Foresight practices and the influence on financial performance : A qualitative study on four manufacturing companies in the business-to-business environment.

Abstract:

Background: Foresight is a vague concept with several definitions. There is barely any existing practical evidence of how it should be conducted or what effect it could have on a company’s performance. Due to the lack of research done, a study within the field was justified.

Purpose: The purpose of the paper is to investigate and measure if, and how, foresight practices influence company’s financial performance.

Method and theory: A theoretical framework was established in order to compile knowledge about the field. These theories were used as a basis for upcoming in-depth interviews. To make foresight measureable the foresight maturity model was applied in order to assess the company’s foresight practices and to compare it with financial performance. The financial performance was assessed by doing an archival analysis on the company’s annual reports.

Findings: The study indicated that foresight practices were limited within the studied companies. However, all the companies used it to some extent.

Conclusion: The practices of foresight are greatly contextual and a clear relationship between how the foresight practices affect financial performance is difficult to map out and is need of further research. Tendencies of foresight practices influencing financial performance were however noticed. These tendencies indicated that there is a positive relationship between foresight practices and financial performance.