Retrieved
from the World Health Organizations (WHO) Online: [https://www.who.int/ emergencies/diseases/
novel-coronavirus-2019], Accessed 13 April 2020.
2 World Health Organizations. (2020). Coronavirus disease (COVID-19) situation report – 83. Re-
trieved from the World Health Organizations (WHO) Online: [https://www.who.int/ emergencies/
diseases/novel-coronavirus-2019], Accessed 13 April 2020.
3 Zhu, N.; Zhang, D.; Wang, W.; Li, X.; Yang, B.; Song, J.; Zhao, X.; Huang, B.; Shi, W.; Lu, R.; Niu,
P., A novel coronavirus from patients with pneumonia in China, 2019, New England Journal of Medi-
cine, Vol. 382, 2020, pp. 727-733.

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crisis has revealed to us what lies beneath the surface of our organizations. Work-
ing from home, i.e. working remotely, has disturbed the balance between work
and private life we have become accustomed to so far, and has become our new
reality overnight. is way of working is nothing new, but Covid-19 has certainly
accelerated the already growing trend that might even become permanent. e
pandemic came on suddenly, and brings pressure on global business activities.4
e consequences of the crisis for business activities came as quickly as the virus
itself, which spread around the world. Employee safety, cash flow, sales, and sup-
ply chains are just some of the issues that required a quick response.5 Covid-19 has
amplified existing social inequalities and turned out to be a great revealer.6 is
crisis is putting pressure on the business environment, and managers need to react
quickly and make changes in their business operations. e best response in such
situations is to turn to a higher level of controlling in organizations. e pandemic
has put companies that turn to traditional models of management at a disadvan-
tage. Managers who have a broader view of the management situation, which they
gain with a higher level of controlling in the organization, make better decisions
in complex situations.7,8 With the increased amount of information, numbers
and calculations that managers have at their disposal, they are able to make faster
decisions that put the organization they lead in a situation where it can adapt to
external influences and reduce uncertainty to a minimum. We conclude that con-
trolling, regardless of the business environment, always plays an important role in
management because it supports managers by providing them with the informa-
tion necessary for quality decision making. Controlling is focused on the future by
analyzing past and present events. Technological advances and globalization have
greatly disadvantaged traditional business models and increased competitiveness.
Controlling implies the overall business of an organization, and its parts represent
strategic plans and analyses. It is perhaps the most important function in dealing
with the organization’s problems, and this department is directly responsible to
management in informing them about the changes. Defining strategy, long-term
4 Spicer, A., Organizational Culture and COVID‐19, Journal of Management Studies, Vol. 57, Issue 8,
2020, pp. 1737-1740.
5 Pantano, E.; Pizzi, G.; Scarpi, D.; Dennis, C., Competing during a pandemic? Retailers’ ups and downs
during the COVID-19 outbreak, Journal of Business Research, Vol. 116, 2020, pp. 209- 213.
6 Corak, M. 2020. COVID-19 is not the great leveller, it’s the great revealer. Economics for Public
Policy, April 13. [https://milescorak.com/2020/04/13/covid-19-is-not-the-great-leveller-its-thegreat-
revealer/], Accessed 2 June 2021.
7 Jordao, R.V.D.; Souza, A.A.; Avelar, E.A., Organizational culture and post-acquisition changes in man-
agement control systems: An analysis of a successful Brazilian case, Journal of Business Research, Vol. 67,
2014, pp. 542-549.
8 Nielsen, L.B.; Mitchell, F.; Nørreklit, H., Management accounting and decision making: Two case studies
of outsourcing, Accounting Forum, Vol. 39, Issue 1, 2015, pp. 66-82.

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 769
sustainability and risk assessment are factors through which this process works.
Growth, development and, ultimately, profit are the goal of every organization,
and this is possible only if the aforementioned factors work successfully. MCS en-
hance the communication, learning and experimentation required for innovation
in strategy formation.9 Some researches emphasize management control system
(MCS) as a key to management innovation.10 us, a pandemic situation can
demand unexpected innovative strategies and effort.
