A Behavioral Intervention Approach for Small Business Consultants: Implementing Forecasting Techniques

By Sanders, Nada R.; Owen, Crystal L. et al. | Journal of Business and Entrepreneurship, October 1992 | Go to article overview

A Behavioral Intervention Approach for Small Business Consultants: Implementing Forecasting Techniques


Sanders, Nada R., Owen, Crystal L., Scherer, Robert F., Journal of Business and Entrepreneurship


ABSTRACT

Over the last twenty years a variety of quantitative forecasting techniques have been developed and applied in organizations as diverse as manufacturing, marketing, and service concerns. Large firms typically have specific staff positions allocated to performing the forecasting function. Although the same forecasting techniques can be applied in smaller organizations, their acceptance has not been widespread.

An effective way for small businesses to develop formal forecasting procedures is through the services of a small business consultant via either Small Business Development Centers or Small Business Institute programs. To aid consultants in implementing quantitative forecasting techniques in small businesses, organizational barriers to adoption are identified, followed by a discussion of behavioral interventions and implications.

INTRODUCTION

Organizational forecasting is the process of estimating future events for the purpose of effective planning and decision making. It is one of the most critical organizational functions; the forecast enables managers to anticipate the future and to plan accordingly. The organizational forecast serves as a basis for all other business decisions. The quality of these business decisions can only be as good as the forecast upon which they are based. Forecasts are used to set production schedules, budget capital and allocate resources to programs. Forecasting accuracy has been made more difficult in today's economy with unstable business conditions. On the other hand, availability of technology such as computers and forecasting software has enhanced the forecasting process.

The field of formal forecasting has developed numerous quantitative forecasting techniques (QFTs). However, surveys of business managers show that organizations predominantly rely on judgmental forecasts (Dalrymple, 1987; Mentzer & Cox, 1984; Sparkes & McHugh, 1984). This can create problems for organizations that value accurate forecasting. Research comparing accuracy of judgmental and quantitative methods shows quantitative techniques to be superior both in terms of accuracy as well as timeliness (Armstrong, 1985; Hogarth & Makridakis, 1981), though judgmental forecasts can provide advantages under certain circumstances (Makridakis, Wheelwright, & McGee, 1983). Further, there is a large literature base that points to the numerous biases inherent in judgmental forecasting (Hogarth, 1987). These biases include lack of consistency, tendency to overforecast, anchoring effects, and wishful thinking.

In the smaller firm forecasting is generally viewed as a complicated set of tools which require a great deal of sophisticated data processing resources, complicated mathematical models, and expertise for interpretation (Wacker & Cromartie, 1979). However, it is the smaller firm, with reliance on competitive advantage and niche identification, that so critically needs to utilize forecasting methods. In addition, smaller firms typically have more restricted budgets; therefore, effective management of resources is more critical in these firms. To increase acceptance and use of quantitative forecasting methods in smaller firms, it is the small business consultant, through Small Business Development Centers (SBDC) and Small Business Institute (SBI) programs, that can play a decisive role. The SBDC and SBI should serve as the points of access for small businesses to receive such services. The success of implementation of formal forecasting will rest upon the ability of the small business consultant to understand not only small business needs and forecasting methodologies, but the behavioral implications of such a process.

In order to aid the small business consultant, this paper develops a prescriptive model and guidelines for use when assisting the small business in developing and implementing formal forecasting procedures.

We begin by taking a normative approach to identify the main organizational barriers to accepting and using formal forecasting techniques. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Behavioral Intervention Approach for Small Business Consultants: Implementing Forecasting Techniques
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.