Assessment 4: Using Scenario Planning to Address Uncertainty

This report delves into the significance of scenario planning as a crucial activity for organizations in making vital decisions, particularly in the face of uncertainties. It addresses major managerial issues encountered in the second decade of the 21st century, referencing key theorists and comparing operational effectiveness with scenario planning management. The report highlights the importance of strategic leadership, emphasizing the need for adaptability and employee involvement in decision-making. It examines challenges related to organizational culture, ethical conduct, and the impact of uncertainty, including volatility, complexity, and ambiguity, on business operations. Various strategic planning techniques, such as Ansoff's strategic choices and SWOT analysis, are discussed as tools to navigate these challenges. The report underscores the necessity for managers to adopt innovative approaches to remain competitive and sustainable in the dynamic market environment.

USING SCENARIO
PLANNING TO ADDRESS
UNCERTAINITY

Table of Contents
Assessment 4..............................................................................................................................2
PART 1.......................................................................................................................................2
PART 2.......................................................................................................................................2
REFERENCES.........................................................................................................................10

Assessment 4
PART 1
Scenario planning is the important activity that can be performed by the organization
in vital decision making process (Amer, Daim and Jetter, 2013). The question states about
major issues that are being faced by the managers in second decade of 21st century. The
journals used are quite effective and efficient enough to describe the argument of the
statement in rightful manner as all the important aspects are considered in it. The statements
of famous theorists such as Peter Drucker, Porter etc have been considered. Further
appropriate comparison has been made between operational effectiveness with that of
scenario planning management. Social aspect of management issues has also been considered
which was mentioned by the famous author, Milton Friedman.
The major issues with respect to second decade of 21st century require appropriate
consideration of different problems that can affect the decision making of the management.
Further, it is also important to address varied tools and techniques that can be used by the
managers with the aim to reduce it impact which includes, BCG matrix, SWOT analysis etc.
Porter has discussed these models in his book which have been used by the managers of
modern era as well.
Hence, the journals that have been used are effective enough to discuss all aspect of
the management in second decade of 21stcentury.
PART 2
The essay aims at developing knowledge regarding major issues being faced by the
managers in second decade of 21st century. There are certain managerial issues that are faced
by the managers which hinders in the success of the organization. The success and downfall
totally depends on the abilities of the managers and they handle the issues being faced by the
organization in daily life.
Managerial role plays an important role in the success of the company. Better
implementation of the strategies helps in dealing with the issues faced in day to day life. The
most critical situation is faced in the second decade of 21st century in order to determine the

effectiveness in the functions of the organization. Strategic leadership is an important aspect
which is required to be implemented to win over the current market situation.
Scenario planning is the situation where decisions are made by the managers based on
the current prevailing situation in the environment and market. It helps in simplifying
complex future situations (Schwenker and Wulf, 2013). The problems can be increased
capital expenditure, entering into global alliance etc. Hence, appropriate steps are taken for
the most important factor that have the largest impact on the profits. It is important to follow
certain steps to make this process an effective one. These steps are mentioned below:
 To view all the possible trends that has significant impact on the functioning of the
organization, such as, entering new market, strategic alliance etc.
 To identify key drivers of the change
 Choose most important two drivers
 Developing the outline of scenario
 Determining the implication of each scenario (Ramírez and Selin, 2014)
 Summarizing the overall strategies
Strategic leadership helps in providing vision for the organization. It is the potential
withheld in the managers which helps in implementing workable strategy in the company
which ultimately helps in achieving the entity’s objective. The main focus of strategic
leadership is on productivity which plays a vital role in sustainability of the business and
remains competitive in the market (Wade, 2012).
It is the duty of a strategic leader to influence the workers and subordinates to move in
the similar directions and adopt organizational change taking place so that company’s
objectives can be achieved (Zainal, 2017). The responsibilities are well defined and
distributed in right manner so that they are aware that what duties are required to be
performed by them. It helps in encouraging their creative, skills and efficiency and skills as
well.
Entering into 21st century made various leaders realise that they cannot drive the
organization by themselves. The decision cannot be taken by an individual or a group which
gave rise to the requirement of involvement of employees in decision making. The employees
of the organization can be divided based on the department and strategic leadership can be

