Environmental forecasting

Strategic management involves making organisational decisions in conditions of considerable uncertainty. The result of such decisions can be failure of the business. Hence to reduce the uncertainty and risks attached to decisions about the future forecasting should be done together as much relevant information and data about the organisation itself. Main competitors and the rest of its external environment (world).

In strategic context forecasting refers to any attempt whether qualitative or quantitative and usually based on past performance to predict future outcomes and trends in the internal and external environment of an organisation inorder to limit the risks involved in formulating and implementing a strategy.

Strategic issues and areas requiring forecasting:-

•    Organisational performance (past – current and future).
Any assessment of organisational performance is likely to focus on the following:-
•    Organisations market segments
•    Product/service range
•    Sales (by product, service, brand, market etc)
•    Costs (production, sales and overheads)
•    Research and development efforts
•    Investment programmes
•    Organisations structure
•    Management style (including delegation and control)
•    Personnel (Numbers, skills, training and effectiveness)
•    Management Accounting system
•    Financial management activities of the organisation

ii)    Trends in the external political, economic, social cultural, technological, physical and competitive environment.