Predicting the future is difficult. However, it is the key to success in many industries including the stock market. Many companies announce their results, and while doing so, talk about their expectation of performance in a given period (August, Mayer, & Bixby, 2012). This is assumed by these companies to go a long way in helping investors to make decisions. While these expected forecasts may be an important indicator of the company’s future and where it is headed, investment experts opine that it cannot be the sole basis for an investor’s decision. Different companies adopt different methodologies. Big technology companies like Infosys and Wipro give use or give earnings guidance. Some, may, however, give revenue estimates as is the case at Larsen & Toubro. Others like Auto companies use guides on sales while pharmaceutical companies give guidance on revenue growth (Wagner & Hollenbeck, 2009). Banks on the other hand provide estimates of credit growth.
The impact of guidance may create a scenario where a company may over or underplay the guidance. Against this background, it is important to know what other companies in the sector may be expecting. The reliability of a company may be weighed against one’s own understanding or by looking at the overall sector situation and the economy (August, Mayer, & Bixby, 2012). It is important for companies to engage in continuous monitoring and not have a conservative but an optimistic approach towards economic environment.
Guidance also depends on the state of perception of company in its industry. Perception of volatility will, for instance result in more conservative guidance while companies that tend to enjoy more confidence with their business environment may be overly optimistic and upgrade their guidance. This scenario compels companies to secure keen insights into assumptions both micro and macro levels (August, Mayer, & Bixby, 2012). The environment scans will help determine the levels and dimensions of guidance irrespective of the fact that companies in all sectors may purely want to accurate in its guidance. This, notwithstanding certain volatility, regulatory environment and political uncertainty, may conspire against more reliable guidance (August, Mayer, & Bixby, 2012).
Growth is a future challenge for many businesses. Indeed few companies live to the next decade. While trying to grow many businesses get into the common misstep of focussing on gaining new business. Ideally, many feel, correctly, that it may be more gainful to focus on what they already have like their internal staff and external customers. This may be a great key to success (Wagner & Hollenbeck, 2009). Businesses may grow or achieve development by, for instance, focussing on customers, hiring slowly, and investing in professional development of the employees for higher impact of productivity.
The philosophical approach to business of the strategic management process must consider the five stages of the process namely goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring. The process incorporates the control systems that help in value assessments correction of deviations and continuity monitoring. Company visions, with clearer and specific objectives, can help attain alignment to its strategic planning to meet the performance goals and create sustainable future programs and measures to further progress (August, Mayer, & Bixby, 2012). Metrics such as customer focus, financial probity and human resource development could be quite reasonable parameters of long-term control which may zero in into broad global trends, for the long-term developments that are shaping our world including the emerging markets power, competitive advantage from cleantech, recovery of banking through transformation, enhancing ties with the government sector rapid technology innovations and demographic shifts.
References
August, R., Mayer, D., & Bixby, M. (2012). International Business Law: Text, Cases, and Readings. New York: Pearson Education, Limited.
Wagner, J., & Hollenbeck, J. (2009). Organizational Behavior: Securing Competitive Advantage. New York: Routledge.