integrated in it. Reliable leadership by the leaders can help in remaining competitive in the
market (Porter, 1996).
Another important aspect of strategic leadership is dealing with human capital.
Workforce helps in undertaking different tasks and responsibilities in rightful manner.
Without having an effective and efficient workforce, the entity may not be operational
(Luftman and et.al., 2013). Hence, the other responsibility of strategic leader is to satisfy the
needs of the employees and workers as well. This is a crucial aspect in 21st century. Hence,
leaders have to find new and innovative way that can retain the employees for longer period
and reduce the employee’s turnover ratio and enhance their satisfaction level as well (Tzu and
Giles, 2017).
Another issue faced by the managers in the 21st century is with respect to the
organizational culture. It is the set of ideologies and value which an entity owns. An effective
organizational culture helps in making the enterprise more visible in the local and
international level market. It is difficult to clearly predict the future; however, managers can
take note from their past experience and develop better plans for tomorrow for the
organization.
Another important issue faced by the managers of the companies in the 21st century is
ethical conduct and image of the organization. Managers must ensure different ethical aspects
such as, honesty, confidentiality, trust, and integrity. These aspects act as a base while taking
any decision in the organization.
A certain kind of physiological capacity is required to manage the drawbacks of the
organization. It helps in converting cultural knowledge into actions. It is important to have
right kind of attitude to find out and diagnose the challenges that can be faced. Empowering
the subordinates in such a way so that they can be able to meet the deadlines and take
appropriate decisions at their end that can ultimately benefit the organization is the right way
to deal with the said matter.
The managers also face challenges in adapting the behaviour as well as it helps in
reducing the distress level. It helps in maintaining an environment that is appreciated by all
leading to being profitable for the company. Further, the companies are going online leading
the way towards less hierarchical structure. It becomes problematic in handling the uprising
issues in the organization (Jiang and et.al., 2012).

Uncertainty is an important aspect of the business as management cannot predict the
future accurately. There are various types of uncertainty that the managers have to deal with
It can be in the environment through political, economical, social and technological factors.
Underestimating the uncertainty can lead to hazardous situation in the entity. There are
various determinants of uncertainty in the environment. However, the three core elements of
uncertainty are volatility, complexity, and ambiguity.
Volatility shows that impulsion to a particular act and its intensity to it. It can further
be of two types which are firm level volatility and aggregate volatility. The firm level
volatility refers to any change in the workforce of the company, capital expenditure, or cost
of raw material. There is a strong influence of strategic decisions that can ultimately affect
the situation of an individual company. Shift in the price level of the raw material.
Change in the technology is also a significant aspect of volatility. A sift from radio to
social media website have changed the mind set and approach of the managers towards its
sales and customers. However, Aggregate volatility means large scale changes in the major
indicators of the company such as GDP growth in national, regional, and global level
economy. The recent US crisis reflected on the importance of firms and sectors in the
economy (Daley, 2012).
Another important aspect of uncertainty in the firm is complexity. Shift in the
approach of leadership, globalised initiatives, new and innovative products and services are
also come in the category of unpredictability as the elements in it are interconnected and
interacting as well. Minor impact on these aspects of the business can lead to major
consequences.
In today’s era, the company need to take care of the interest of the shareholders in
broader sense as they have to adapt the social consequences on the customer as well.
Corporate Social responsibility has become top most priority of people in the world which
ultimately affect entity’s supply chain, corporate governance, and intellectual leadership as
well. For example, packaged and fast food can lead to obesity and poor nutrition in the
consumers. It has become difficult for the companies to strategize their product in such a
manner that it does not affect the health of the customer. Another example of it is smoking of
cigarette which may cause lung cancer ca not be produced in healthier manner which do not
affect consumer’s health. It is difficult to opt for single strategy that is appropriate in every
situation (Brewster and et.al., 2016).