2. THEORETICAL APPROACH TO RESEARCH
Given that controlling is related to all management functions, it is difficult to
define its activity.11 When talking about controlling, different definitions arise.
Controlling represents multidisciplinary knowledge that for the purpose of qual-
ity decision-making gathers information inside and outside the organization, nec-
essary for those in management positions.12 Common to all definitions of control-
ling is that it supports management in decision-making. e role of controlling
is to connect all parts of the organization into a unified whole so as to create a
comprehensive image of the company’s business operations.
2.1. Controlling functions
e concept of controlling encompasses several functions: planning, control, and
coordination. e planning function refers to determining future events, results
and activity implementation. Future events represent possibilities for manoeuvre
when it comes to activities.13 It is important for organizations to prepare in time
for the upcoming changes.14 Execution is a key feature of management control.15
e control function compares two or more values to determine deviations from
the plan that are viewed as control signals. e control function processes infor-
mation that takes place at strictly defined time intervals, and is not always the last
stage in management, but follows the creation processes from the very beginning.
e informative function includes systematic collection, processing and making
9 Davila, T., e promise of management control systems for innovation and strategic change, in: Chapman,
C.S. (ed.), Controlling strategy: Management, accounting, and performance measurement, New York,
2005, pp. 37-61.
10 Simons, R., Levers of Control, Harvard University Press, Boston, 1995, p. 5.
11 Očko, J.; Švigir, A., Kontroling–upravljanje iz backstagea, Knjiga print d.o.o., Zagreb, 2009.
12 Ibid.
13 Ziegenbein K., Kontroling, deveto prerađeno i aktualno izdanje, RRiF, Zagreb, 2008, p. 81.
14 Buble, M., Osnove menadžmenta, Ekonomski fakultet u Splitu, 2006, p. 86.
15 Merchant, K. A.; Van der Stede, W. A., Management control systems: performance measurement, evalua-
tion and incentives, Pearson Education, 2017, p. 11.

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available of information important for the management of organizations. Orga-
nizations put a lot of effort into their information systems because without them,
controllers would find it difficult to perform their tasks.16 e coordination func-
tion implies the harmonization of connected and separate processes.17 e aim
of coordination is to provide support in creating a value system. e integration
function makes all parts of the company meaningfully interdependent. All parts
connect and form a whole.
2.2. Concepts of controlling
e development of controlling itself is influenced by various factors, so each
country develops the concept of controlling in its own way. Social and economic
development are one of the most important factors influencing this. e concept
of control reaches far back in history and already in the 1960s, in France, control-
ling was present in over 50% of the most important companies.18 Controlling has
evolved based on several concepts: the accounting-oriented concept, the informa-
tion-oriented concept, and the management-oriented concept. e accounting-
oriented concept looks more to the future. Some of the features of the accounting
concept are the preparation of accounting data and a quantity-oriented approach,
while its goal is to ensure liquidity and profit. It also represents an instrument of
the management. e second concept is information-oriented, and seeks to build
its own information system of all users in the organization, that is to match the
needs and supply of information, and thus make decisions. e management-
oriented concept connects all functions in the organization for more successful
business operations. According to the management-oriented concept, the original
controlling functions are performed. is form of controlling represents harmoni-
zation in leadership, integration and coordination.
3. DATA AND METHODOLOGY
Earlier research, reports that tehnology or strategy of organization explains use of
management control systems. Menagment control systems used by the organiza-
tions is affected by organizational life cycle, especially in growing organizations.
