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Scenario Planning Essay

1086 words - 4 pages

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 development.
Becker (1983) identifies three purposes for scenarios: “(1) to estimate if various policies and actions can assist (2) to assess how well alternate policies and strategies would perform under the conditions depicted; and (3) to provide a common background for various group involved in planning within an organization”. Similarly Burt andChermack (2008) showed that three element which are part of scenarios, (1) analysis of current events. (2) how future world would be (3) description of future However nearly all of the authors agree to scenarios are not prediction or forecast and that are not aim to get “right” future. (Schoemaker 1991)
Scenario planning can be defined various way. Scenario planning is one of the most common qualitative tools of future forecasting. “Scenario planning is a process for rediscovering the original entrepreneurial power of creative foresight in contexts of accelerated change, greater complexity, and genuine uncertainty” (Wack,1985) Chermack & Lynham (2002 p 343) defined scenario planning as "a process of positing several informed, plausible and imagined alternative future environments in which decisions about the future may be played out, for the purpose of changing current...

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