Scenario Planning in Modern Day Business

RUNNING HEAD: Scenario Planning 0
FBL5010

Scenario Planning 1
Contents
INTRODUCTION.................................................................................................................................1
Literature Review..................................................................................................................................2
CONCLUSION.....................................................................................................................................6
REFERENCES......................................................................................................................................6

Scenario Planning 2
INTRODUCTION
The scenario planning is an organized way for the managers to think about the future of an
organization. It identifies a specific set of uncertainties which might happen in the future
(Amer, Daim & Jetter, 2013). In an organization, managers use scenario planning to cope up
with the unlikely situations. Scenario planning is a tool of strategic planning. It enables
managers to test future strategies. The scenario planning has become an integral means of
management and is utilized in the capital intensive industries (Abdallah & Langley, 2014).
This is done seeking not only the benefits of the organisation but also the benefits that it
provides to society. This works in favour of the goodwill of the company. It does not focus
on predicting future but creates possibilities for the future which are credible (Varum &
Melo, 2010). The managers can gain benefit from the scenario planning for its organization
concerning safety of environment. The managers can use scenario planning for the systematic
thinking. It has been experienced that the persons having interest in chess always keep a
variety of possible scenarios in the upcoming steps. The scenario planning provides a
preventive mechanism to the managers. It also helps managers to reduce possible scenarios
based on logic and empirical facts by making use of business acumen and the immediate
perception. It looks trends in the evolution of things, shapes and impacts changing trends in
the structure.
Literature Review
Klatt, Schlaefke & Moeller, (2011) believes that the managers can also make use of
systematic thinking derived from the scenario planning to take into account various factors
which can affect the decision of making overall well-depth analysis (Chermack, 2011). It
supports them to avoid narrow personal bias. The optimum allocation of the resources can be
made with the help of scenario planning as it predicts the possible future scenarios. The
managers can match internal resources to the external environment in order to allocate
resources in an effective and rational manner. This works in parallel with resources planning
and helps the company in utilisation of their resources for the longer period of time. It makes
managers to be more aware of the external environment, company’s status and future
directions. It helps in stabilising the business in the current and the future situations. The
weak signals can be identified which can cause uncertainties in the future. Scenario planning
aims to eliminate these uncertainties so as to ensure that companies might not face any
business failure chances. The managers prepare themselves to tackle new situations and