Broad scope menagment control system (MCS) reduce negative affect of COVID
19 under the supposition that decision makers use that information. Bradth of
calculations that decision makers have at his disposal with menagment control sys-
16 Očko; Švigir, op. cit., note 11, p. 35
17 Osmanagić Bedenik, N., Kontroling – Abeceda poslovnog uspjeha, Školska knjiga, Zagreb, 2007, p 104.
18 Ibid.

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 771
tem increase their chance for promptly movements in new situations, and decrease
exposure to uncertainty.
is paper was based on previously validated constructs of the management con-
trol system provided by Chenhall and Morris (1986).19 e basis of their study
was a combination of the company’s features to measure a broad scope manage-
ment control system design (MCS). e measure of broad-scope includes non-
economic information (customer preferences, employee attitudes, etc.), informa-
tion about external factors (economic conditions), non-financial production data
(output rates), and non-financial market data (market information).
e data for this paper was collected using the survey method. e analysis was
made according to the experiences of working conditions in pandemic times due
to the work effort, amount of work, level of difficulty, work productivity and qual-
ity. Sociodemographic data were also collected, such as gender, age, years of work
experience, level of education. e survey included information about companies’
characteristics, such as the type of work department in which participants are em-
ployed, the company size, and the companies type of business.
e data was collected using an online Google form. Via the snowball sampling
method, a cross-sectional questionnaire was distributed. On average, the survey
took about 10 minutes to complete. After collecting data statistical analysis were
performed. Data analysis were conducted using Statistical Package for the Social
Sciences (SPSS version 20.0, IBM, Chicago, IL, USA). e key statistical pa-
rameters and descriptive data were calculated. Factor analysis and reliability tests
with Cronbach’s alpha were conducted to examine the metric characteristics of
measuring instruments. Hierarchical regression analysis (HRA) was conducted to
examine the contribution of the predictor variables in explaining the broad-scope
management control system.
e survey was conducted on a sample of 60 employees aged 21 to 57, with a
mean age of 36.05 (SD=8.08). Most of them have finished graduate study (51.7
%). Table 1 presents the sample structure.
19 Chenhall, R.H.; Morris, D., e impact of structure, environment, and interdependence on the perceived
usefulness of management accounting systems, e Accounting Review, Vol. 61, Issue 1, 1986, pp. 16-35.

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Table 1. Sample structure (N=60)
NPercentage
Gender Male 39 65 %
Female 21 35 %
Education
Vocational high school 2 3.3 %
Four-year high school 10 16.7 %
Undergraduate study 9 15 %
Graduate study 31 51.7 %
Postgraduate study 8 13.3 %
Source: Authors’ calculation
e respondents mostly work in a company with 11 and 50 employees (35 %),
but also in larger companies, with more than 51 (25 %), and with more than
250 employees (33.3 %). e company size structure is presented in Figure 1.
On average the respondents have almost 13 years of work experience (M=12.86,
SD=9.24).
Figure 1. Company size
Figure 1. Company size
Source: Authors’ calculation
Figure 2 presents the distribution of employees according to the department and agency (the
type of company business). Most of them work in the finance, accounting, and controlling
department (25 %), and in the sale department (16.7 %).
Figure 2. Employees work department
Source: Authors’ calculation
Figure 3 shows the employees company agency. The company type of business of participants
is mainly other supply/service agency (38.3 %), and trading (20 %).
Figure 3. Employees company agency
6,7%
35,0%
25,0%
33,3%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
Upto10
employees
From11to50
employees
Between51
and250
employees
Morethan251
employees
6,7%
16,7%
6,7% 6,7%
25,0%
1,7%
13,3% 13,3%
10,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
Purchase
Sale
Marketing
Production
Finance/Accounting/
Controlling
Warehousing
Directororownerofthe
company
Logistics
Other
Source: Authors’ calculation
Figure 2 presents the distribution of employees according to the department and
agency (the type of company business). Most of them work in the finance, account-
ing, and controlling department (25 %), and in the sale department (16.7 %).

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 773
Figure 2. Employees work department
Figure 1. Company size
Source: Authors’ calculation
Figure 2 presents the distribution of employees according to the department and agency (the
type of company business). Most of them work in the finance, accounting, and controlling
department (25 %), and in the sale department (16.7 %).
Figure 2. Employees work department
Source: Authors’ calculation
Figure 3 shows the employees company agency. The company type of business of participants
is mainly other supply/service agency (38.3 %), and trading (20 %).
