The Forecast
The Forecast
THE FORECAST
The word forecast comes from foresee, which is “to see in advance” or to try to see in
advance what is going to happen.
Then we will understand forecasting as that stage of the administrative process where it is
diagnosed through relevant data from the past and future, in such a way that social,
political, economic, technological, etc. contexts can be built.
The purpose of foresight is for every administrator to be visionary, but at the same time
foreseeable, since currently the only constant is “change” and we must be prepared to
face it.
Foresight involves seeing ahead, and answers the question, what can be done?
It is a necessary basis for planning since it sets objectives and proposes the selection of
courses of action.
GENERAL PRINCIPLES OF FORECASTING:
The word foresight (foresee: to see in advance) implies the idea of a certain anticipation of
future events and situations that the human mind is capable of carrying out and without
which it would be impossible to make plans: therefore, foresight is basic for planning for
Making forecasts is essential.
a) Set the objectives or purposes to be pursued
b) Investigate the positive and negative factors that help or hinder the pursuit of those
objectives.
c) Coordinate the different means in various alternative courses of action, which allow
choosing one of them to carry out the plans.
Drucker calls “the fallacy of the only way.” Thus, foresight can be defined as the element of
administration in which, based on the consideration of the future conditions in which a
company will find itself, revealed by technical research, it is determined the main courses
of action that will allow that same company to carry out.
principles of predictability
When it comes to knowledge of future situations, it is necessary to establish a prior
principle that guides the validity of the forecasts, since without it it would be useless to
make them, and above all that helps to make them with the greatest possible reliability.
“Administrative forecasts must be made taking into account that they will never achieve
complete certainty, since, due to the number of factors and the intervention of human
decisions, there will always be a risk in the company: however, it is not valid to say that a
company constitutes a totally uncertain adventure.
Administrative foresight rests on a moral certainty or serious probability, which will be the
greater the more it can be supported by past experiences, one's own or those of others,
and the more statistical research methods or probability calculation methods can be
applied to said experiences.
application of the principle
Remembering the different states in which the mind can find itself when faced with the
truth, especially for predicting the future, there are three basic situations:
a) Certainty. Moral certainty is given when, due to certain circumstances, there is security
that is very difficult to be frustrated. Compliance with the laws of supply and demand,
especially for very large social groups and in extreme situations.
b) Uncertainty. For the purpose of forecasting what will happen, it implies absolutely
lacking elements to be able to predict how future events will occur.
c) Probability. It is constituted by that state in which there is no certainty about the direction
in which an event, or a series of them, will occur.
The probability may be greater or lesser, ranging from almost total uncertainty to
enormous moral certainty.
Principles of objectivity
“Forecasts should be based on facts rather than subjective opinions.”
It is known that the businessman always asks for “facts to draw conclusions. The success
of a company and each operation rests on the quantity and quality of the information
available.
However, in administrative matters the facts are often confused or involved in opinions or
criteria. Thus, if a survey is carried out among the personnel about the possibilities of a
new system, it may happen that it is stated that there are no serious possibilities of
success and the conclusion is in the same sense, although it has not been based on a fact
but on an opinion that may have been formed by routine, union pressure, etc. Facts and
opinions are interesting, especially the latter to appreciate and relate the facts, but the
need to separate and distinguish them is obvious. The greater the analysis, combination,
refinement, etc., of past results and the correction of forecasts about what is really
happening, these began, in their own expression, “playing the budget” and currently work
rigorously based on budgets. .
Hubbard mentions: “Go as far as you can see, and from there you can see even further.”
Measurement principle.
Forecasts will be all the more certain the more we can appreciate them, not only
qualitatively but also in a quantitative or measurable way.
When it comes to technical things, quantification adds security and precision. Until recently
it was considered that problems were connected or dependent on social life and human
freedom.
It is indisputable that it is currently possible to determine many of these future events on a
quantitative basis, especially through statistical studies. These allow determining the
trends that occur between a group of facts, determining the correlation between these
same facts and their causes, measuring or determining the normal or standard error
coefficient, etc. It can be said that the application of statistics and other branches of
mathematics have made the forecasting of many events technical, or even scientific.
Rules for setting goals
• Clarity: An objective must be clearly defined, so that there is no doubt left in those who
are responsible for participating in its achievement.
Your language must be strict and concise, so that it can be easily understood and
communicate exactly what you want. Words that are not vague or imprecise should be
used, such as, for example. Understand, estimate, suppose, many, few, etc.
• Flexibility: Objectives must be flexible enough to be modified when circumstances require
it. In other words, they must be flexible to take advantage of environmental conditions.
• Measurable or measurable: The objectives must be measurable over a time horizon to be
able to determine their fulfillment with precision and objectivity.
• Realism: The objectives must be feasible to achieve within the established conditions
and deadlines.
• Coherence: An objective must be defined taking into account its usefulness for the
company. The objectives for functional areas must be consistent with each other, they
must not contradict each other.
• Motivation: The objectives must be defined in such a way that they become a motivating
element and a challenge for the people responsible for their fulfillment.
GOALS
We use objectives to express what we want to achieve, they are the specific results that
we want to obtain as a result of the administrative process. An objective expresses an
intent that describes a proposed change that is measurable and observable. Setting
objectives legitimizes the organization.
In themselves, the objectives are hypotheses that indicate what we want to achieve as a
preconceived result through the performance of activities and the use of resources. Like
any scientifically preconceived hypothesis, it requires necessary and sufficient elements to
be achieved.
Forecasting must point out and follow them to reduce uncertainty, which always, although
to varying degrees, occurs in organizations.
Although it may seem obvious, the correct definition and proper prioritization of objectives
must be specified and observed since sometimes they are lost from sight and things that
are very different from the purposes of the organization are pursued.
classification of objectives
We present some of the most used classifications:
1. Individual and organizational objectives
2. Short and long term goals
3. General and particular objectives
4. Hierarchy of objectives
Some rules for creating objectives:
Objectives must be formulated as completed actions
The objective must be set in writing
The objective must be perfectly known and loved by all those who have to help
achieve it.
Goals must be stable