Forecasting in Austrian companies: Do small and large Austrian companies differ in their forecasting processes?. Issue 3 (9th November 2015)

• Record Type: Journal Article
• Authors: Hofer, Peter; Eisl, Christoph; Mayr, Albert
• Editors: Othmar M. Lehner, Professor
• Is Part Of: Journal of applied accounting research. Volume 16:Issue 3(2015)
• Page Start: 359
• Page End: 382
• Publication Date: 2015-11-09
• Subjects: Management accounting -- Finance -- Risk management -- International accounting; Accounting -- Periodicals; Accounting -- Research -- Periodicals; 657.072
• DOI: 10.1108/JAAR-10-2014-0113
• Languages: English
• ISSNs: 0967-5426

Abstract

Abstract : Purpose: – The purpose of this paper is a comparison of forecasting behaviour of small and large Austrian firms, analysing their forecast practices in a volatile business environment. Design/methodology/approach: – The empirical analysis of the paper, deductive by nature, was conducted by means of a quantitative online-survey (199 data sets). The relationship of perceived volatility and forecast predictability was evaluated by correlation analysis. t -Test and analysis of variances were used to examine significant differences in the forecast characteristics between small and large Austrian companies and different industries. Findings: – The study provides evidence that the surveyed companies have been hit by volatility, showing that Austrian SMEs are significantly more severely affected than large companies. The increasing volatility correlates with a reduced forecast predictability of sales quantities and commodity prices. Large Austrian companies primarily use a broad spectrum of qualitative forecasting methods. In contrast, Austrian SMEs utilize simple quantitative and qualitative forecast techniques, like the forward projection of historical data. Research limitations/implications: – Relevant for the forecasting of small and large companies. Practical implications: – Although management requests a broad spectrum of forecast qualities, the current usage of less sophisticated methods reveals a gap between intention and reality. Companies that supplement their qualitative techniques by sophisticated quantitative ones should expect less forecast bias. Originality/value: – This paper initially compares forecast methods in large and small Austrian firms and additionally provides the impact of volatility on the forecast predictability.