Figure 3. Employees company agency
6,7%
35,0%
25,0%
33,3%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
Upto10
employees
From11to50
employees
Between51
and250
employees
Morethan251
employees
6,7%
16,7%
6,7% 6,7%
25,0%
1,7%
13,3% 13,3%
10,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
Purchase
Sale
Marketing
Production
Finance/Accounting/
Controlling
Warehousing
Directororownerofthe
company
Logistics
Other
Source: Authors’ calculation
Figure 3 shows the employees company agency. e company type of business of
participants is mainly other supply/service agency (38.3 %), and trading (20 %).
Figure 3. Employees company agency
Source: Authors’ calculation
After collecting data, the factor analysis was performed. The analysis showed a
unidimensional measure that explains 77.16% of the variance (item factor loadings are above
0.86). The reliability coefficient of Cronbach’s alpha is 0.93. In order to measure related
constructs of a management control system, the availability of the following features was
included: aggregation, timeliness, and integration. These features describe information
characteristics that could be relevant for management control system design.
20
Participants
gave their self-assessment on the scale of Likert’s type with seven levels of assessment (from
1 - not at all available, to 7 - available to a great extent). Feature of aggregation describes
department reports and process of decision making, timeliness describes the frequency of
reporting, and integration includes precise targets and company's performance. Internal
reliability was examined, and Cronbach alpha reliability coefficients for aggregation,
timeliness, and integration were high: 0.90, 0.90, and 0.93, respectively. Similar results of
Cronbach’s alpha were obtained in previous research.
21
4. Results and discussion
Before conducting the factor analysis, the normality of the distributions was examined. The
distributions of all measured variables are not significantly different from normal. This
confirmed indexes of skewness and kurtosis. Absolute values of skewness are than 3, and for
kurtosis are less than 10, which indicate that distributions are normal.
Table 2. Descriptive statistics
k
Min Max MSD IS
IK
α
20
Guenther, T.W.; Heinicke, A., Relationships among types of use, levels of sophistication, and organizational
outcomes of performance measurement systems: The crucial role of design choices, Management Accounting
Research, Vol. 42, 2019, pp. 1-25.
21
Spencer, S. Y.; Adams, C.; Yapa, P. W., The mediating effects of the adoption of an environmental
information system on top management's commitment and environmental performance, Sustainability
Accounting, Management and Policy Journal, Vol. 4 Issue 1, 2013, pp. 75-102.
8,3% 8,3%
5,0%
20,0%
6,7% 5,0%
38,3%
8,3%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
45,0%
Agriculturalandfoodindustry
Manufacturingandprocessing
industry
Tourismandcatering
Trading
ITsector
Construction
Othersupplyagency
Otherproductionagency
Source: Authors’ calculation
After collecting data, the factor analysis was performed. e analysis showed a
unidimensional measure that explains 77.16% of the variance (item factor load-

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ings are above 0.86). e reliability coefficient of Cronbach’s alpha is 0.93. In or-
der to measure related constructs of a management control system, the availability
of the following features was included: aggregation, timeliness, and integration.
ese features describe information characteristics that could be relevant for man-
agement control system design.20 Participants gave their self-assessment on the
scale of Likert’s type with seven levels of assessment (from 1 - not at all available, to
7 - available to a great extent). Feature of aggregation describes department reports
and process of decision making, timeliness describes the frequency of reporting,
and integration includes precise targets and company’s performance. Internal reli-
ability was examined, and Cronbach alpha reliability coefficients for aggregation,
timeliness, and integration were high: 0.90, 0.90, and 0.93, respectively. Similar
results of Cronbach’s alpha were obtained in previous research.21
4. RESULTS AND DISCUSSION
Before conducting the factor analysis, the normality of the distributions was ex-
amined. e distributions of all measured variables are not significantly different
from normal. is confirmed indexes of skewness and kurtosis. Absolute values of
skewness are than 3, and for kurtosis are less than 10, which indicate that distribu-
tions are normal.