Another important aspect of complexity is increasing trend of global presence.
Exports and Foreign Direct Investment can help in increasing the presence of the company on
one hand but it becomes difficult for the managers to implement appropriate strategies on the
other hand. With added complexities it becomes difficult for the managers to manage it single
handed.
Another important aspect of complexity is companies are overload with the
information. It is easy to share the information in no time due to presence of internet which
has made data transmission quick and reliable (Hoque, 2013). Wide range of sensors and
stimulators are used to generate digital information. However, companies are not able to
organize, analyse, and store it quickly. Managers come in contact with variety of bits and
pieces of data which ultimately have a bad effect on the decision making of the company. It
also has a significant impact on innovation, creativity, and productivity of the entity.
The third and the most important aspect of uncertainty is ambiguity. It focuses on
accurateness of management decision making and its impact on performance of the company.
There is a significant impact of the political decisions being taken in the country affecting
the long term or short term goals of the organization. Further, economic, and social also have
a significant impact on the performance of the enterprise. The decisions taken by the
managers are risky as they themselves are also uncertain regarding the probability of
forthcoming events. It makes a clear gap between actions and results of the managers. Lack
of knowledge between actions and results make the decisions of the managers unstable. Even
if they can identify and monitor weak signals it becomes difficult for them to identify the
signals that can directly affect their decision making.
Managers in the second decade of 21st century tends to face more volatility,
complexity and ambiguity than they used to do in the past (Jiang and et.al., 2012). Therefore,
it makes it difficult for the managers to opt for traditional tools to deal with the issues which
the company is currently facing in modern era.
There are wide range of strategic planning techniques that can be used by the
managers in the golden era. The first tool is Ansoff’s strategic choices for growth. The tool
has the potential to measure potential profit and alternative product market growth strategies
that can be used. Forecasting trends and contingencies from every action taken can help in
deciding long term needs and objectives of the company. The four basic strategic moves of
Ansoff are, penetration, diversification, products development, and brand development

(Daley, 2012). Each of the steps involved is helpful in development on product market map.
It helps in making forecasts of the growth by keen observance of political as well economic
trends. It also focus on industry trend and manufacturing cost of the product.
SWOT Analysis is another tool that can be used to deal with the uncertainty. It helps
the organization to analyse, strengths, weaknesses, opportunities, and threats which further
develops strategic position as well. It is claimed to be good strategy as it create a balance
between internal and external characteristics of the organization.
BCG matrix portfolio is also an important tool that is used by the companies in the
modern era. It helps in finding out growth fields in the product. The products are mapped in
terms of market growth and relative market share. It is classified between, dogs, cash cows,
stars and question marks. The idea of BCG matrix is to develop product life cycle curve and
learning curve. The product life cycle curve which shows that the products have different
stages from launch to decline. The learning curve reflects the relationship between
efficiency and experience. It shows that the more often a task is performed; there is
significantly lower cost of doing it.
Porter’s five forces model is another tool that is used by the entities in 21st century. It
is a strategist job as it helps in understanding and coping with the competitions. It is an
analytical model which helps in assessing the competition of the industry. The main
competitive force lies in customers, suppliers, potential, entrants, substitute products, and
nature of competition in the industry. It helps in ascertaining the attractiveness of the industry
and long term profitability of the products of the company.
It is difficult to remain stable in and formulate a single strategy that is ideal for the
performance of the company. Hence, there is no ideal strategy that can deliver the best. Some
of the common reasons of it is macroeconomic stability, change in current exchange rates,
revolution in microelectronic and emerging industrializing counties. It makes the ideal
strategies obsolete and traditional strategic planning is replaced by the approach of new and
ever changing strategic process.
Increased in the globalisation in the world have brought significant impact on the
business activities of the companies as well. The melting barriers between the countries that
has increased the connectivity has accelerated the use of technology in such a manner that it
has become necessary for the corporations to bring out appropriate changes in the way they

