Constructing the accurate forecast: an actor-network theory approach

Abstract

Purpose This paper empirically demonstrates the major organizational events of a rolling forecasting process and the roles of controllers therein. In particular, this study aims to investigate how the understanding of a “realistic forecast” is translated and questioned by various mediators in the rolling forecasting process and how it affects the quality of planning as the ultimate accuracy of forecasts is seen as important. Design/methodology/approach This study follows an actor-network theory (ANT) approach and maps the key points of translation in the rolling forecasting process by inspecting the roles of mediators. This qualitative case study is based on interviews with controllers and managers involved in the forecasting process in a single manufacturing company. Findings The paper identified two episodes of translation in the forecasting process, in which the forecast partially stabilized to create room for managerial discussion and debate. The abilities of controllers to infiltrate various functional groups and calculative practices appeared to be one way to control the accuracy of forecasting, although this was built on a façade of neutrality. Originality/value Prior literature identifies the aims of interactive planning processes as being to improve the quality of planning. The authors apply ANT to better understand the nature of mediators in constructing an entity called a “realistic rolling forecast”.

Business unit controllers' credibility and the hardening of local forecasts

“…To facilitate hardening, organizations often involve specialists who dispute, negotiate, and create alignment with others about how the future will unfold (see Mentzer et al, 1999). In multidivisional organizations (see Scott, 2003, p. 273), 2 this role is often assigned to BU controllers (see, e.g., Henttu-Aho et al, 2023) who, located at the intersection of local units and corporate headquarters, are expected to communicate the projected financial future of their unit upward. This role comes with the duty "to ensure that the information reported .…”

“…Notably, when corporate controllers considered the forecast uncertainty to be high, they seemed more skeptical of BU controllers who stressed their calculative capabilities and presented themselves as removed accounting experts (cf. Henttu-Aho et al, 2023). When corporate controllers accepted a framing of the future as well understood and almost bound to occur, they seemed more convinced of BU controllers displaying past-oriented and calculative capabilities.…”

“…Goretzki, Strauss, and Wiegmann (2018) illustrate how BU controllers rely on self-developed spreadsheets to prepare forecasts they consider accurate and resist central forecasting systems. Henttu-Aho et al (2023) further show how controllers intervene in operational business to control forecast accuracy while posing as impartial information intermediaries.…”