Table 2. Descriptive statistics
kMin Max M SD ISIKα
Broad-scope MCS 4 1.25 7.00 4.33 1.46 .15 -.57 .93
Aggregation MCS 3 1.00 7.00 4.41 1.61 -.29 -.24 .90
Timeliness MCS 3 1.00 7.00 4.33 1.62 -.23 -.60 .90
Integration MCS 3 1.00 7.00 4.53 1.59 -.25 -.58 .93
Legend: k – number of items; IS = skewness; IK = kurtosis; α = Cronbach alpha reliability coef-
ficient
Source: Authors’ calculation
Table 2 presents the descriptive parameters and Cronbach alpha reliability coeffi-
cients for measured variables. Participants have assessed the availability of integra-
tion as the most available in their companies (M = 4.53, SD = 1.59). Overall, it
20 Guenther, T.W.; Heinicke, A., Relationships among types of use, levels of sophistication, and organizational
outcomes of performance measurement systems: e crucial role of design choices, Management Accounting
Research, Vol. 42, 2019, pp. 1-25.
21 Spencer, S. Y.; Adams, C.; Yapa, P. W., e mediating eects of the adoption of an environmental informa-
tion system on top management’s commitment and environmental performance, Sustainability Accounting,
Management and Policy Journal, Vol. 4 Issue 1, 2013, pp. 75-102.

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 775
is evident that employees consider the measured features moderately available in
their workplaces (all means are slightly above 4).
Hierarchical regression analysis was conducted in order to examine the contribu-
tion of gender, age, work experience, education, company size, aggregation, timeli-
ness, and integration for explaining of broad-scope the management control system.
Predictors of the proximal structure were introduced first, then predictors of distal
structure. e conditions for using hierarchical regression analyses were first exam-
ined. e values of the Durbin-Watson test was 1.75, which indicating that residu-
als are not intercorrelated. Values of variance inflation factor (VIF) are considerably
below 10, and values of tolerance above 0.2. erefore, there is no multicollinearity.
Intercorrelations between measured variables were also examined (Table 3).
Table 3. Interccorelations between predictors and criterion variable
123456789
1. Gender - -.14 -.15 -.16 -.03 .01 -.09 -.03 .10
2. Age - .91** .31* .22 -.20 -.16 -.13 .22
3. Work experience - .26* .15 -.28 -.25 -.23 -.13
4. Education - .02 -.05 -.04 -.06 -.11
5. Company size - -.12 -.12 -.08 -.11
6. Aggregation MCS - .87** .89** .87**
7. Timeliness MCS - .87** .70**
8. Integration MCS - .83**
9. Broad-scope MCS -
Note: ** p < .01; * p < .05
Source: Authors’ calculation
Table 4. Hierarchical regression analysis for broad-scope MCS
Predictors 1. step 2. step
1. Gender .07 .07
2. Age .15 -.20
3. Work experience -.21 .34*
4. Education -.09 -.07
5. Company size -.11 -.02
6. Aggregation .87**
7. Timeliness -.41**
8. Integration .46**
ΔR2.040 .809
R2.040 .849
F .451 35.97**
Note: ** p < .01; * p < .05
Source: Authors’ calculation

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After testing the conditions, a hierarchical regression analysis was conducted. In
the first step of hierarchical regression analysis, gender, age, work experience, edu-
cation, and company size were introduced. In the second step, the features of ag-
gregation, timeliness, and integration were simultaneously introduced. Results of
hierarchical regression analysis are shown in Table 4.
Predictor variables in the first step of hierarchical regression analysis were insignifi-
cant. However, results in the second step show that variables of work experience,
aggregation, timeliness, and integration were statistically significant. Employees
with more work experience estimate greater availability of non-economic informa-
tion, information about external factors, and non-financial data about production
and market. It can be assumed that employees with more years of work experience
can recognise and identify this kind of information more successfully than those
with less work experience. ose participants probably have greater authorise, so
these forms of information are more accessible to them.
