Scenario Planning Essay

Scenario Planning Essay

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Nowadays business leaders need to understand environment which is going to be more complex. Organisations are open system so that organisations need to adapt environment which they operate in. Matridakis, Hogarth and Gaba (2010) argued that traditional tools did not fit well to new complex environment. Although complex environment and level of uncertainty cannot be explained by forecasting, most of the traditional method including strategic planning and organizational development method are tried to use past trends and forecast future. Therefore, scenario planning gets more recognition from the manager whose company operates in such kind of volatile, uncertain environment. Kahane (1992) (Cited in Charmack et al 2001) scenario planning is an effective method for understand critical future uncertainties and investigating drawbacks of the organisations.
There are so many aspect and definition of scenario planning. “Scenario“ means an outline or synopsis of a play. The word scenario is derived from the Italian word scena, scene, that comes from the Latin scaena. According to Schwartz (1998:6) scenarios present alternative of future. Kahn and wiener (1967) defined “ Scenarios are narrative description of future”(Cited in AC/UNU Millennium Project) Porter (1985) defined scenarios “an internally consistent view of what the future might turn to be – not forecast but one possible future outcome” There is big argument on the scenarios, whether it is static or dynamic. Becker (1983) defined that scenarios are people imaging for future like photo. Although Wack (1985), Schoemaker (1991), van der heijden (1996) supported dynamic view of scenarios and they stated that Scenarios are the process of evolution that was linked to strategic devel...

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In conclusion, scenarios are related to future, according to some of the authors scenarios have a static vision, but for the others scenarios include dynamic aspects. Scenario planning is process of positioning plausible scenarios. Some of the author in this field using different name for scenario planning such as scenario thinking, scenario based planning. It includes two sides, first scenario development and then strategy development. O’brien (2003) stated that scenario planning is a soft problem structuring method and qualitative approach. Schoemaker (1997) stated that scenario planning allows more subjective element and macro environment variable than computer simulation programs. Also these methods include system dynamics and risk analysis. It is easy to conclude that scenario planning is a managerial tool of strategic thinking (Bood and Postma 1998).

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