handle their businesses They also have to bring out appropriate strategies as traditional
method won’t be applicable to the it any more. Increased imports, exports, and foreign direct
investment have flattened the business era in unquestioned manner. A business which has
made sound changes has been able to cope up with the change in effective manner.
The study of psychology influences the business as the four main pillars of
organizational management are, cognition, motivation, behaviour, and performance. It is
important for the managers to study both individual and institutional psychology so that
satisfaction level among the employees can be increased further leading to the improvement
of profits of the corporation. Evolvement of tools and access to ever growing information in
the database can help in sustainable development of the organization which ultimately leads
to welfare of the society and the customers as well.
One of the noticeable trends in the management is business ecosystem. It is defined as
group of firms which ultimately leads to providing complex products and related services. It
helps in meeting the requirements of the customers. The incorporation of media, technology,
and telecommunication will be an apt example of business ecosystem.
There are key leadership challenges that are faced by managers in the second decade
of 21st century. It affects the business profits by assessing the leadership style followed by the
manager. Market forces leads to bring out change in the organization. These are the
macroeconomic forces that restrict the managers to opt for a constant decision and they have
to change their decision as per the prevailing market scenario. These changes are occurring
due to globalization and takeovers and mergers of multinational companies. It increases the
requirement of technological diversity and improvement in the practices.
A powerful shift is also experienced by the human capital aspect of the organization
as well. Requirement of technical expertise and necessity of diverse labour can affect the
success of the corporation in greater degree (Hoque, 2013). The manager must have the
quality to handle the diversified type of workers under one roof. Difference in the demand of
work from the customers, raise the requirement of diverse ideas from the idea of the workers.
The scenario was quite different in the 20th century as the demand of the consumers was not
diversified Hence, demand in the skills have raise the need to recruit appropriate kind of
talent in the organization.

The relationship between the staff and the organization also plays an important role in
the success of the business. A satisfied and healthy relationship between the employee and
employer helps in providing effective and efficient deliverables to the clients and hence
achieving the objectives of the company as well. Less than half of the workforce is involved
in the conventional full time job which gives rise to need of providing better opportunities to
the employee so that they stay for a longer period of time in the organization. According to a
research, more and more people are getting involved in self employed, temporary, or part
time type of jobs. It has been seen that the managers of tomorrow are the staff of today.
Hence, the expectation of the staff is quite different from that of the traditional one. Hence,
the best employer employee relationship helps in better development of the organization
leading to higher profits and growth as well.
Taking traditional management methods it would be difficult to cope up with the
problems that arise in the current scenario. The second decade of 21st century is all about,
creativity, innovation, rapid globalization, growing competition which joins hands with
volatility, complexity, and ambiguity. It is difficult for any technique to predict the accurate
future. Scenario based decision making is the only way which can help in making wise
decision for the company where decision are made based on the prevailing situation of the
entity and the market (Practice scenario planning to develop a strategy in the world of
uncertainties, 2017). Better decision making considering human capital and employer and
employee relationship in mind helps in coping up with the tough situation and achieve
organizational goals.

REFERENCES
Books and Journals
Amer, M., Daim, T. U., & Jetter, A. (2013). A review of scenario planning. Futures. 46. 23-
40.
Brewster, C. & et.al. (2016). International human resource management. Kogan Page
Publishers.
Daley, D. M. (2012). Strategic human resources management. Public Personnel
Management, 120-125.
Hoque, K. (2013). Human resource management in the hotel industry: Strategy, innovation
and performance. Routledge.
Jiang, K. & et.al. (2012). Clarifying the construct of human resource systems: Relating
human resource management to employee performance. Human Resource
Management Review. 22(2). 73-85.
Jiang, K. & et.al. (2012). How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). 1264-1294.
Luftman, J. & et.al. (2013). Key information technology and management issues 2012–2013:
an international study. Journal of Information Technology. 28(4). 354-366.
Porter, M. (1996). What is Strategy? Harvard Business Review
Ramírez, R., & Selin, C. (2014). Plausibility and probability in scenario
planning. Foresight. 16(1). 54-74.
Schwenker, B & Wulf, T. (2013). Scenario-based Strategic Planning. Wiesbaden: Springer
gabler
Tzu, S. & Giles, L. (2017). The Art of War. Laguna Hills: Race Point Publishing
Wade, W. (2012). Scenario planning: A field guide to the future. John Wiley & Sons.
Zainal, Z. (2017). Case study as a research method. Jurnal Kemanusiaan. 5(1).
Online

Practice scenario planning to develop a strategy in the world of uncertainties. (2017).
[Online]. Available through <https://onstrategyhq.com/resources/the-role-of-
scenario-planning-in-a-world-of-uncertainties/>. [Accessed on 22nd October 2017].