Group identity, trust and (corporate) culture as drivers for forecast adjustments in a German multinational corporation

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Volume Title

School of Business | Master's thesis

Authors

Date

2015

Department

Johtamisen laitos
Department of Management Studies

Major/Subject

MSc program in Management and International Business
MSc program in Management and International Business

Mcode

Degree programme

Language

en

Pages

206

Series

Abstract

In volatile markets, demand forecasting becomes increasingly difficult. Usually, quantitative models are used to produce an initial statistical forecast while demand planners can manually review and adjust these forecasts if necessary. If special information is available that has not yet been incorporated into the statistical forecasts, adjustments can significantly increase forecast accuracy. However, often also unnecessary adjustments are performed. In this course, the influence of underlying behavioural concepts such as group and corporate identity or trust on the demand planners' adjustment behaviour will be discussed. Forecast data from a German Multinational Corporation are collected and analysed. Hereby, two demand management processes where forecasts are produced first by an external service provider and second from an internal department are compared to each other. In both processes, the demand planners' adjustment behaviour is analysed. Furthermore, interviews with the demand planners are conducted in order to bring light into their decision making process. Results from both the forecast data and the interviews show that above all group identity and trust play a key role in determining the adjustment behaviour. Despite lower forecast accuracy, statistical forecasts deriving from within the case company are significantly less often adjusted, which gives support for a strong group identity. Also, the demand planners seem to trust the internal forecasts more which results in fewer adjustments. However, these results are rather an effort to understand demand planners' adjustment behaviour better.

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Keywords

Forecast Adjustment, Group Identity, Trust

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201602161381

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[gradu] Kauppakorkeakoulu / BIZ