FORESEEING CORPORATE FORESIGHT - A study of corporate foresight and future orientation in annual reports

Abstract: Corporate foresight is the techniques, practises and processes of how firms detect, interpret and respond to change in their environment. Since corporate foresight benefit firms, this is something which they should want to communicate to share- and stakeholders. Based on this, the purpose of this study is to determine which industries communicate corporate foresight and if it is related to their performance. To determine this, two different analyses were performed. Firstly, a content analysis of corporate foresight keywords in the CEO letters of the annual reports was made. The amount of keywords was put in relation to a literature based ranking which was made for the investigated industries. The empirical results resembled the literature based ranking, implying that an industry’s expected level of corporate foresight is reflected in their CEO letter. Secondly, the amount of corporate foresight keywords collected in the content analysis were used in a regression analysis between corporate foresight keywords and the performance of the industries. The aim being to determine if a firm’s performance, in terms of growth, performance, innovation and flexibility, affected the amount of corporate foresight keywords. A relation could be detected in all industries but it varied in strength and in positive/negative values in the investigated industries. This implies that the external communication of corporate foresight is, to a varying degree, affected by a firm’s performance and that this is visible in the CEO letter of an annual report.