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Forecasting:Process of predicting future conditions that will influence and guide the activities, behavior and performance Features:1. Probability based2. Analyze past and present3. Specialized activity4. Based on data collection (internal & external

sources)5. Quality depend on reliability6. Long term and short term7. Several types i.e. economic forecast, weather

forecast, sales forecast

Prepared by - Rajveer Bhaskar

Prepared by - Rajveer Bhaskar

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Importance of forecasting:1. Key to planning

2. Means of coordination

3. Basis for control

4. Executive development

5. Facing environmental challenges

Limitation of forecasting:6. Based on assumptions

7. Not absolute truth

8. Time consuming & expensive

Prepared by - Rajveer Bhaskar

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Steps in forecasting process:1. Developing the ground work2. Estimating future trends3. Comparing actual with estimated results4. Refining the forecast

Techniques of forecasting:A. QuantitativeB. Qualitative

Prepared by - Rajveer Bhaskar

Techniques:1. Time series analysis – trend, sessional, cyclic and random

variations 2. Extrapolation – year and sale3. Regression analysis – advertising and sales4. Input output analysis – sector wise (petrol consumption)5. Econometric models – mathematical models for several parameters6. Historical analogy – India vs US economy7. Business barometers – consumer price index, nifty, Sensex, gross

national product 8. Panel consensus – opinion polls9. Delphi technique – blind surveys10. Morphological analysis – technological changes

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Prepared by - Rajveer Bhaskar

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MBO:Rational & systemic approach for goal setting in consultation with subordinate and contribution of each individual judged in terms such goals.Objectives of MBO:1. Measure & judge performance2. Relate individual performance to organizational goals3. Job done and expectations4. Foster increasing competence & growth of

subordinates5. Enhance communication6. Judgment basis for salary & promotion7. To stimulate motivation 8. Device for organizational control & integration

Prepared by - Rajveer Bhaskar

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Features of MBO:1. Goal orientated2. Participation & contribution3. Blend & balance the goals4. Dynamic system (company need & personal

development)5. Attain maximum result from available resources6. Linkage between organizational & individual goals7. Continuous process of goal setting, periodic

appraisal & modification of goals & performance8. Set evaluation mechanism

Prepared by - Rajveer Bhaskar

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Steps in MBO1.Preliminary goal setting2.Setting subordinates objectives3.Recycling objectives4.Action planning5.Periodic performance review6.Final appraisal

Prepared by - Rajveer Bhaskar

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Advantages of MBO:1. Improved planning2.Team work3.Effective self control4.Objective appraisal5.Motivation & morale

Prepared by - Rajveer Bhaskar

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Limitation of MBO:1.Goal setting problems2.Time consuming3. Increased paperwork4.Pressure oriented5.Undermining leadership6.Participation problem7. inflexibility