Aggregation is the most significant predictor of broad-scope management control
system. e higher the capacity of a management control system to provide infor-
mation in various forms is, the greater is the level of management control system
design. Aggregation describes to what extent companies give data from various
departments like time-aggregated information. Existing findings show that crisis
could cause data overload or difficulties in decision-making.22 Research results
show that in our companies there was no significant negative effect of the pan-
demic on the aggregation of information from the various functional area, as well
as monthly and yearly reports and data analysis.
Results show that integration was also a significant predictor in this model. Stron-
ger coordination between various departments and areas causes internal, external,
financial, and non-financial information more available. Such information is re-
lated to a wide range of various content, like customer satisfaction, product trends
and costs, employee needs to government policies. Same as for the aggregation,
results show that there was no decrease in integration due to the pandemic crisis.
e findings were according to the expectations, concerning the other studies that
showed that integration is common action between departments in which they
are following company goals.23 ere are some ways to achieve differentiation,
like rules and procedures. In the crisis time, there is a need for more differentia-
22 Garcia Osma, B.; Gomez-Conde, J.; Heras, E., Debt pressure and interactive use of control systems: Eects
on cost of debt, Management Accounting Research, Issue 40, 2018, pp. 27-46.
23 Chenhall, R. H., Management control systems design within its organizational context: ndings from con-
tingency-based research and directions for the future, Accounting, organizations and society, Vol. 28, Issue
2-3, 2003, pp. 127-168.

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 777
tion in order to face unknown situations, which can lead to integration problems.
For such specific unpredictable situations, it is preferable to use some progressive
mechanisms, like meetings and integrating employees, rather than a set of rules
and procedures. Actions like this are a more organic type of structure and are more
welcome in uncertain times.
One factor related to a broad-scope management control system is also frequency
and promptness of reporting collected information, that is timeliness. According
to some previous research, along with integration, the timeliness is becoming an
increasingly important variable for management accounting data research.24 Usu-
ally, it would be expected that timely and aggregated information would lead to
sustainable commitment for internal, external and non-financial data. However,
in this research the relationship is different. Greater timeliness does not lead to a
greater availability, on the contrary. ese unexpected finding can be interpreted
with limitations that have occurred due to the pandemic crisis. e unknown
situation, such Covid crisis is unpredictable and surely have affected on prompt-
ness in collecting and submission various information and reports. When there is
environmental uncertainty, companies face challenges, which is manifested to the
greatest extent in speed processing generally in business.
Results show that the model in total explained almost 85 % of the variance of a
broad-scope management control system. Aggregation is the strongest predictor of
a broad-scope management control system (β=.87, p<.01). is is in accordance
with previous research on the important role of MCS which facilitates managers
to make more accurate decisions in uncertain times and crisis.25
In addition to this analysis, since the pandemic has appeared, in the period from
March 2020, many people have started remote working. Since controlling involves
the interaction of business processes that are subject to interpersonal relationships,
the survey included some features and experiences about remote working at the
time of the pandemic. Table 5 shows employees experiences from working at a
distance from their homes.
24 Chenhall, R. H., Integrative strategic performance measurement systems, strategic alignment of manufac-
turing, learning and strategic outcomes: an exploratory study, Accounting, organizations and society, Vol.
30, Issue 5, 2005, pp. 395-422.
