Strategic Planning and Forecasting Fundamentals
THE STRATEGIC MANAGEMENT HANDBOOK, Kenneth Albert, ed., New York: McGraw Hill, 1983
31 Pages Posted: 16 Jan 2005 Last revised: 1 Jan 2012
Individuals and organizations have operated for hundreds of years by planning and forecasting in an intuitive manner. It was not until the 1950s that formal approaches became popular. Since then, such approaches have been used by business, government, and nonprofit organizations. Advocates of formal approaches (for example, Steiner, 1979) claim that an organization can improve its effectiveness if it can forecast its environment, anticipate problems, and develop plans to respond to those problems. However, informal planning and forecasting are expensive activities; this raises questions about their superiority over informal planning and forecasting. Furthermore, critics of the formal approach claim that it introduces rigidity and hampers creativity. These critics include many observers with practical experience (for example, Wrapp, 1967).
This chapter presents a framework for formal planning and forecasting which shows how they interact with one another. Suggestions are presented on how to use formal planning for strategic decision making. (For simplicity, references to planning and forecasting in this chapter will mean formal strategic planning and forecasting.) Planning is not expected to be useful in all situations, so recommendations are made on when planning is most useful. Descriptions of forecasting methods are then provided. Finally, suggestions are made on which forecasting methods to use when developing plans for a company.
Keywords: Forecasting, strategic planning, strategic decision making, forecasting methods
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Strategic Planning Improves Manufacturing Performance
Evidence on the Value of Strategic Planning in Marketing: How Much Planning Should a Marketing Planner Plan?
The Value of Formal Planning for Strategic Decisions: A Reply
Review of Corporate Strategic Planning
Book Review of Corporate Strategic Planning, by Noel Capon, John U. Farley, and James M. Hulbert, New York: Columbia University Press, 1988
First Do No Harm: A Test of the Determinants of Negative Planning Outcomes
On the Effectiveness of Marketing Planning