Politics of Forecasting: Managing the Truth

“Politics of Forecasting: Managing the Truth”

        By execution of a comprehensive forecasting analysis, Craig S. Galbraith and Gregory B. Merrill uncover the truth regarding the methods in which certain environments, cultures, and processes interact to generate forecasts based on quantitative and qualitative techniques. Focus was placed on the incentives for forecast politics, manners associated with the influence corporate politics places on science and staff, control factors, decision making, and recommendations in regards to improving the process and results of forecasting. After thorough examination, the results are not only shocking but slightly disturbing.

        After reading this article, I was appalled at the high degree of unethical behavior practiced in a multitude of organizations. In fact, as the authors’ state, “Misinforming the public, under the guise of forecasts and computer models, appear to have taken firm root in the culture of many organizations.”  Just like there are two sides to every story, I feel two perspectives are equally as arguable in regards to the inaccurate portrayal of forecasts. An outside consumer would question why so many companies inaccurately portray forecasts. Inaccurate forecasts lead to loss of marginal value, decreased inventory space, and so on, essentially creating greater customer savings. From an organizational standpoint, however, with the lenience of creating mis-specified models and the corresponding difficulty to track these misspecifications, why wouldn’t an organization alter forecasts? In these situations organizations are provided greater external and internal benefits such as funding to better a certain division or department. As demonstrated in the study, more often than not companies chose to create a highly manipulative environment, employing all methods to forecast alternations.

        I think Irving Janis’s article, “Groupthink” is very relatable to these situations. Recalling that groupthink is defined as thinking or making decisions as a group, the dimensions of forecasting and modeling research are highly dependent of a variety of individuals. Groupthink can be beneficial or it can be destructive. Typically, in groupthink there is a designated “mastermind,” or in this case the “elite” senior management executive. Senior Management may order unethical decisions to take place and if members of the less reputable staff want to stay employed, no objections are made. Hence, good people are put in bad situations as they are forced to practice the unethical behavior adopted by senior management. So with all this in mind, what measures do we take for proactive control?