Economic trends and events affecting businesses include the following possibilities:
• Depression; worldwide economic collapse
• Increasing foreign ownership of the U.S. economy
• Increasing regulation and management of national economies
• Several developing nations become superpowers (e.g., Brazil, India, China)
• World food production: famine relief versus holistic management
• Decline in real world growth or stable growth
• Collapse of world monetary system
• High inflation
• Significant employee-union ownership of U.S. businesses
• Worldwide free trade It is not unrealistic to say that all companies, small or large, that are engaged in strategic planning examine the economic environment.
Relevant published information is usually gathered, analyzed, and interpreted for use in planning. In some corporations, the entire process of dealing with economic information may be manual and intuitive. The large corporations, however, not only buy specific and detailed economic information from private sources, over and above what may be available from government sources, but they analyze the information for meaningful conclusions by constructing econometric models. For example, one large corporation with nine divisions has developed 26 econometric models of its different businesses. The data used for these models are stored in a database and are regularly updated. The information is available online to all divisions for further analysis at any time. Other companies may occasionally buy information from outside and selectively undertake modeling. Usually the economic environment is analyzed with reference to the following key economic indicators: employment, consumer price index, housing starts, auto sales, weekly unemployment claims, real GNP, industrial production, personal income, savings rate, capacity utilization, productivity, money supply (weekly M1: currency and checking accounts), retail sales, inventories, and durable...