Question 2

Part 1- Describe forecasting, contingency planning and scenario planning.

Forecasting involves making assumptions about what will happen in the future and how that will
affect a company. Qualitative forecasting is based on personal human judgement. Quantitative
forecasting on the other hand involves numerical measurements and analysis of historical data and a
degree of human judgement. A limitation of forecasting, regardless of whether it is quantitative or
qualitative, is its reliance on human judgement. An example of this problem is often highlighted in
the automobile industry where manufacturers have to predict fickle style preferences well in
advance of actual car releases.

Contingency planning is the process of identifying alternative courses of action that can be used if
and when an original plan proves inadequate. For example how a company will react if interest
rates go up or employment rates decrease.

Scenario planning is essentially the same as contingency planning; only its focus is on identifying long
term/ future scenarios and how to react to those. The purpose of scenario planning is to increase an
organisations ability to recover from future shocks such as the global economic crises. By having a
pre organised plan, companies can adapt quickly.

Part 2- What is organisational control?

Organisational control is the ongoing monitoring of an organisation. It is a systematic process

through which managers regulate organisational activities to make them consistent with
expectations established in plans, targets and standards of performance.

Part 3- Describe three types of control, feedfoward control, concurrent control and feedback
control. Explain the differences between these types of control.

feedfoward control focuses on the regulation of inputs to ensure they match standards. Feedfoward
controls are desirable because they allow management to prevent problems rather than having to
react to them later. The focus of feedfoward control is on the quality of resources. An example of a
feedfoward control is a quality certification of one’s raw materials.

Concurrent control takes place while an activity is in progress. The focus is on the regulation of
ongoing operations to ensure they meet organizational standards and are going according to plan.
Concurrent control can otherwise be termed screening as it often involves ‘checkpoints’ at which
determinations are made about whether to continue a process, take corrective action or stop the
work altogether.

Feedback controls take place after the work/process is completed. The focus is on the quality of end
results compared to desired levels. Feedback controls are good for providing useful information for
improving future operations. An example of a feedback control is a company’s annual or monthly
reports.

The essential difference between the tree controls is when the evaluation occurs. Feedfoward is
before the process is underway, (for example the mechanical check of a plan before the flight,)
concurrent is while the process is underway, ( for example the continuous checks pilots make while
flying a plane,) and finally feedback control occurs at the end of a process, ( for example at the end
of the flight and evaluation is made.)