Competition and Controlling in Higher Education, a Crucial Segment of the Public Sector

Among the diversified areas of controlling, this paper focuses on the role of financial as well as cost and P&L controlling – as management supporting tools that are indispensable for the successful governance and efficient decision-making mechanisms of entities operating in a competitive environment – in the Hungarian public sector. The basic question is to what extent market competition is present in the life of organisations fulfilling community tasks, which needs to be and may in fact be answered by developing either strategic or tactical or operative management functions and controlling. As far as higher education is concerned, it can be said beyond doubt that as a result of market competition – which has intensified in Hungary as well as internationally – the processes that lay an increasing emphasis both at industry and at institution level on the role of strategy building and planning, including performance measurement at entity as well as organisational unit level, strengthening the role of controlling, have started. It can also be seen that in the management supporting role of controlling tools, the cash accounting of the budget still plays a dominant role as compared with accrual accounting, the underlying cause being the different characteristics of management of profit-oriented companies and of organisations spending budget allocations, and the different proprietary attitudes of these two types of businesses.