25 Gomez-Conde, J.; Malagueño, R.; Lopez-Valeiras, E.; Rosa, F.; Lunkes, R., e Eect of Management
Control Systems in Managing the Unknown: Does the Market Appreciate the Breadth of Vision?, April 6,
2021, Available at SSRN: http://dx.doi.org/10.2139/ssrn.3675688.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES (ECLIC) – ISSUE 5
778
Table 5. Data about working conditions in pandemic times
f % f % f % f % f %
Much less Less Equally More Much more M SD
e extent to
which people
invest effort when
working from
home
2 3.3 11 18.3 16 26.7 23 38.3 8 13.3 3.40 1.05
Amount of work
when working
from home
2 3.3 10 16.7 22 36.7 16 26.7 10 16.7 3.37 1.06
Much harder Harder Equally Easier Much
easier M SD
Organising work
from home 8 13.3 15 25 19 31.7 12 20 6 10 2.88 1.18
Does not
compensate
at all
Does not
compensate
Partially
compensates
Compen-
sates
Fully com-
pensates M SD
Cost recovery
(electricity,
internet)
24 40 12 20 14 23.3 5 8.3 5 8.3 2.25 1.29
Much more
insecure Insecure Equally (in)
secure Safer Much safer M SD
General experience
of job (in)security 11 18.3 11 18.3 24 40 12 20 2 3.3 2.72 1.09
Completely
disagree Disagree
Neither
agree nor
disagree
Agree Completely
agree M SD
Work from home
in the future 4 6.7 4 6.7 18 30 20 33.3 14 23.3 3.60 1.12
More worse Worse Equally Better Much bet-
ter M SD
Work productivity
when working
from home
1 1.7 15 25 25 41.7 12 20 7 11.7 3.15 0.98
Quality of online
meetings 7 11.7 15 25 24 40 9 15 5 8.3 2.83 1.09
Source: Authors’ calculation
e emergence of the Covid pandemic have an impact on various aspects of hu-
man lives, and also on their characteristics of work. Generally, the aspects of work
conditions have an important role within the companies and with the external

Matej Galić, Petra Popek Biškupec, Marko Galić: ASSESSMENT OF MANAGEMENT... 779
environment.26 Since the pandemic occurred, the working population was forced
to work from home due to strict guidelines to avoid physical contact. Such new
instructions become a part of daily life in private, but also in office life.
Participants report to the greatest extent that they invest more effort (38.3 %) or
the same amount of effort (26.7 %) when working from home compared to work
before the pandemic crisis. Employees have reported that they work equally (36.7
%) or more (26.7 %) when working from home. A quarter of the participants
report that it is harder for them to organise work from home, and a third of them
is the same in comparison to organising work before a pandemic. More than half
of employees report that their companies do not compensate for their costs arising
from work from home. Most participants perceive their job as equally secure or
insecure as usually. e third of employees have stated that companies will strive
to organise the work from home in the future also. Most of them (41.7 %) stated
that the work productivity is the same as before pandemic situation, as well as the
quality of online meetings in comparison with live meetings (40 %). In general,
employees are least satisfied with the fact that their company does not compensate
their costs when working from home.
ese results will be used for the next research and the formation of an adequate
model of management control system which will be designed according to the
newly created working conditions.
5. CONCLUSION
e global pandemic crisis caused huge changes in every business process and
forced companies to establish different business organizations. e management
control systems had to adopt to the new environment and all concepts had to be
redesigned according to the unexpected situation. e basic role of controlling
refers to connecting all parts of the organization according to the constructs of a
management control system. As the main constructors of controlling; aggregation,
timeliness, and integration, were severely disturbed by the onset of the crisis, the
analysis questioned the new settings and models in controlling should be defined.
e starting point in the research was to define the main relationships that deter-
mine controlling model. e assessment was made by factor analysis. e analysis
examined the availability of the aggregation, timeliness, and integration during
pandemic times.
26 Parker, L. D.; Jeacle, I., e Construction of the Ecient Oce: Scientic Management, Accountability,
and the Neo‐Liberal State, Contemporary Accounting Research, Vol. 36, Issue 3, 2019, pp. 1883-1926.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES (ECLIC) – ISSUE 5
780
e results show that stronger coordination between various departments and ar-
eas causes internal, external, financial, and non-financial information more avail-
able what makes the integration a significant element in the model even in the
period of pandemic. e analysis of the second important feature, the timeline,
confirmed that greater timeliness does not lead to a greater availability. e find-
ing was contrary to the existing evidence and theory. e cause of the new pos-
tulate is connected to pandemic crisis and new organization of business process.
Although this research faced certain limitations, according to the relatively small
sample and short observation period, the results are useful to the scientific and
professional public, as well as to the management of various organizations, for
designing new management control system.
is paper offers recommendations for further research, based on the results of
remote working experiences at the time of the pandemic, concerning amount of
working effort, organization of remote working, costs of working at home model,
the work productivity and future trend predictions of working model.
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