Establishment and use of a holistic controlling system for listed German corporations: A contribution to the current discussion on the “right” profit

Abstract

The recent discussions about the “right” profit in business administration have led to uncertainty in research and practice about which performance measures and business management concepts should be used to manage companies. The authors are of the opinion that this is only possible with the help of top financial ratios with regard to the shareholder value concept. Thereby, the methods of the weighted average cost of capital (WACC) approach and the capital asset pricing model (CAPM) should be used to determine the value of the company. In addition, non-financial goals should be included in the management processes with the help of the integrated balanced scorecard. Against this background, the authors develop a holistic controlling concept for listed companies, which can be used for strategic corporate management, taking into account the income tax effects relevant to decision-making.